By: Hillel Fuld (@hilzfuld)
Let’s not beat around the bush here, you see Nokia in the title of an article and all you can think is “Nokia? Did you hear about their earnings last quarter??” To that, I say, some perspective please.
Net sales $9.5 billion, 83 million phones sold, 6.5 million smartphones sold, and that’s right before a huge new OS is released, which means people are more hesitant to buy (and rightfully so, since the Lumia line won’t get upgraded to Windows 8, but that is a topic for another time).
If you are going to compare those numbers to Apple, then yes, Nokia is in big trouble right now, but if you look at them objectively, the company is far from dead. In fact, it is far from the situation Apple was in when Jobs returned to the company. And they did ok.
Now that we got that out of the way, what is Nokia going to do to fix this situation and differentiate itself? Well, two things:
1: Innovation in technology: Say what you want about Nokia but they always knew how to make phones. The new Lumia phones are no different. In fact, one might argue that they are among the most impressive mobile devices out there today, from a hardware perspective.
2: Developers, developers, developers: Yes, I know, I stole it from Ballmer, but that catch phrase has become the new “Location, location, location” so anyone can now use it. No, but really, Nokia has understood what other platforms have not, the success of a mobile ecosystem is completely dependent on its developers.
Putting aside the Lumia and Nokia’s level of innovation for now, let’s focus on the second point. Nokia is shipping new initiatives for developers almost daily. Whether it is incentive to develop on their platform, Windows Phone, or better tools to actually develop with, Nokia knows it needs to focus on developers.
It is for this reason, Nokia just announced a pretty awesome partnership with inneractive, called NAX (Nokia Ad Exchange).
A Little Background
With all the advancements we have made in mobile technology and the importance of mobile apps, two major problems still exist. Discovery and monetization.
Finding relevant apps in any of the various app stores, including Apple, Android, and even Windows Phone is not a simple task. The vast number of apps make it difficult for developers to stand out. Even worse, once they tackle that problem and manage to stand out, lots of downloads do not necessarily equal lots of revenue. Why not? Well, because, we now know based on every study ever done, people do not like to pay for apps. Just to give one number, 81% of iOS apps downloaded last year were free.
And so, pay per download is not the way to go. So what is? Well, a mobile phone is always on, always connected, and includes so many sensors that it would be silly not to take advantage of them. The answer? Hyper-local, global, and targeted rich media mobile advertising. Yes, that is a scary sentence.
In simple words, the phone knows where you are, what you like, and has the capability to leverage video and other rich formats such as HTML 5 to serve engaging and appealing, non intrusive ads on a global scale.
Meet inneractive, a company that works with over 120 ad partners to maximize mobile app revenue. It is really very simple. You are in NY, there is no reason you should see an ad for a venue in China, right? Nokia is a truly global company with users all around the world. Well, with all those ad networks and agencies, inneractive serves the most relevant ad for the consumer, which means more engagement (clicks), and more revenue for the developer.
Nokia agrees, and so it just launched NAX (Nokia Ad Exchange) powered by inneractive.
Here is the catch and the reason I say Nokia is thinking out of the box on this one. NAX works on Nokia apps of course but iOS and Android developers can also monetize their apps using NAX. That was a gutsy move by Nokia.
NAX, technologically speaking is inneractive’s platform and secret sauce, including real time bidding for campaigns by the advertiser, a developer dashboard, rich media, and local targeting. The result? Higher eCPM for the developer, which directly translates into more revenue. Oh, and by the way, remember the other problem I mentioned above? The discovery issue? Well with the NAX Campaign Uploader, developers can also promote their apps!
The way NAX works in terms of revenue is super simple. A pure revenue share model between inneractive and the developer. 70% to the developer and 30% to inneractive. Nokia takes nothing. Again, gutsy move by the Finnish company.
Will this turn Nokia into the market leader overnight? Nope. What it will do, however, is show consumers and developers that despite what one would believe from reading the press, there are other options out there in the mobile landscape.
If Nokia continues to ship awesome devices with Windows 8, which by almost all accounts, is a fantastic OS, the only component that is missing and standing in the way of success is a large number of supporting apps. And that is what NAX is for, to bring on the developers and get them paid for their hard work.
NAX is live and you can read more about it and sign up here.
One more thing. How HUGE is this newS? Take a look at the media coverage below SO FAR:
- Yahoo News
- Tech Investor News
- Inside Mobile Apps
- International Business Times
- Digital Media Wire
- Seeking Alpha
- The Fly on The Wall
- Nokia Conversations:
- inneractive Blog