Calculating Mobile User LTV (appia.com)

The best way to measure the success of an app and its mobile advertising strategy is to measure the quality of your customer lifetime value (LTV). LTV is one of the most effective metrics because it takes into account the overall profitability of a user, rather than just the initial return on ad spend. LTV is a more comprehensive metric that is focused on the big picture. Taking into account the net profit a user will bring in is far more informative and valuable than initial gains.
 Oftentimes, advertisers will evaluate their success based upon revenue gains; however, this is not the best metric for calculating success. If revenue is being driven by new user acquisition, there is a risk that your revenue bubble will burst as soon as new user acquisition slows. The best way to measure success is tracking new user quality and engagement over time, which can be measured by LTV.
Although there are various ways to calculate LTV, ForEntrepreneurs.com recommends the use of this formula: LTV = ARPA (Average MRR per account) * customer lifetime. ARPA displays the average monthly revenue per customer.
 Another important aspect of LTV calculation is collecting and passing post-install data. These analytics can be used to provide insight into the segments of users that are providing the best LTV. Post-install data is critical for qualitative analysis of users and traffic segments. These insights will reveal sources and campaigns that are performing best. That data can lead to more specific targeting that will garner more high quality LTV users, increasing average LTV.
As a benchmark, ForEntrepreneurs.com says that LTV should ideally be 3 times greater than cost of acquisition in order to create a strong revenue model.  Targeting high LTV audiences will increase the overall success of your ad campaigns and your app in the long run. Post-install data is an easy way to track and measure user engagement, and in turn calculate user LTV.

Report: Apple Buys Spotsetter, a Location Recommendation App (mashable.com)

IMAGE: MASHABLE, CHRISTINA ASCANI

BY SETH FIEGERMANJUN 06, 2014

Apple has reportedly made another acquisition that could help improve its mapping service.

TechCrunch reports that Apple has acquired Spotsetter, a small startup that was founded in 2011 and developed an app for recommending places and activities to users based in part on their friends' activity. Terms of the deal were not included, but it reportedly closed last week.

SEE ALSO: Apple Is Starting to Get Exciting Again

Apple did not immediately respond to our request for comment.

Spotsetter announced in a blog post last week that its app was shutting down. "We still have big dreams for personalized search for places and look forward to seeing great progress in this area," Johnny Lee, cofounder of Spotsetter, wrote in the post.

Both Lee and his cofounder Stephen Tse now list Apple as their current place of employment on their LinkedIn profiles. Tse had previously worked as a senior software engineer at Google where he was part of the Google Maps infrastructure team.

Apple has ramped up its number of acquisitions in recent years, picking up more than two dozen companies in the last year alone. Several of those acquisitions, including Hopstop, Locationary and Embark, were viewed as efforts to improve on its Maps product.

One in three shun app push notification (warc.com)

LONDON: A majority of UK consumers with mobile devices have enabled push notifications in their apps but almost one third have never done this, so putting them beyond the reach of brand marketers.

The Direct Marketing Association (DMA) surveyed 1,000 people on their use of mobile push notifications and found that 31% of respondents had not enabled them. 

The most common reasons given were that they didn't know what push notifications were (21% of refuseniks cited this), or because they objected to the whole idea (30%). Other reasons included finding them too complicated to set up or failing to check if the apps offered them.

Even among those who had enabled push notifications, brands need to understand the provisional nature of that acceptance. Fully 78% of those polled said 'they would immediately delete the app or disable the notification' if they were unhappy with the material they received. 

As the DMA remarked: "There's a fine balance between keeping consumers up to date/engaged and turning them off, along with the push notification."

A similar proportion (73%) said they would welcome greater control, personalising app notifications if they were given the option. 

The three types of marketing messages for which people typically did enable push notifications included sales promotions (34%), new products and launches (26%) and location-based offers (26%).

And they were most likely to welcome alerts from supermarket apps (22%) and music/radio apps (22%), closely followed by TV/films (20%), online retailers (20%) and price comparison sites (19%). 

Douglas McDonald, member of the DMA Mobile & Connected Marketing Council, argued that marketers should be factoring app push notifications into campaign planning.

"For those brands with apps, push notifications are now an important tool in the customer communications box, [but] it's still isolated from many companies' comms strategy and planning," he said. "It's time to make it part of the planned customer journeys alongside email and other methods." 

