App Marketers Learn From Ad Tech, Even As They Abandon Ads

buttonimgMobile apps need revenue but have limited screen space on ads.

Enter Button, which lets consumers click on an icon to move easily from app to app. It collects fractional fees from its partners, like a toll road connecting different apps.

“We continue to see these transactional models embraced in mobile compared to traditional advertising models,” said Michael Jaconi, Button’s co-founder and CEO.

Button’s longest-standing app-to-app partnership is with Foursquare and Uber. If someone needs a ride to a venue, Foursquare channels users to Uber. Foursquare and Button split a performance fee.

“While it is a revenue stream, I’d say it’s a product opportunity first,” said David Ban, Foursquare’s director of business development. “We have our work cut out building and maintaining this database of places, so it’s costly and inefficient to build out all those [ride-sharing and food-delivery] partnerships individually.”

Uber doesn’t even pay lip service to the partnership as a revenue stream. Sara Ittelson, Uber’s director of product partnerships, said in an email the partnership with Button is about helping “enhance people’s trip experiences, whether it’s finding a new restaurant in their home city they’d like to try, or booking a hotel.”

Button also helps Uber reach prospects, Ittelson said.

For Button, having a major app like Uber in its network makes it attractive to prospective clients across categories, like its burgeoning media business.

A partnership with iTunes to enable deep links into the Apple store precipitated Button’s relationship with iHeartMedia. And Condé Nast Traveler joined the Button platform in September on the strength of partnerships with Uber, OpenTable and Hotels.com – all of which are natural extensions to readers planning vacations.

“We now have the ability to enhance our content with genuinely relevant actions beyond the usual streams of mobile advertising,” said Gina Lee, Condé Nast Traveler’s director of product management, when the partnership was announced.

Button’s playbook looks like ad tech, and once it reaches a threshold of category partners, “a biddable market is inevitable,” Jaconi said. It’s already building out products to accommodate that new market. Button will begin working on auction dynamics next year and is expanding its segmenting and targeting capabilities across its partner network.

And though Button’s roots are contextual commerce (“She just set a reservation at a restaurant half a mile away – She can use an Uber.”), dynamic targeting can significantly boost the value of its inventory.

Many commerce apps on Button’s roster, like Ibotta, Groupon and Jet.com, will pay multiple times more for first-time users, Jaconi said. Button will have the opportunity to make real-time choices like sending a user to an app he or she has used before – making it a more reliable conversion – or an app publisher that’s willing to pay considerably more for a potential new install.

Two months into a pilot with Jet.com, Button’s partner platform has “unlocked a powerful new channel for driving high-intent purchasers,” said Lauren Picasso, who leads Jet’s mobile marketing team. “The cost efficiency of their channel has outpaced almost all other channels of mobile acquisition.”

Jaconi argued the true cost of mobile user acquisition is overstated due to the Alphabet and Facebook duopoly, because no other individual publisher has comparable scale or cross-category applications.

“There’s a lot of intent and demand in mobile apps,” Jaconi said, “but for the most part it’s extinguished without coming to anything.”

 

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