Zorz LLC. Blog

The Implications & Opportunities of Blekko

Tue, 06 Dec 2011 13:21:55 -0500

So I’ve just been watching the ustream of Blekko by founder and CEO Rich Skrenta.Blekko has both an amazing idea and a product that still has a long way to go.

I love the idea of the slashtags to a degree – the ability to easily refine and drill down through data makes an amazing amount of sense, especially the date slashtag. What I see as an issue is adding some manner of intelligence to them. For example, the /foo tag is a great idea in theory – make a tag that searches particular sites – but a big risk is spam. After all, if one person makes the tag then what happens when they forget a site? What if /foo only hit techcrunch but not GigaOm? If that happens and Om makes a tag, suddenly the utility of the tag is diminished because you get “tag spread” where thousands of overlapping tags hit the same sites, with no clear way to distinguish between them. Tags have to be clearly valuable or they will not be used.

Now, this opens another can of worms when you ask the question “what about other users editing tags?” Spammers could add their sites to the tag; if I add an adsense scraper site to the tag and people do /foo/date and see my links at the top, I can get them to click and hit my site with little real value. You can argue that the site won’t make it into the index because it is low quality, but that is never a sure thing (not even with Google). In order to make it useful, a balance needs to be struck.

Now, these are theoretical questions that will only be answered over time, but I do see the immense potential of this system. The question is, how well can it be refined so that a truly usable product emerges? I look forward to finding out.

Monetizing & Mobile Applications: Part 2/3

Tue, 06 Dec 2011 13:21:08 -0500

Free Apps Make Money – Here’s How

So, in the last installment of this series we talked about ways to make money with a free app. There’s lots and lots of ways, but I cited 3 in total:

Updated Functionality or Content
Relevant Products or Services
Targeted Advertising

Now, for the sake of an example, let’s come up with a simple application for a mobile device. This application will allow a person to find a clean restroom nearby – note, this has already been done in the silly-but-practical Sit or Squat. It may have been done before, but how could this app make money while being free to the user, without the sponsorship by Charmin?

Avenue 1: Membership

Ok, the most obvious here is having a membership option for the site. Allow people to use the app for a short time for free, and then charge them a small amount per month to continue using the service. The value proposition is clear: if you don’t like it, don’t pay – but if you do, keep it. Users could receive access to the social aspect of the application (like updates on restroom cleanliness or ratings, etc) as well as other informatio

Avenue 2: Parallel Products

So, this kind of monetization, a fancy way of saying relevant products or services, centers around having something that isn’t directly a part of your application that users may want or need. Charmin is a start, but for the purposes of a toilet-finder application we need to come up with something a bit more interesting. Possibilities include: sponsorship by a hand sanitizer/soap company, phone pin opt-in for a coupon list with a free travel toiletries kit on sign-up, etc. The key is to find something useful that is even slightly relevant to the situation the user is in when they use the application.

Targeted Advertising

This is somewhat harder with recent restrictions by Apple on the use of location data – it cannot be used just for ads – but it is very valid. This is literally the simplest way to earn money and often for new apps is the best, as it requires an AdMob account and that is it.

What does it all mean?

Put simply, there’s several ways to make money on your application. The three I’ve outlined are about the easiest, but there are several more avenues and even some new ways of making the app have built-in micro transactions. Next up, we’ll take a look into what the future may hold!

From Mobile Barely to Mobile Friendly with WPTouch (Updated)

Tue, 06 Dec 2011 13:18:17 -0500

Update: We no longer use WordPress or WPTouch, so this article is out of date and our recommendation no longer is accurate.

Well, tonight I had to completely redo the web site for Zorz in preparation for a busy spring and summer. However, as I’m developing apps now I realized I very much need to make sure that the site is mobile friendly. As I’ve known about WPTouch for a while, I decided to make use of it to see how well it would do. I’m very pleased to say that this WordPress theme is in a word: excellent.

Installation:

The installation process was literally exactly the same as I would expect for most plugins – completely seamless. Once activated, the plugin was active and I could browse to the site on my iPhone and the iPhone simulator also worked with it. It was very easy to set up and use, and I did like how they made plenty of options in the preferences page for the plugin.

Gripes:

My primary gripe centered around just how massive the preferences page is. I like having lots of customization options, but it needs to have its own section in the WordPress admin and needs to be broken up into seperate pages. Having to scroll through such a list was daunting, but overall it is only a minor issue.

Conclusion:

WPTouch is a great plugin and is essential for anyone getting into making mobile friendly sites with WordPress, or pretty much anybody who wants to be able to make a site accessible via mobile quickly and easily. I highly suggest you give it a shot – you will be impressed.

