An Interview with JiWire’s Kevin Ching about Mobile Advertising and Location
By: Hillel Fuld (@hilzfuld)
You might have noticed we have been interviewing some serious industry shakers lately. Well, this time, we interviewed Kevin Ching, who is responsible for product management and advertising/media solutions at JiWire. JiWire is the leader in connecting advertisers to today's On-The-Go Mobile Audience, using the world's largest location-based interactive media channel.
JiWire's platform enables advertisers to identify and deliver ads to audience segments based on a person's physical location while taking the venue type and brand into account. With a goal of engaging users however they connect to the Internet while on the go, JiWire provides a cross-channel solution that extends location-based targeting to multiple devices, from smartphones to tablets across content channels from Wi-Fi to the Internet to mobile. To find out more about JiWire, click here.
1: Please tell me a little bit about yourself and your background, both personal and professional?
Professionally, I have worked in mobile advertising as a product manager since 2005, back when carriers controlled everything - before the iPhone changed the industry – so I have seen a lot happen in mobile over the years. I am currently Director of Product Management at JiWire and am responsible for the company's advertising data, audience targeting capabilities and reporting initiatives. I have built and launched several advertising platforms in my carrier, including a mobile app reporting platform, a premium publisher private exchange, and now the Location Graph at JiWire. I consider myself one of those guys that once I have a vision for a product, I can't imagine a world without my product and work hard to make it as simple and user friendly as possible.
Personally, I live in Berkeley and am married with a three year old son who's about to start his first year of preschool. Some of the things I enjoy outside of work are cooking (I was a sushi chef in Santa Barbara for two years), sports (I played soccer for UCSB and still continue to play in rec leagues), and literature (I have a Masters in Creative Writing and have published several short stories).
2: What is JiWire and who is your primary audience?
JiWire is the leading mobile location advertising company. We use location to help brands identify and reach their mobile audiences at scale. We have built the largest pure lat/lon advertising platform across all connected devices via mobile app and public WiFi networks. This data has fueled the Location Graph, which uses past and present location to identify audiences on mobile. This targeting capability delivers 30 – 40% higher campaign performance for our customers, as well as increased efficiency and scale. Our customers are agencies and Fortune 500 brands. Our main customers are top brands like American Express, Best Buy, British Airways, Comcast, Google, Microsoft, Volkswagon, Wendy's, etc…
3: Let's talk about mobile monetization. Many are skeptical about mobile developers maximizing revenue for their apps. What are your thoughts?
The number one thing that will make a mobile developer money is delivering a large, highly engaged, highly targetable audience on a consistent basis, and then being able to communicate to marketers something about who that audience is. So the two basic ingredients for success are creating a large user base combined with audience data so that marketers can be intelligent about how they spend their advertising dollars.
Whenever possible, a developer should try to learn information about their audience, but do it in a way that is natural to the app's flow and provides a clear value exchange to the user. For example, precise lat/lon inventory that uses a device's location functionality is usually more valuable than non lat/lon inventory. However, developers don't automatically have access to that data for free. Developers need to be judicious when it comes to collecting location data. Just because location data makes mobile more relevant to advertisers doesn't mean that users will provide it unless there is a clear exchange to the user. In fact, recent studies have shown that collecting location data when there isn't a clear value proposition to the user will make a user not download the app or delete it once it has been removed. So a developer needs to strive to build services that collect information in a way that in natural to the application.
But then, assuming that a developer does everything right and is able to collect user data within the natural content of the app, often times that data is not enough on it's own. For example, the most common use case for a geo-tagged ad request in today's market is a geofence. This is a use case that the mobile industry has been touting for a long time, however, it has not really unlocked the value of location data and the total mobile advertising spend compared to online spend proves that. So the other thing that a developer needs to do is partner with an advertising partner that specializes in advertising. These companies, of which JiWire is one, spend all of their time and effort building technology that enables marketers to buy their audience at scale. Since these advertising companies have more access to data from a variety of supply sources, the good ones can offer advertisers more targeting and therefore more value to each ad request, which in turn results in higher CPM's for the publishers.
To sum, I think it comes down to two things
- Developers should focus on the one part of the equation that they have control over. Developers should focus on developing the best content for their users and do everything possible to build a large, highly engaged audience. Developers should design with a value exchange in mind – that is, in exchange for a user providing data to the app, how can the app use that data to provide a better experience for the user. And by "better experience", I don't mean a better advertising experience. I mean an experience that is relevant to the app.
