Mobile-first, indie gaming companies dominate with two-thirds of user sessions on Android, iOS

Independently-owned gaming companies that went mobile first are dominating gameplay sessions compared to established companies that crossed over from other platforms, according to Flurry.

These companies, which started their businesses on iOS and Android, have two-thirds of the gameplay sessions, according to the mobile analytics firm. Other companies like EA or Activision have just one-third of the gameplay sessions, and this includes companies these giants may have acquired like the Chillingo label. (For the record, I think “indie” is a little bit of a misnomer now since many of these mobile-first companies are growing up and have around 100 employees or roughly $20 million in venture funding like TinyCo.)

Flurry points to this as a sign of the health of the Android and iOS ecosystems. No single player has emerged to dominate either market, which would stifle innovation from other emerging companies.

“While we would have expected indie game developers to fare better early on in the history of iOS and Android mobile app platforms, it’s remarkable that their dominance to has grown over the last several years, with no signs of slowing,” wrote Peter Farago, Flurry’s vice president of marketing in a note.

“Indie” games saw their market share dip in beginning of the 2011 during an earlier wave of consolidation with Zynga buying Newtoy and DeNA buying Ngmoco and Gameview Studios. But independent companies pushed back and we’ve seen a few true indie game developers like Imangi Studios and NimbleBit hit some home runs over the past year.

Overall, as the raw footprint of Android and iOS reaches about 500 million active devices, gameplay sessions have quadrupled over last year. They have gone up by twenty-fold since 2010.



Games, as we’ve reported before, dominate with more than 50 percent of worldwide sessions, followed by social networking. Flurry is going to be highly unrepresentative on this front, however, because the company has no visibility into the 800-pound gorilla of all mobile apps: Facebook.


Google rebrands Android Market as Google Play, does another sale to round up credit cards

Google rebranded Android Market as Google Play today to showcase the company’s recent forays into other types of digital content like movies, music and books. Google Play is now a single destination for apps, games, movies, music and books, in the way that the iTunes store has also hosted songs, podcasts and TV shows for several years. The company says Google Play is based on the same back-end that Android Market was, so developers don’t really have to do anything differently than they were before.

“We believe that with a strong brand, compelling offerings, and a seamless purchasing and consumption experience, Google Play will drive more traffic and revenue to the entire ecosystem,” the company said in a blog post today.

This might add to concerns that Google is featuring other types of content at the expense of visibility for apps. But Google says it won’t show favoritism toward one type of content over another.

“As we grow and promote Google Play around the world, we’ll be marketing your apps and games at the same time,” the company said. “Our policies have not changed and our goal is still the same — to create a great, open marketplace for distributing Android apps.”

To celebrate the rebranding, Google is doing another sale, a trick it used when Android Market surpassed 10 billion downloads and the company cut certain paid apps to 10 cents. This time around, select apps will go for 49 cents while Disney’s Where’s My Water will go for 25 cents.

Given Android’s historical weakness with delivering downloads of paid apps, this is a way for the company to round-up more credit cards. The more payments data it has, the more frictionless it will be for Android-owning consumers to pay for digital content in the future. We heard the last sale performed reasonably well from sources, bringing payments data on an additional 1 million consumers.

Both Google and Facebook are making big pushes around digital media content this year. While these industries don’t have quite the same profit margins that gaming businesses do, they have the potential to convert non-gamers into paying customers.

Because Apple started the iTunes store about a decade ago around the premise of music and only later graduated to TV shows, movies and apps, it was able to steadily grow a dedicated base of paying users. Google and Facebook are coming in the opposite direction, starting with games first and then migrating into music and media.

Former Outfit7 CEO goes for a Groupon-for-apps model with new startup Iddiction

Iddiction, the company from former Outfit7 chief executive Andrej Nabergoj, is going after a “Groupon for apps” model with daily deals on both free and paid apps. It’s launching today with a first product App-o-Day, which offers paid apps that will go for free for a limited time, or free apps with deals on their virtual currency.

Now one might ask, why is it necessary to raise $3.5 million for what looks like a free-app-a-day service when there are already many providers in the market?

“We didn’t want to do a free-app-a-day clone,” Nabergoj said. “We wanted to create something that would bring the deal mechanic to the app store. When you look at most of these services, they’re not of high quality. They’re badly designed, poorly engineered and don’t always perform well for the developer.”

On the back-end, he said there are analytics that should help developers understand how the promotions are benefiting them. He said that his team studied the Groupon model and is looking at partnerships with many content sites to drive additional traffic.