Smartphone Market Share And Usage By Country – Apr-May 2014 (developereconomics.com)

My argument was that market share patterns by country could give us a better understanding of these trends. While market share of shipments is certainly a leading indicator for install base (and consequently, usage), it only gives us a part of the story. Contrasting regional market share and usage share (as a proxy for install base) may give us an even better understanding.

As always, I’ve sourced the figures for shipment market share from Kantar while usage share figures are from Statcounter. Usage share (or browsing share) isn’t an ideal proxy for install base as it could be skewed towards higher end devices. However, the trends in usage share could give us a fairly good understanding of the underlying install base. For example, the chart above shows that Android’s usage share has been growing while that for the iPhone has declined slightly. This should be expected as Android’s shipments and install base have been growing much faster than those for the iPhone.

Now, let’s take a look at the trends in each region:

Mature Markets: US, Australia, Japan and Europe

US: Android Gains on iPhone after Unsubsidized Plans Take Hold

The market share chart shows that AT&T’s foray into unsubsidized smartphone plans in late-2013 had a measurable impact on the iPhone. As a result, the iPhone has seen steep YoY market share declines. We can see this pattern in the usage share chart as well. Android and iPhone usage patterns were diverging until late-2013, when they began to converge again. Meanwhile, both charts show that Windows Phone has been unable to penetrate the US market.

Australia: Android Usage Grows

Android has held the market share lead in a fairly cyclical market for a few years now. Over this period, it has made steady gains in usage share. Windows Phone’s market share has been hovering around 5-7% for a year now, but it has barely made a dent on usage. This could mean that Windows Phone devices are being used as feature phone replacements.

Japan: iPhone Extends Lead

As I’ve explained before, Japan is one of the only remaining markets in the world that follows a purely opaque pricing structure for smartphones. This pricing model, combined with a distribution partnership with NTT DoCoMo, gave the iPhone a huge market share boost. As we can see, this has had a major impact on iPhone usage as well.

UK: Android Makes Steady Gains

As I’ve explained before, market share patterns in the UK seem to be stabilizing with lower cyclicality. Usage share patterns have remained stable as well, with Android gradually catching up with the iPhone. Interestingly, Blackberry owned a significant share of usage even after 2012 but Android gradually ate into its base. Windows Phone remains a bit player, but at least its usage share doesn’t scream “feature phone replacement”.

Germany: Android Dominates

Android’s market share in Germany has grown steadily over the past few years. As a result, its usage share overtook that of the iPhone in mid-2012 and now holds a dominant position. This had a significant impact on the iPhone’s performance. Windows Phone’s market share has hovered at around 7%, but it has struggled to make an impact on usage.

France: Android Leads Shipments, Overtakes iPhone in Usage Share

Android’s market share has remained stable over the past year, while the iPhone has remained cyclical. Android’s shipment supremacy has led to a direct impact on the install base which caused Android’s usage to overtake the iPhone’s earlier this year. Meanwhile, Windows Phone’s market share seems to have had a meaningful impact on usage.

Italy: Android Leads, Windows Phone Tails Off

As in Germany, Android has made steady gains to become the leading platform in both market share and usage. The iPhone has seen steep declines on both metrics as was also challenged by Windows Phone. However, Windows Phone shipments, and consequently usage, have tailed off over the past few months.

Spain: Android Becomes the Default Platform

This one seems self-explanatory.

Emerging Markets: China and Latin America

China: Android and iPhone Remain Steady

Market share patterns in China have stabilized as the market seems to have moved out of hyper growth. Over this period, Android and the iPhone have feasted on legacy platforms like Symbian. As the market matures, we may see more direct competition between these two platforms. Interestingly, the iPhone’s partnership with China Mobile seems to have had no impact on these patterns.

Mexico: Android Replaces Blackberry

Mexico is the only market on this list where Blackberry held a market share lead at some point in the last two years. However, this market share lead did not translate into usage which suggests that they were primarily used as feature phones.

Over the past couple of years, Android has taken a dominant position in market share and usage. The iPhone’s share of usage has declined over time, but still seems out-sized compared to its market share. Finally, Windows Phone seems to have a measurable, but not significant, presence on both metrics.