- Work with partners that can monetize their inventory and make it more valuable and efficient for brands and advertisers.
4: Is advertising the best monetization route for mobile apps?
I think there are three types of apps in the market:
- There are "brand" apps like the ones being created by Home Depot and Walmart that are developed to help a brand provide a mobile experience for their existing customers. I think there is still room to grow with these type of apps, especially as big box retailers create tools to combat show rooming. I see a world where big box retailers will offer free WiFi to their customers (which customers will appreciate as cellular data charges continue to increase), and by granting this access, the big box retailer will find a way to "digitally greet" their customers as they log into WiFi. And in this digital greet will be a great way to help customers shop within the store.
- There are also "freemium" and "subscription" models where apps get revenue directly from users in exchange for content or services
- And there are free content and utility publishers and yes, for these apps, I do think advertising is the best monetization route. Customers have so many choices these days that I think most will go to a competitor if a publisher tries to charge a subscription fee. The two tricks here are to provide a clear value exchange for users so that they will be engaged and provide their data in return for value, and to partner with an advertising company that specializes in monetizing that inventor
5: What are three tips you would give mobile developers just starting out?
I alluded to this a bit above but my belief is that loyal users are your biggest asset.
- Always be striving to delight your users with invigorating content and reasons to use your app and everything else will follow from that. Create a clear value exchange for users whenever you want them to do something for you (like provide data). This is especially true for location data.
- Design with privacy in mind. Be transparent about what data you collect and how you use it/share it.
- Find a partner that can help you monetize your inventory
Concentrate on the best user experience, adhere to "Privacy by Design", find the right advertising partner and everything else will follow from that.
6: What are your thoughts on the different mobile platforms? Who will survive, lead, and who will disappear?
Facebook will be a force. They have too much data not to be relevant. However, I think their break-though will be when they figure out how to be a CRM solution in addition to an advertising solution. I think what they are doing with Search and where they can take search will be powerful. I'm not convinced that standard banners on Facebook, even if targeted to the right audience is right on Facebook. I don't think that's the right user mindset for engaging with banners.
I think Yelp has done a fabulous job building a great service that is inherently relevant to mobile. They are a great example of the value exchange clearly articulated to users. Yelp is able to collect a lot of user data (preferences, location) in a way that fits right into their value proposition and by doing so they have attracted a loyal following of highly targetable users.
I think Foursquare did a fabulous job pioneering how location can be used in a new way in mobile that was something different and helped articulate the value of mobile location beyond a geofence. Foursquare got a lot of people thinking in new ways that drove the industry forward. However, I do have a few concerns about their long term growth since it seems, at least from what I read in the press, that they are working on repositioning their value beyond the checkin.
I'm undecided about mobile payments. I know it will work eventually since the use case is too compelling (and there's the whole other use case of prepaid mobile payments for those that don't have credit cards), but I guess I'm not sure on when it will happen. Personally, I leave my phone in public places like my desk or on the table way more than I do my wallet (i.e. my credit card) and so I'm not sure I want my credit card stored so easily on my phone to make a payment. I think there are some "secure transaction" advancements that need to be made before someone like me, let alone my mom, would feel comfortable with it.
Twitter will obviously still continue to be a platform, but the best advertising solution I've seen for Twitter is Local Response. I think those guys are awesome. But I don't think that generates any money for Twitter so those guys still have to figure out their monetization, and the best solution I've seen on their platform came from a third party so interesting problems to solve there. Interesting to note that eMarketer put out today that they predict Twitter makes more money on mobile than Facebook though so they are obviously doing something extremely well.
And then for location, obviously I think highly of JiWire, not just because I work here but also because we are doing something unique. Not only do we use location to drive foot traffic to a store, but since we are using location to build audience profiles that are attached to a device, we address the audience gap that exists in mobile. Many companies use proxies like app category or IP lookup to determine audience whereas JiWire has amassed massive amounts of precise location data and analyzes past and present locations to determine the interconnectness of locations and the different types of audiences that go to those locations.
Lastly, I think you'll see a few dominant "private exchanges" or premium publisher exchanges that will do well. There is too much unsold premium inventory out there and that problem has to get fixed.
7: What phone do you use and why?
I have an Android Droid 2 from Verizon. I love the iPhone but don't have one because my wife has one, as well as almost everyone else I know. So if I want to see how something works on an iPhone, I've got no problem getting access to one. Also, I have an iPad which obviously isn't an iPhone but keeps my connected to the iOS experience. I also like the QWERTY keyboard on my Droid for longer emails. And, I love the Swype typing capabilities.