Plus, he said his app is more thoughtfully designed than competitors in the marketplace.

“We just hope we did a really amazing job in creating the best possible user interface,” he said. “We thought: how would Apple do it? What would be the design principles they would use?”

Part of the funding, as you might expect, is going to go toward promoting App-o-Day in the iTunes store. Nabergoj won’t charge developers who want promote their apps for awhile, he said.

Last November, the company said it raised $3.5 million from Playdom co-founder Rick Thompson, Comcast Ventures, Highland Capital Partners, IDG Ventures, Felicis Ventures, Bayview Capital (which founded Gameview Studios) and Francisco Larrain, who is a director of engineering at Groupon.

Nabergoj used to be chief executive officer of Outfit7, the Slovenian developer behind the talking animal and character apps that has seen more than 300 million downloads. What we had heard at the time was that there was a split between the team back in Slovenia, which was hesitant to raise venture funding, and Nabergoj, who wanted to use funding to step on the gas pedal. In any case, Outfit7 brought on a new executive chairman and continues to grow.


Viral channels for Android apps on Facebook are coming in a few weeks

One of the bits of news hidden in this week’s flood of Facebook marketing and HTML5 announcements is that viral channels for native Android apps are coming to the platform in a few weeks.

That will finally bring the mobile platform to parity between Android and iOS. Developers for both platforms will be able to promote their apps in the news feed and through requests and bookmarks. If a person sees activity from a mobile app in their news feed, they’ll be driven to the app if they have it or the right page in the iTunes store or Android Market for downloading it. Facebook first unveiled these mobile channels back in October, but they were just for iOS and mobile web apps.

“We’ll be enabling native Android apps starting in the coming weeks,” said James Pearce, who joined as Facebook’s new head of mobile developer relations a few months ago from Sencha. “If you’ve already got an Android app, this is a  clear opportunity for distribution.”

After years of being a must-have for web properties that want viral growth, Facebook is now positioning itself as a critical way of getting users for mobile apps too. The issue is that Facebook doesn’t own the lower parts of the mobile stack, which are controlled by Apple and outright rival Google. It would be amazing to have an app store that’s designed in a social way from the ground up and that comes pre-installed on phones. But Apple isn’t willing to give up control and Google has its own competing social network now.

Even despite these limitations, Facebook’s mobile platform is starting to show some promising traction. Pearce reiterated statistics the company recently shared, that Facebook is driving about 60 million unique users to mobile applications 320 million times per month.

While it isn’t clear how many of these go to smartphone versus featurephone apps, 60 million monthly uniques is no small slice of the overall pie. Flurry estimated around Christmas that there were 264 million active Android and iOS devices in circulation, a number that is probably closer to 300 million now. Plus, Facebook said that the amount of traffic it sees from the mobile web is about twice as much as it sees for any native app on iOS or Android, according to Bret Taylor’s keynote at Mobile World Congress in Barcelona on Monday.

Taylor said on Monday that the company has to address three issues on behalf of mobile developers to make HTML5 work: 1) distribution 2) fragmentation and 3) monetization. The viral channels will help solve the first problem.

Now Facebook is trying to fix the last two with an industry working group affiliated with the W3C, the international standards body for the web. It will help browser makers adopt the features that mobile developers most want.

“It’s more about pushing or curating the specifications that are important to developers,” Pearce said. “If you’re an handset manufacturer or a browser maker, HTML5 is a vast space. There are an array of possibilities. But there are some APIs that developers really want. If you’re a photo sharing app, you literally can’t build an HTML5 version because browsers don’t provide access to the camera.”

The hitch is that Apple and Google, maker of Safari for iOS and Android’s pre-installed browser and Chrome, aren’t in the working group.

Secondly Facebook co-created a test suite, called Ringmark, that helps developers understand which mobile browsers support the features they want to build.

“There are lots of specifications in the HTML5 arena which have yet to be built,” Pearce said. “The browsers that are on these devices are constantly evolving. It’s not a stationary target.”

He added, “Our test suite includes a series of rings, which represent priorities. Ring ‘0’ is what browsers do today. Ring ‘1’ what they’ll need to do year or two and so on.” In Ring 1 are up-and-coming features like camera access, orientation lock and hardware acceleration. Then down the line, there are more advanced specifications like support for WebGL, which would power 3-D games. “It’s an obvious bottleneck,” Pearce said.