Brazil: Android in the Lead

As in Mexico, Android holds a dominating position in both market share and usage while iPhone usage remains far higher than its market share. Windows Phone has a small presence, but it seems muted compared to other Latin American countries.

Argentina: Android Leaves Other Platforms Behind

Android’s performance in Argentina seems to be dominant enough to create an oddly stable usage share pattern. Windows Phone is the second leading platform on both metrics, but remains far behind the leader.

The Internet Of Small Things Spurs Big Business (informationweek.com)

IoT scenarios that appear consumer-centric and disposable hold broad business opportunities.

In a recent InformationWeek column I opined that smart sensors would soon find their way into many disposable products -- like a soda can, which when opened triggers a contest. Initially these won't be very sophisticated, but as sensor prices fall and technologies improve, extreme connectedness across the Internet of Things will inspire new business opportunities.

One example is start-up LIFX, based in Melbourne Australia, which has raised $12 million in series-A venture capital funding, for guess what? A lightbulb. Not your standard bulb, but rather a WiFi-enabled, multi-colored, energy-efficient LED smart bulb controlled from a smartphone app.

[Union Pacific and GE Power & Water are turning IoT hype into reality, but want to do more. Read Internet Of Things: What's Holding Us Back.]

Big deal you might say -- just another gimmicky case of IoT presented in a niche consumer context but with no place in big business, right?

Wrong.

If the humble light bulb can be managed from a mobile app to control energy output, color, and ambience in the home, then why not apply the same smarts in a commercial setting. Imagine controlling retail store lighting from the touch of an app or changing hue to accentuate products. Want a holiday mood theme for the store or restaurant? Just tap the app -- a simple, cost-efficient way to differentiate your products from something that's pretty much been the same since Edison stumbled upon the light bulb idea.

Beyond light bulbs, we're seeing other IoT applications that appear consumer-centric but have broad business implications. Consider the Nest Labs home thermostat. Nest has no doubt made a tidy sum selling its smart device (40,000 to 50,000 units per month, according to reports), but there are bigger forces at play. It's really more about very smart business than smart technology.

An Austin, Texas-based utility company is working with Nest to manage power demand by remotely turning down air conditioning (AC) systems at peak times. On hot days, AC accounts for half of Texas's energy usage and drives up wholesale energy costs. So any mechanism that conserves power is good business. It's also great for the consumer too, with customers offered energy rebates if they allow the company to dial-back AC usage using Nest.

Business models like this rely on Internet of Things smarts, but the real value comes because customers buy into an intelligent application and service. Nest, for example, gathers data from sensors (temperature, humidity, and light) together with behavioral consumer analytics that learn residential habits in order to program AC settings automatically. Add the ability to combine weather data and a mobile app and Web portal to control the system and everyone stays cool -- physically, environmentally, and financially.

What's apparent from both the LIFX and Nest examples is that applications and services are the real powers behind the Internet of Things. Sensors gather the data (lots of it), but analytics and mobile apps are the secret sauce.

Developing these types of apps and services will require smart thinking from technical teams. New business model opportunities will put pressure on development teams to deliver cool new apps to consumers rapidly. But new features will become almost as disposable as the physical products themselves. As such, teams will be continuously adding, testing, refining, and removing functionality to address immediate opportunities, but with the flexibility to pivot when business models change.

As IoT makes the consumer-to-commercial crossover, key data acquisition and storage challenges will also need to be reviewed. As yet, smart systems and sensor networks can't process massive amounts of data at the point of capture -- meaning cloud becomes the offload point and intermediary for big data and analytical applications. For businesses, this means addressing persistent cloud security issues and building high-performance networks needed to support a much more diverse set of applications.

Apps of course will change too. Today, the smartphone is the focal point for control in many Internet of Things use-cases. But as standards emerge and technologies improve, more intelligence and control will be incorporated within the actual smart-sensor networks themselves.

Thinking back to light bulbs, I'm not quite ready to fork out $100 for something I see as disposable, but as a pseudo geek I probably have too much emotional investment in the tech wizardry to throw one away.

However, as prices fall and smarts improve, the act of discarding something with more compute power than the Apollo spacecraft will become commonplace. But before things are sent to the scrap pile, smart businesses will have leveraged a new generation of applications to extract every last drop of business value from the IoT tech.

