The news that Tapjoy, formerly Offerpal, raised $21 million in funding last week, is not only a feel-good comeback story for a company tainted by the Scamville Facebook case. It also shows there’s a big opportunity to be had by helping the freemium model expand on mobile. In addition to Tapjoy, there are other companies hoping to ride the freemium app boom.
For example, W3i, a longtime web application recommendation service, is looking to help match up advertisers who want to promote their mobile apps with developers who are looking to make money through in-app purchases with a new ad-funded payment platform for iOS. Similar to Tapjoy’s platform play, W3i is looking to exploit the growth in in-app purchases by uniting developers, advertisers and users.
A user who wants to buy virtual currency or goods in an app can choose to install another app in lieu of payment, which the advertiser delivers to the developer upon installation. I talked with the CEOs of both companies about the opportunities in alternative payments for mobile apps and why they feel that they’re on to a big opportunity, helping fuel the in-app purchase economy and taking advantage of its growth.
Mihir Shah, CEO and president of Tapjoy said a year ago, the company began testing out a freemium model for one of its mobile games Tap Defense a year ago and found that within a week, it was making six times more money going freemium than paid with traditional display advertising. Eventually, the game was making 10 times what it was before. The news spread, and other developers came on board with Tapjoy’s virtual currency model. Shah said the market for freemium mobile apps went from about 20 a year ago to about 2,500 today, of which he said 90 percent use Tapjoy. It’s unclear if these numbers are accurate, but as I reported a few months ago, we’ve seen a big spike in the number of freemium apps on the top-grossing rankings of the Apple App Store
Tapjoy employs its platform on iOS primarily and is also on Android. The company’s move to mobile has attracted some 400 developers, who are now partnering with Tapjoy for its in-app currency platform. And big brand names are also lining up with Tapjoy because of its success in helping distribute apps. Companies like Kayak, Fandango, Tapulous and Groupon pay for each user who installs their app in exchange for virtual currency. Shah said it only works with apps that have already been approved by Apple so it helps assure users the downloads are legitimate. He said the messaging is also made clear when users agree to download a paid app in exchange for currency. That has allowed Tapjoy to avoid the problems caused by the earlier Scamville episode, in which Facebook users were encouraged to use offers to pay for virtual currency in Facebook games, sometimes unwittingly buying things or subscriptions.
Shah said alternative payment through offers is still emerging; most iOS users still pay for virtual goods and currency directly. But he said it’s a significant business that will grow over time. He also said while many freemium apps right now are games, the model can work for many other types of programs. Communications app Pinger offer users currency for the service in exchange for app downloads. “The amount of content that is switching to this (freemium) model is astronomical,” said Shah. “And the top of the curve is not leveling off.”
This helps explain W3i’s move into this space. Andy Johnson, CEO of W3i, said its W3i Ad-Funded Payment Platform is trying to create a win-win-win for developers, advertisers and users. He said developers are able to better monetize their apps, a struggle in increasingly crowded app stores. Advertisers can get better distribution of their apps and insight into their marketing efforts while users are able to get something for free, which is overwhelmingly how they like to obtain things.
W3i is just getting started but has a lot of experience in helping distribute desktop apps. The company, which launched in 2000, has built a profitable business out of its InstallIQ app installation manager, which has helped W3i hit 500 million app downloads in its network. Now, W3i believes it can take its learnings to mobile, which Johnson believes can be an even bigger market.
“We see the mobile platform as the dominant platform moving into the future,” Johnson said. “We think this entire application distribution ecosystem is just beginning and there is so much market created each day, we don’t think there is one company that owns it.”
As I wrote about last week, in-app purchase revenue on the iPhone is now basically on par with paid download revenue, according to Distimo, an app analytics firm. With in-app purchases expected to be the dominant revenue driver for mobile apps, it’s smart for Tapjoy, W3i and others to try to take advantage of this momentum.
Related content from GigaOM Pro (sub. req.):
- How To Ride The Freemium App Wave To Success
- Will Killer Apps Affect Which Handsets Consumers Buy?
- How Carriers Can Crack the App Discoverability Nut
I’m glad you responded to deBoer less politely than Drum did. I am royally pissed that such a poorly reasoned critique got responses from both of you. I think that I will argue that you are clearly Zooroastrians, since easily refuted criticism seems to be the ticket to fame around here.