The last piece is payments. On mobile phones, Facebook users can pay through standard methods like credit card or Paypal. But this week, the company added the ability to do carrier billing with several of the largest mobile operators in the world. Although Facebook is likely losing money or barely breaking even on these types of mobile web payments because of the steep share they must pay carriers, the company is probably comfortable eating costs until mobile web-based payments becomes a credible alternative to in-app purchases on iOS or Android.

“Our goal is to maximize the opportunity for developers to get their apps monetized through these kinds of channels,” Pearce said.

Facebook is probably paying an arm and a leg for its new carrier-enabled, mobile web payments system

Now that Facebook finally unveiled carrier-powered payments for the mobile web yesterday, it’s time to look at what the potential costs might be. Last month, U.K.-based mobile billing and analytics provider Bango announced to shareholders that it had a new partnership with Facebook, but that it couldn’t disclose the terms. Bango powers billing for app stores and also has a deal with Amazon.

Here are Bango’s standard payout rates for the carrier partners Facebook mentioned yesterday. (Important note: These are not Facebook’s actual rates. These are Bango’s standard rates. It is likely that because of Facebook’s clout and scale, the company wrests slightly more favorable terms. Bango’s chief executive Ray Anderson actually gives some color in the comments below. But this should give you an idea of how expensive the carrier’s cut is for Facebook.)

Bango’s standard carrier payout rates:

AT&T – 60%
Deutsche Telekom – Unknown, because Deutsche is not a Bango partner.
Orange – 83%
Telefónica – 55%
T-Mobile USA – 57.5%
Verizon – Unknown, because Verizon is not a Bango partner. is only available to Bango’s strategic partners.
Vodafone – 79.2%
KDDI – Unknown, because KDDI is not a Bango partner.
SOFTBANK MOBILE Corp. – Unknown, because Softbank is not a Bango partner.

Since Facebook pays out a 70 percent revenue share to developers, any time a carrier remits less than 70 percent, Facebook is taking a loss on facilitating these transactions. When you factor in the research and development costs of building the mobile platform, it’s almost certain the company will be losing money on this area of the platform for some time.

Update: Bango’s chief executive Anderson gives some helpful context in the comments below. He says that special partners often have better rates. He says that Blackberry-maker Research in Motion uses Bango to power its Blackberry AppWorld and gets 70 percent back from AT&T. That’s better than the normal 60 percent rate listed above. But even if Facebook got 70 percent back from AT&T, it would still mean that the company is taking a loss on these transactions since it pays all of that back to the developer and must still invest in R&D and maintenance for the platform.

Now to anyone in the mobile industry, this really shouldn’t be a surprise. Terms for carrier billing have always been onerous. After losing so much of their power to Apple and Google over the last five years, carriers are maintaining a steadfast grip onto mobile payments — one of their last and most potentially lucrative revenue streams that distinguishes them from being “dumb pipes.”  It’s hard to see them giving up revenue share or additional control to Facebook even if it means a better user experience and greater transaction volume.

Facebook has dealt with this in the past as it’s been possible to pay through carriers for Credits on canvas games through the Zong partnership. Google is also in a similar position when it comes to in-app payments on Android via carrier billing.

Facebook users can still pay for Credits by directly entering their credit card information into a web form, thereby keeping the 30 percent revenue share. But that’s often not the best user experience since there are many friction points as people have to go through a multi-step process when entering their credit card numbers. What Facebook announced yesterday is more seamless. In a one-step process, consumers can click to pay with Credits on mobile web apps and have those charges delivered to their monthly phone bills.

But the complexity of setting up a decent mobile payments infrastructure underscores a risk Facebook mentioned in its IPO filing. Facebook acknowledged that increased usage of the company’s mobile products may undermine its financial performance.

The company said in its filing at the beginning of the month:

“We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. Accordingly, if users continue to increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our revenue and financial results may be negatively affected.”

One way that Facebook could make up for these losses is in mobile advertising, which the company just unveiled in a New York-based marketing conference today.

Google to share Android app templates tomorrow to bump up design quality

In another nudge to raise the design bar for Android apps, Google is releasing some templates or stencils tomorrow that should help developers make their apps look more elegant.

It’s part of a big push from Google over the past few months to have a more consistent feel for the Android platform. The effort is led by Matias Duarte, a senior director for user experience who came from Palm.

A few months ago, Google launched a design tutorial site, followed up by a formal style guide that came out in January. It also started requiring Android compliant devices to offer the “Holo” design theme, so that app developers had the option to save time by relying on one consistent look for apps that came with every device.

