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© 2011 CONFIDENTIAL 1

Mobile Monetization October 2011

Confidential – Not for Distribution


© 2011 CONFIDENTIAL

Strong Monetization

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Mobile is 44% of DAU. What Percent of Revenue?

Android has 60% more DAU than iPhone. Signing Up Users 2:1 vs. iPhone

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The myYearbook User is Addicted to Mobile

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Majority of Activity Will Soon Be Mobile

• Mobile now accounts for over 47% of all logins, up from virtually 0 in the first half of 2010. Over 60K installs per day across our network of apps.

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Mobile Users Are Even More Engaged

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• Android and iPhone users visit for shorter periods of time, but much more often, resulting in more daily time spent per user than on the web – over 20 years’ worth of minutes on Android alone, every day!


Why Are They So Engaged?

• Cross-platform games facilitate social discovery anytime, anywhere

• Activity of the always-on mobile user helps drive engagement and monetization on the web

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Mobile as a New User Acquisition Stream

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• 1 out of every 4 myYearbook registrations comes via mobile apps

– And mobile signups are significantly less likely to churn!

• In the end, about 1 out of every 3 newly engaged myYearbook users found us via the App Store or Android Market

• We expect this proportion to continue growing as smartphone and tablet penetration increases in our target demographic


The Catch

WHY?

About 15% of a web user, in terms of monthly ARPU

What’s a mobile user worth?

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Mobile Display Ad Market Isn’t There Yet Advertisers Are Spending Like It’s 1997

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Plenty of Smart People Trying to Crack the Nut

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So How Are Mobile Game Publishers Making Money?

• In-App Purchases, Paid Apps, Advertising

Source: http://www.insidemobileapps.com/2011/08/08/quarterly-earnings-2q-1q-mobile-gaming/

$5.6 million last quarter

Up to $10.9 million last quarter

$57 million last quarter

$16 million last quarter

$9.4 million last quarter

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Source: http://techcrunch.com/2011/10/18/mary-meekers-2011-presentation-on-internet-trends-slides


In-App Purchases Increasingly Outperforming Paid Apps

• More than 65% of iOS app revenue attributed to Freemium games

Source: http://blog.flurry.com/bid/65656/Free-to-play-Revenue-Overtakes-Premium-Revenue-in-the-App-Store

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Over Half of Top Grossing iOS Games Are Freemium

Graphic showing games with in-app purchases

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Taking Synchronous Multiplayer to Mobile

Synchronous Gaming Engine Acquired Games

3M+ installs

600K+ installs

• Acquisition of Flock Multiplayer Engine paves the way for suite of synchronous multiplayer games on mobile

• Meet people in synchronous games from anywhere!

• Cross platform

500K+ installs

1.5M+ installs

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The Formula: One-Tap Purchase

• Virtually every iPhone user has a credit card on file with iTunes, enabling a frictionless one-tap purchase flow

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Android Can’t Compete (Yet)

• Comparatively onerous payment process on Android is clearly impacting monetization rates vs. iPhone apps

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Both Platforms Must Improve Internationally

• Both iOS and Android are overly reliant on a faulty expectation that everyone has a credit card – need to support popular local payment methods, especially in countries with much smaller advertising markets

Konbini

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Mobile Offer Walls Help Drive Monetization

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But the Pay-Per-Install Model is Unavailable on iOS

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Incentivized Mobile Video Ads Poised for Growth

• Premium placements command premium CPMs

• Avoids screen size constraints

• Guaranteed eyeballs

• Plugs into social app ecosystem:

• Facebook

• Twitter

• SMS

• Available on all platforms

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myYearbook’s Social Theater Goes Mobile in 2012

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Source: myYearbook Internal


Still a Huge Opportunity for “Traditional” Display Ads

• Only 3% of consumers are spending their money on in-app purchases

• Advertising can monetize the other 97%-- at a lower rate, but one that will improve with time

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Mobile Potential

Source: http://techcrunch.com/2011/10/18/mary-meekers-2011-presentation-on-internet-trends-slides


Translation: Be Mobile or Be Irrelevant

Source: Survey of 3,000 myYearbook users

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Passive Watching of Television is Over

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Hard to measure doesn’t mean nonexistent.

But Wait – Everyone Knows Mobile Ads Don’t Convert!

What’s the ROI of your mom?

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Source: Gary Vaynerchuk


Advertisers Should Be Excited About Mobile

• More Reach

o Users are always on, always plugged in – now advertisers can reach them more often than they ever could before

• More Context

o Mobile is a higher-quality touch point

o Target based on interests, social graph, location

o Point-of-sale capabilities developing

• More Expectations

o Increasingly, users expect their web experience to transition seamlessly onto their mobile phones

o No patience for apps and brands that aren’t available everywhere

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The Next 12 Months

• Smartphone penetration to increase

• We expect mobile monetization to improve on all fronts

• New platforms will emerge (e.g. Amazon Kindle Fire), forcing publishers to make tough choices about where to invest resources.

• New user acquisition? Potential for monetization?

• Apple and Google continue to improve their offerings around payment, especially internationally

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Smartphone Penetration to Increase

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Source: myYearbook Internal


Android In-App Billing Will Get Easier

• Expect Google to encourage users to create a billing profile on activation of a new phone or download of the first app

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New Players Will Emerge That Solve Seamless Payments on Mobile Devices

• Amazon is already working on an In-App billing SDK for mobile

• 1-Click shows they understand frictionless payments

• Ability to strike large deals with handset makers and market their own tablets

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Handset Makers Will Partner with Billing Providers

• Expect handset makers, carriers, and billing providers to work together to improve the payment process

– Reduced friction

– More options for consumers

– Friendlier terms for publishers

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Further Innovation Around Ad Units

In-Game Branding

Premium Expandable Ad Units

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It Will All Come Together

• Smart phone proliferation continues

• Mobile advertising growth explodes

• Mobile payments become frictionless on all leading platforms

• Location promise is realized

• Marketers key in on social and location context to drive people to point of sale

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Any Questions?

@geoffcook [email protected]

Confidential – Not for Distribution

Technology

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