However, I also think you slipped up in your reply. You say no one is to your left and your thought is based on the thought of JD Mill. This does not imply that no one is to the left of JS Mill, but it totally miss states where Mill’s writings would place him if he were reincarnated. Many of his views would be ultra ultra right today. For example, he supported a poll tax on the grounds that to be able to vote on spending without being taxed is to be given a license to pick other peoples’ pockets (I am quoting “On Liberty” from memory). Margaret Thatcher decieded to follow the very explicit detailed instructions of JS Mill. That was the time she went too far and lost the confidence of the Tory Parliamentary party and so the parliament and so became a baroness. Too far right for Margeret Thatcher to get away with and very explicitly advocated by JS Mill are consistent.
He also opposed the secret ballot. He said that, in the past, he supported it so people couldn’t be intimidated by their employers, but that people were getting too uppity so open voting was better. The excessive uppityness was in the 19th century. This again is very very explicitly stated in “On Liberty”.
Oh Nemisis. I decided to check my recollections and it is very explicitly state in “Reflections of Represenative Government” a book which I must have read but I don’t remember when. I quote one of the inspirations of your insuperable leftism
http://www.gutenberg.org/dirs/etext04/conrg10h.htm (search for ballot)
It may unquestionably be the fact, that if we attempt, by publicity, to make the voter responsible to the public for his vote, he will practically be made responsible for it to some powerful individual, whose interest is more opposed to the general interest of the community than that of the voter himself would be, if, by the shield of secrecy, he were released from responsibility altogether. When this is the condition, in a high degree, of a large proportion of the voters, the ballot may be the smaller evil.
[skip]
But in the more advanced states of modern Europe, and especially in this country, the power of coercing voters has declined and is declining; and bad voting is now less to be apprehended from the influences to which the voter is subject at the hands of others, than from the sinister interests and discreditable feelings which belong to himself, either individually or as a member of a class.
Finally he opposed one person one vote. He thought people with advanced degrees should have extra votes. He said this would make it clear that they were (we are) the “very elite” of the nation. He objected that ordinary people in the USA “(provided they are white)” do not acknoweldge that anyone is their better.
nemesis again. Again it is in Reflections on Representative Govenment and the attempted quote is not correct. This time search for “white skin”
“I do not look upon equal voting as among the things which are good in themselves, provided they can be guarded against inconveniences. I look upon it as only relatively good; less objectionable than inequality of privilege grounded on irrelevant or adventitious circumstances, but in principle wrong, because recognizing a wrong standard, and exercising a bad influence on the voter’s mind. It is not useful, but hurtful, that the constitution of the country should declare ignorance to be entitled to as much political power as knowledge. The national institutions should place all things that they are concerned with before the mind of the citizen in the light in which it is for his good that he should regard them; and as it is for his good that he should think that every one is entitled to some influence, but the better and wiser to more than others, it is important that this conviction should be professed by the state, and embodied in the national institutions. Such things constitute the spirit of the institutions of a country;
[skip]
The American institutions have imprinted strongly on the American mind that any one man (with a white skin) is as good as any other; and it is felt that this false creed is nearly connected with some of the more unfavorable points in American character. It is not small mischief that the constitution of any country should sanction this creed; for the belief in it, whether express or tacit, is almost as detrimental to moral and intellectual excellence any effect which most forms of government can produce. ”
Mill wrote a long time ago. His views were very progressive in his time, but many of them are absurdly reactionary now.
Your efforts to reassure your readers that you are a leftist just like Milton Friedman and JS Mill are not reassuring to this reader. I will just assume that you are not familiar with Friedmans massive opus and that, the passage of so many years has dulled your memory of what Mill actually wrote. I admit I read him when I was an undergraduate taking Rawls’s course on Justice Pass Fail (I passed) and, sigh, many many many more years have passed since I was an undergraduate than since you were an undergraduate. But I think my quotes from memory are substantially accurate.
update: I checked them and I had forgotten in which book I read them rounghly 3 decades ago (sorry). I now suspect that you never read “Reflections on Representative Government” and apologise for questioning you memory.
I know you used the weasel phrase “recognizably derived from ” but if your views actually were recognizably derived from Mills’s, then there would be a whole lot of people genuinely to your left.
By the way, you write no one is to your left. This is odd, since you have also listed people to your left on one of your blogs (not this blog). You definitely once wrote that, in a meaningful way, Billmon is to your left. This occured when you were discussing the fact that in a test your ideology web page you came out a centrist (some time ago). You argued that the test was invalid and they called you centrist because you are consequentialist. I can’t find the post.
Source:http://removeripoffreports.net/
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