“This is part of an ongoing conversation we really want to have with the design community,” Duarte said in an interview. “We want them to know that we take this really seriously and we want to give them the tools to succeed.”

Duarte said he would have done this earlier if it weren’t for the resource and time constraints the Android design team had.

“This was always part of my agenda. If we could’ve launched the Android design site with all of the tools and templates at the same time that we released Ice Cream Sandwich, we would have,” he said. “But unfortunately, we are a very tiny team.”

Of course, the challenge with overseeing an ecosystem of 450,000 apps at a company with a more open philosophy like Google is raising the quality bar without necessarily excluding any single developer’s ideas about what makes a good user interface or experience.

“We don’t want to do anything to enforce this,” Duarte said. “It’s important to us — whether that sounds naive or willfully unique — that developers get their vision out there.”

So fostering better Android app design is more about using the carrot, rather than the stick. Duarte and the design team have been in discussions with employees at Android Market and developer relations about how to feature or reward more thoughtfully designed apps with better marketing in the app store.

“We think it’s a great idea. We want to find a way to highlight developers and who are embracing design standards,” Duarte said.

Soundcloud’s savvy way of mixing HTML5 and native apps for growth on mobile

HTML5 may fall into the experimental category for many app developers (especially in games) because of problems with performance and monetization.

But for a handful of highly-social apps, a dual strategy with HTML5 for brand new users and native apps for devoted ones is the way to go.

Germany’s Soundcloud is one of these. The company, which is backed by Kleiner Perkins and Union Square Ventures, recently brought its HTML5 mobile web experience to parity with the native iOS and Android versions after six months of intensive development work.

Because much of Soundcloud’s usage is about listening to tracks from artists and DJs and sharing music with friends or followers, the service gets a great deal of its traffic through blogs, Facebook and Twitter. That kind of viral traffic doesn’t necessarily translate well into either the iTunes or Android app stores because both stores lack decent social channels for sharing and discovery.

So Soundcloud leverages HTML5 and Facebook’s overhauled mobile platform to ease new or casual users into listening to tracks shared by friends. They then upsell the native apps for truly dedicated Soundcloud users who want native functionality like the ability to record sound.

“We can do 95 percent of what we want to do with HTML5,”  said Thom Cummings, Soundcloud’s vice president of marketing. “We used to push our native apps a lot, but now HTML5 is really performing.”

Late last year, Soundcloud unveiled HTML5 widgets that run natively in the browser, allowing users to play tracks from their iOS devices. Their prior approach didn’t work as well given that Adobe Flash doesn’t function on the iPhone. Coupled with Facebook’s recent launch of viral channels for mobile web and iOS apps, this fueled a bump in Soundcloud’s daily active users (or DAU) on Facebook. Soundcloud’s DAU on the social network has quadrupled in the last three months to 400,000.

Soundcloud’s strategy underscores the key consideration developers have to take into account when deciding whether to go HTML5, native or both. If your traffic is highly reliant on referrals from e-mail or social networks, HTML5 is a great way to go assuming there aren’t too many performance differences. But if you rely on direct traffic or can afford to play the paid user acquisition game on iOS or Android, then it may make sense to go native.   

Many game developers — even ones that have been historically dependent on Facebook — like Zynga and Funzio take a different tack than Soundcloud. Because they have businesses that generate millions of dollars in monthly cash-flow, they can just spend on advertising to climb up the app store charts and acquire users. Facebook is nice, but not absolutely necessary for them. Indeed, in some of Zynga’s more recent games like Dream Heights and Dream Zoo, the Facebook integration is buried at least two clicks into the game instead of being front and center.

However, for other categories of apps that are inherently social — like music, photo-sharing or news media — that haven’t nailed their customer lifetime value or have yet to generate significant cash flow, an HTML5 strategy that relies on iOS’ Twitter integration and Facebook’s mobile viral channels is essential.

Soundcloud has been busy strengthening its Facebook mobile integration over the past month. Two weeks ago, the company took advantage of a new deep linking feature that lets links shared in the news feed or notifications connect to specific parts of Soundcloud’s HTML5 or iOS experience. Before, such links would either just open the main app or direct users to the app store. Now when Facebook users see a Soundcloud link in their feed, it will take them directly to the shared music track, which just makes for better overall user experience.

“It’s interesting to see native applications finally start to speak to each other,” Cummings said.

Soundcloud is also taking an active role in making HTML5 go the last mile. One of the reasons many developers still go native is that Android and iOS apps can hook into core device functionality like the camera that HTML5 apps can’t. Right now, there isn’t widespread support for sound recording in mobile web browsers. Soundcloud supports, an HTML5 audio test suite for web apps.