My next phone in the next couple months will most likely be a Samsung Galaxy III or new iPhone 5.
8: How will the mobile revolution effect the internet advertising industry?
I think the biggest potential for mobile is to change the way marketers think about intent. For example, one of the most tried and true ways of buying Auto-Intenders online is to retarget users who have been on Kelly Blue Book, Cars.com or a manufacturer website. This approach makes perfect sense to me given the online tools that are available (e.g. cookies). However, with the addition of location data, mobile has the opportunity to rethink the way we think about intent. Using the same Auto Intender example, mobile allows us to reach auto intenders by targeting users who have recently been to a car dealership lot. In the mobile use case, a user had to put in a lot of effort and commitment to physically travel to the car lost. The fact that a user took the trouble to go to a car dealership provides a strong argument for intent. That is why our belief at JiWire is that location is a much better indicator of intent than site content. So I really believe mobile is going to cause advertising to be more location based.
Mobile is not only going to force the industry to do a better job defining intent profiles, but also force the industry to do a better job communicating to users. Mobile will force the industry to not only think about targeting the right users, but targeting the right users when the user is in the right state of mind. For example, many of the advertisers I talk to about business travelers don't only want to reach a business traveler. They also want to be able to reach a business traveler when that user is in a business frame of mind. Because of mobile's access to location, mobile advertisers have the ability to message based on state of mind. For example, for the business traveler example, mobile allows us to know that a user is at the airport or in a Starbucks on a weekday afternoon outside the user's home city, most likely checking email in between meetings. At JiWire, we think of this as delivering the right message to the right audience at the right time. Location is the reason that we are able to do this.
Another revolution that mobile will drive forward is the value exchange for users. Since mobile is a device that literally goes everywhere a user goes, and is connected to the Internet, advertisers are going to find ways of providing value to users in new ways. For example, think of JiWire's "Ads for Access" program. Ads for Access is a way for a brand to provide free WiFi to a user in exchange for the user engaging in some way with the ad, whether that be joining a CRM database, watching a video, downloading an app, etc… This is an example of using the ubiquity of mobile in an innovative way to provide value to a user.
Lastly, mobile will improve attribution methodologies. I know it hasn't happened in massive scale yet but the industry has a lot of innovative tools that will allow it to provide "last mile" or "closed loop" attribution. A few solutions on the market today are mobile payments and loyalty apps that can reward users for going into stores. Check-ins are another variation of this. At JiWire, we are working on another variation of this that we believe is also very powerful.
9: What are the best tricks to maximize in-app advertising?
Again, I think this all comes back to data. The best way to monetize mobile app advertising is by having access to quality data about your users – collecting relevant first party data and then partnering with an advertising company that has access to even more data. As the ad tech industry evolves, brands and agencies are going to make the move to buying audiences on mobile. The advertising companies that can prove the best performance will win and JiWire data shows that "precise" data performs better than "proxied" data. For example, our campaigns show that targeting Auto Intenders based on real data like a user being on a car lot rather than "proxied" data like targeting men because they download apps in the game category will perform better. Another example is geofencing. One way of targeting college students is to geofence a university, however, there is limited scale there and when you try to increase scale by expanding the geofence, then you introduce waste because not everyone in the extended geofence is a student. In this case, the larger geofence acts as the proxy for a college student. However, by targeting college students based on their past visits to college campuses, this approach uses precise data while at the same time providing scale. Some current 2012 campaigns that target college students are performing over 150% better when compared to a similar "geofence" campaign run the previous year. So the best trick is to move away from "proxies" for audience like app category and geofencing and move towards something more precise like exact past and present locations.
Another tactic is to provide a clear value exchange for the user. The Ads For Access example I mentioned above is a great example of this.
Another tactic is to not only understand audience, but also intent. For example, reaching business travelers when they are in a business mindset, not while they are watching football on Sundays. Using present location and understanding user's location patterns is a great way of doing this.
10: How will the mobile industry change in the next five years?
Five thought for five years.
- Location is going to unlock mobile audiences and shift more dollars of the advertising mix to mobile
- Advertisers will be buying Audiences, not content categories. Location will define audience, acting like a real world cookie.
- Every mobile ad will have the AdChoices icon served
- Premium publishers will find a way of selling their inventory in a semi-blind exchange that allows them to maintain their higher CPM over long tail.
- There will be a last mile solution on the market that allows brands and agencies to measure foot traffic ROI