THE FUTURE OF ENTERPRISE MOBILITY- AN OVERVIEW (harbinger-systems.com)

Enterprise mobility offers a gamut of growth opportunities for businesses to transform their operations. In this infographic, we present you with details on how this industry is shaping up and the potential it has to revolutionize different industry processes.

Leave my physical wallet at home? No thanks (mobilepaymentstoday.com)

One thing I've learned while covering the payments industry for almost seven years is that I can't be gullible when wearing my journalist hat.

I’ve heard it all, and then some, from companies that peddled their products to me as the next big thing to change payments. Most of those companies now are out of business, and probably because they were the only ones who bought into their own hype.

The situation this industry finds itself in today is that the hype machine is in overdrive, especially when it comes to mobile payments and wallet providers. And if you think that’s actually a good thing, then I’m afraid I have some bad news for you.

Sure, the hype machine results in more mobile payments consumer awareness that should spur more adoption. But the majority of the supposed key companies involved in mobile payments overhype their products and deliver underwhelming results. The companies, however, that do deliver what on the surface can be considered successful results often do not reveal key details about how they arrived at those numbers. I’m looking at you, Isis!

One of the biggest issues I have with current mobile payments hype is this unattainable utopia where you can leave your physical wallet at home and rely on your smartphone for everything. I can’t think of a bigger example of misleading consumer marketing.

When PayPal revamped its mobile wallet last year, the eBay-owned company tried to sell consumers on the flawed argument that they could leave their physical wallets at home. What PayPal, and others, have failed to admit publicly is merchant acceptance is still a problem worldwide.

I live in Salem, Mass. When I first opened the PayPal app after I moved here in April, I learned only two merchants accept PayPal. One of those merchants is Home Depot, which is where PayPal debuted at the physical point of sale.

And I’m not trying to pick on PayPal. Google Wallet, LevelUp, LoopPay (which really isn’t a true mobile wallet by my standards) and others all in some way promote this idea of leaving your physical wallet at home and a frictionless (another marketing buzzword) shopping experience at the physical point of sale. The bottom line right now is that we are far from this magical world that only exists in the minds of those executives who dream of such a scenario.

So, what can companies do to lower the volume a bit and stop misleading consumers?

First, be realistic, because your mobile wallet or mobile payments product is still limited in a lot of ways.

As I mentioned earlier, I can’t use every mobile wallet everywhere. And when you advertise a certain merchant that accepts your wallet, make sure they have the proper equipment at the point-of-sale terminal. I tried using Isis at two CVS locations, but couldn’t complete a transaction because the contactless terminals were not working.

Companies also can give a shot of realism to consumers and admit that yes, it’s probably still a good idea to carry your physical wallet because you still need a driver’s license, health insurance card and even a library card on your person.

Second, give me an incentive to use your wallet.

We know making a payment with a phone is not enough for consumers to begin to even entertain the idea of leaving their wallet at home. Industry analysts and executives drive home that point daily. But not everyone heeds this advice.

More companies should follow LevelUp's lead and focus more on loyalty. The company made the decision a long time ago to focus on loyalty instead of the actual payment, which is completed via a QR code. The more you use LevelUp at a participating merchant, the more that merchant rewards you down the line.

Isis also is doing loyalty well in some cases and currently has a great promotion. It revolves around the American Express prepaid card Serve and the $1 cashback deal on every eligible purchase through the end of the year. The wallet's biggest use case issue right now is that it is limited to a small number of bank cards, which stymies widespread adoption despite some attractive rewards.

And finally, companies need to better educate consumers and merchants about their products.

The cashiers at CVS had no clue about Isis when I tried to pay with my phone. That's a huge problem. I've also attempted to use mobile apps with an in-app payment feature at bars and restaurants where the staff was unaware of any type of partnership with the provider. That's another huge problem.

Facebook friends message me with all types of questions regarding every company I mentioned in this post. The most asked question? "Is it safe?" That’s yet another huge problem.

My three observations are just a small sampling of what I'm seeing today. I might not be the most qualified person to speak about the technical aspects of mobile payments. But when I wear my consumer and journalist hat to observe the industry, I see too many little things companies are not addressing and it's deafening.