“As a company on the forefront on the sound on the web, we’re trying to push the boundaries of what you can do,” Cummings said.

Facebook partners with world’s largest carriers to bolster mobile web-based payments

Facebook has partnered with some of the world’s largest carriers to make the experience of paying with Credits more seamless on the mobile web.

The company has done a deal with AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI and Japan’s Softbank Mobile Corp to let Facebook users pay more seamlessly with Credits through carrier billing. The deal comes at a critical time for Facebook as Apple’s iOS and Google’s Android platforms threaten to cut the social network out of influencing and earning revenue from the mobile app ecosystem.

Facebook’s chief technology officer Bret Taylor said that the current system for making web-based payments has too many friction points to make it useful to consumers or developers.

“Right now, the payments experience on the web is just broken for end users,” he said in a keynote at Mobile World Congress in Barcelona. “Even with operator billing support, most require a step called SMS device verification. That means if I’m in the middle of the game and I want to pay 99 cents, I have to wait for an SMS to arrive.”

After that, the user has to verify that the device is connected to their Facebook account.

“Then I have to awkwardly memorize the code and resubmit the transactions,” he said. “If I manage to make it this far, then I can finally go back to playing the game.”

With the new solution, third-party developers will be able to integrate a single SDK that lets their players charge their monthly phone bills in a single step through Facebook.

Having a fluid payments flow could go a long way in convincing developers to spend as much time on their HTML5 apps as they do on their native ones. To make HTML5 viable for mobile developers, Taylor said Facebook needed to focus on three problems: 1) discovery 2) fragmentation and 3) payments.

Facebook is addressing discovery with new viral channels for mobile apps that it launched last fall. On the second problem, Facebook also announced an industrywide group today that will push mobile web standards forward in concert with the W3C, or World Wide Web Consortium.

The payments agreements address the third problem. The only thing that seems certain about this new arrangement is that Facebook must be paying a lot — if not nearly all — of its 30 percent revenue share to carriers in this deal. Google knows this situation well, as it had the same hurdles in negotiating revenue share for carrier billing on Android.

The other problem that Facebook is confronting is that it likely only has a tiny percentage of users that are sharing payments information with it. Apple has more than 250 million iTunes accounts with billing information attached to them. In contrast, I would bet that Facebook has payments information or credit card data on around 30 million users or less, considering that around half of its 845 million monthly actives play games, and then 2 to 6 percent of those monetize through virtual currency purchases. The platform’s biggest developer Zynga saw only 2.9 million of its 153 million monthly unique users pay for virtual currency last quarter. So Facebook is likely facing the same uphill battle Google has been dealing with in convincing more users to pay on its Android platform.

Facebook puts its weight behind industry-wide initiative to push HTML5 forward

Facebook announced a new industrywide consortium including manufacturers like Samsung and carriers like AT&T and Verizon meant to push HTML5 forward with a single set of standards. It also announced a test suite called Ringmark, that will help everyone from manufacturers to developers test to see whether their mobile web apps work uniformly across devices and platforms.

Called the W3C Mobile Web Platform Core Community Group, the new industrywide consortium includes players like:

Samsung, HTC, Sony Mobile Communications, Nokia, Huawei, ZTE, TCL Communication, AT&T, Verizon, Vodafone, Orange, Telefónica, KDDI, SOFTBANK MOBILE Corp., Qualcomm Innovation Center, Inc., NVIDIA, ST-Ericsson, Intel Corporation, Texas Instruments, Broadcom, Mozilla, Opera, Microsoft, Adobe, Netflix, VEVO, Zynga, @WalmartLabs, Electronic Arts, Sencha and Bocoup. You can read more about the group, and how to join, here.

Apple and Google are conspicuously absent.

Over the past year, Facebook has turned to HTML5 as a way to circumvent a mobile ecosystem that is increasingly dominated by Apple and rival Google. Because Facebook does not own the lower levels of the mobile stack with a proper mobile operating system like iOS or Android, the company’s options for deriving revenue from third-party mobile apps like payments or fees are more limited. If HTML5 improves, Facebook will have an easier time convincing developers to build for the web instead of focusing on native iOS or Android applications.

Facebook’s chief technology officer Bret Taylor said that the company had to address three pain points in fixing HTML5 for developers: 1) discovery 2) fragmentation and 3) payments.