Monetizing & Mobile Applications: Part 1/3

Tue, 06 Dec 2011 13:15:44 -0500

What Profit Is There In Free Mobile Applications?

Quite a lot!

Something to always remember when developing a mobile application is to understand that you can deliver plenty of value with an application for free and still make money. More than just placing some AdMob ads, developers can monetize an application with many different avenues.

Opportunities To Deliver Value

Updated Functionality or Content:
Does your application change? Are you pushing content to your users that is relevant to them? You can charge for it, even a small amount. $1/month may be small, but it adds up really fast, especially if you have an application that stays relevant.
Relevant Products or Services:
Look at the vertical your application falls in to. Can you find something related that would be of value to a user? If so, will vendors in that space pay you for each signup or install? This way you can deliver valuable additional services without developing it yourself.
Targeted Advertising:
A simple banner doesn’t cut it and can be easily ignored. Instead, is there a way you can sell ad space that is targeted? If you can profile your users, search for other vendors in the space that need to reach them. If needed, don’t make it a banner – make a notification or a separate tab for it. Test your method so you can understand what gets attention without being annoying.

One thing I have noticed as a parallel between being an affiliate, an agency and now a mobile app maker is that ways of delivering value to people remain largely the same. As an affiliate, you need to have a site that can live without the links. As a free app developer you need to tie your monetization to delivering something the user will want or need. Either way, value is required to make it viable.

In the next post this week I’ll be going over a specific example of a way to monetize a free application. Stay tuned!

The Impact of iAd on Mobile Apps

Tue, 06 Dec 2011 13:13:28 -0500

Apple recently revealed iAd at a press conference and I have to say I’m quite excited about it. Regardless of the nature of the advertiser/agency/apple relationship, I think what they’ve come up with is a solid opportunity to create much better ads that can deliver a richer experience to the user.

However, people have cried foul at the concept of more ads being available in iPhone/iPad applications. I think it should be pointed out here, that many of these arguments are, in a word, bunk.

Why Mobile Ads Are Essential

Paid apps, while an essential part of the ecosystem of mobile apps, are only a part overall. A user is not always going to be willing to shell out money for an application, and many apps are not even worth a significant enough amount of money to make it worthwhile. For example, it may be possible to develop an application and sell it for $1.99. Let’s say in 6 months you get 20,000 downloads. ~$40,000 at first glance looks quite good. A lot of that could be profit if your app took two weeks to build (I am being quite conservative here). But, it starts to break down once you get to the next version, and the next, and the next. As features are added, cost of development goes up, and at that price, margins go down.

The Nuts And Bolts Of Mobile App Monetization

Now, as an app grows in features, so should the user base. If you make version 2 of the application, and still charge $1.99 per download, but sell 40,000, that is a pretty big jump in gross revenue. However, what about the development cost?

Profit = Revenue – Expenses

This is a simple equation that we all basically know. But lets plug some numbers in here for good measure:

Version 1: $40,000 Rev. – $10,000 Exp. (est.) = $30,000 Profit
Version 2: $80,000 Rev. – $50,000 Exp. = $30,000 Profit

Now, that is a big jump in expenses, true. However, expenses jump steeply quite easily. As your app grows and you add features – say integration with FourSquare and Yelp – that takes time and money. You also need to market it so you start to do some advertising of your own (oh, the irony) to drive more installations. Expenses will grow over time. The profits between versions may seem to be good, but it is actually a major drop in the profit margin – 300% to only 60% – and that number will drop over time.

In short, to develop an application that can grow, make money and stay ahead of the game, application developers need to do one or all of the following:

Find alternate avenues of monetization (ie: ads)
Raise application prices
Lower costs
Increase installs (marketing!)

No one wants to pay more for apps and no one wants to start outsourcing app development or features, so there isn’t much of a choice. Mobile ads are here to stay. I understand some people being unhappy with such a major company pushing a big platform, but I feel iAds will do a great job.

A Richer Ad Experience

I think quite a few people don’t realize yet that the ad in the application will be no more obtrusive than before – possibly even less so. Apple, the kings of clean user experiences, have absolutely no desire to make it possible for junky ads to clutter up applications. If ads are overly obtrusive or annoying, people become “banner-blind”.

I understand Mark Wilson’s issues in this article, but I also have to disagree quite strongly. The assumption seems to be that the ads will diminish or detract from the user experience in significant ways. However, in the end it will likely be the exact opposite, but we will see as people vote with their downloads.