“There’s no app store for the mobile web, so there’s no easy way to have users discover mobile web apps,” he said. “Secondly, technology fragmentation means developers don’t know which parts of HTML5 work on which devices. Thirdly, there’s no easy payments solution for the mobile web.”

Addressing the discovery problem, Facebook launched new viral channels for mobile apps late last fall. That lets activity from mobile apps appear in notifications and news feeds. If users click on links from apps in the news feed, that will take them either to the app store where they can install the app or to the relevant part of the app.

Facebook pointed to a couple case examples where the mobile platform has been able to drive serious traffic. Taylor said Facebook is the top referrer of traffic to Spotify, bringing the social network 7 million users in its first month. Those users are twice as likely to pay. He also said that 20 percent of Pinterest’s users come from Facebook.

The problem, however, with many of Facebook’s example mobile apps is that they’re ones that already have a strong competency on the desktop version of the platform. Or they are preferred partners that get special treatment from the company. Spotify, which shares a key investor with Facebook in Sean Parker, got a spot on-stage at Facebook’s last developer conference while many other music apps were mentioned in passing. So it’s unclear whether Facebook’s mobile platform performs for brand-new developers that do not already have a strong footprint on the desktop version of the social network.

The new industrywide group, created with the involvement of W3C or the World Wide Web Consortium, is meant to address the second problem with fragmentation. It’s meant to speed up improvements in mobile web browsers so that HTML5-based apps works uniformly across devices.

The new test suite, Ringmark, can be found at It includes more than 400 tests to help developers see whether their web apps will work properly in different mobile web browsers. The tests run the gamut from ones that examine basic features for mobile web apps, to more sophisticated ones that will eventually allow developers to access features like a phone’s camera. Ringmark was built with the help of Bocoup, a Boston-based open web technology company.

Apple makes a stealth appearance at Mobile World Congress with iAd party

It may be beneath Apple to have a formal presence at any event that isn’t its own.

But the company is making a secret appearance at Mobile World Congress, an event it has long shunned despite the revolutionary impact the iPhone has had on the entire industry.

iAd, the mobile advertising network Apple built through the acquisition of Quattro two years ago, is having a secret party at a hotel off Barcelona’s main tourist drag, Las Ramblas, on early Tuesday evening, sources tell us.

After slashing minimum buys in the face of increasing competition from Google’s AdMob and other emerging networks, Apple’s iAd needs to do more to build mindshare and market share among developers. We hear that the minimum buy for smaller publishers (not the agencies representing big brands) is around $20,000. For certain developers, they’ll go as low as $5,000. Apple is also bumping up the revenue share it gives to developers to 70 percent starting April 1, up from the previous 60 percent rate.

Over the last month, we’ve seen several players in the mobile advertising industry slash minimum bids. A few weeks ago, Google’s Admob moved towards a more classic AdWords-style auction system with no minimum bid whatsoever. It also eliminated targeting fees.

Tapjoy, another user acquisition channel that has migrated to Android after being unceremoniously pushed off iOS by Apple, also recently cut its minimum bid to as low as 10 cents per install.

At our conference Inside Social Apps two weeks ago, Tapjoy’s chief executive Mihir Shah insisted that there are actually developers who are able to get their cost-per-install down to 10 cents a pop. That’s quite low considering that the average cost to get a loyal mobile user on iOS is around $1.81, according to Fiksu, a company that finds cheaper and more effective ways to get users for mobile apps from across many different ad networks.

At the time that both AdMob and Tapjoy cut their minimum bids, they told me their decisions had to do with the maturity of the mobile advertising market. AdMob’s service needed to be more streamlined into the way that Google sold ads for the desktop web.

“There’s enough volume in advertisers now where this makes sense,” Google’s George Meredith, who handles global sales and product strategy, told us in an on-stage interview two weeks ago. “Now that we’re getting closer to a unified system where AdMob display ads are being integrated with [Google's other ad products], this move makes sense.”

By cutting minimum bids, it will be easier for many kinds of mobile developers beyond cash-rich gaming studios and consumer brands to participate and pay to get quality users.

Shah said in the same on-stage interview, “Not everyone there will want [Zynga's] Dream Zoo. They may want communication apps. The big players can basically outbid everybody else.”

All of this makes for a very competitive environment that has undermined Apple iAd’s original positioning as the premium mobile ad network. Spending on user acquisition has become more important for developers over the past year as both the iOS and Android app stores have become filled with close to 1,000,000 apps vying for consumer attention. Google said today that Android Market has 450,000 apps, up from 150,000 a year ago.

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