Google I/O 2013 – Making Money on Google Play

IBRAHIM ELBOUCHIKHI: Hello. Good morning, everyone. Welcome to the Making Money
on Google Play session. My name is Brahim Elbouchikhi. I'm Product Manager for Commerce
on Google Play. And Bob Meese over there is
my colleague, who is from Business Development
on Google Play. All right, let's get started. Oh– where's the clicker? Clicker? Oh, here. Right. Sorry. OK. So first, I wanted to start
by just saying thank you. Over the past 12 months, we've
talked to a lot of you. Got a lot of great
feedback that we baked into the product. A lot of the features that
you'll see next have really been developing by working
with you, and getting your feedback. So let's continue that. Let's continue that
conversation. Keep sending the feedback– the good, the bad, the ugly– and we promise we'll keep
working on it, and making things better.

We'll start off with the
office hours, which is happening next. So come on by the Google Play
office hours section, and we'll talk there. So the agenda for today, we'll
first share some data. These are metrics that we feel
are interesting for you as you build your business
on Google Play. Well then give you
a product update. These are features we've
launched recently and their impact, as well as
things we look forward to in the mid-term. Finally, we'll talk about some
case studies about what some of our most commercially
successful partners are doing. And finally, we'll close out
with a Q&A at the office hours by the Google Play section.

All right, so let's get started
with some data. Last year, Chris Yeager
got on stage– I think exactly this room– and showed us the growth
trajectory of in-app. It looked something
like ridiculous– well, reversed, but growing
up to the right. And we were very excited
about that growth. This year, we've actually
done something even more incredible, which is
that we multiplied in-app revenue by seven. So over the past 12 months,
there are very few industries, countries, anything that grows
that fast over 12 months. And is a testament to all the
work you've all been doing. Users are engaged with the
applications you're building, and they're willing to
pay for them, and are really enjoying them.

And so that's just incredible. So we wanted to look beyond the
number, and say what is this telling us about the Google
Play and Android user? And one thing we've learned– and we've heard this a lot from
our Japanese partners– which is omotenashi. And what omotenashi means in
Japanese is essentially, it's hospitality, but it's got
a bit of a deeper sense. It's got more of a personalized
experience. It's almost like not a buyer
and seller relationship. It's a host and a guest. And what this is is essentially
what in-app represents, right? I mean in-app is about getting
the user to enjoy the application, to really get
immersed into it before getting to monetization.

We've heard this a lot in all
sorts of sayings, where you know, focus on user experience
and the money will follow. And that's exactly what
in-app represents. Now, in-app is not
for everyone. And we've got very successful
subscription partners, as well as paid app developers. But if you're able to inject
some omotenashi in your application, then please
do, and give it a try. And that's the message
from this number. Subscriptions launched about
12 months ago, as well. And since launch, we're very
excited that the number of subscribers has doubled
each quarter. Now subscriptions have a pretty
high hurdle, right? I mean, the user has to see
continuous value, they have to commit to a recurring
subscription that's ordering you in.

And so it's got a pretty high
hurdle for subscription. But yet, we're seeing more and
more users taking that step. And that's, again, because of
the applications and the content you've all been
created for our users. There's no better example today
than Pandora, which is a partner that's now in the
top grossing list. One of the few non-games that's
completely based on subscriptions. Now Android is a global
platform clearly.

And Google Play store
is exactly– is equally global. We have buyers in 134 markets. So by pushing that button in
the Google Play Developer Console, and pushing your app
for sale, you make it available to buyers
in 134 countries. This is unprecedented
distribution. Never before has distribution
been this easy and efficient. And for you as a developer,
wherever you are in a world– whether you're a solo developer
or a multinational corporation– we take care of everything
for you. And we just have to push the
button, and get your application out there. Now the countries that we've
overlaid on the map are those that are– some of them are
probably already in your mind. They're particularly large,
growing fast. But there are also other
countries that we feel like are going to play a big part
of the next 12 months. And so we're excited
about that. And we've launched a lot of
features around localization and translation at I/O, so take
advantage of that, and map them up to that set of
countries– the 134– and hopefully you'll see
success globally.

Tablets have been a big
part of Android over the past 12 months. And the way the conversation
generally goes is that we ask you to optimize your
apps for tablets. And as a business owner, you
look at the costs, and you say, well, that's
additional cost. Is that where I invest
my resources? And I know you have very
limited resources like everyone else. And the number I want to share
with you today is that a tablet monetizes at 1.7x
the rate of a phone. So that additional cost of
optimizing your tablet– your application for tablets
is well worthwhile. And we want to see more from
developers doing just that. We've launched a lot of features
on our end, as well– what are the optimization tips
for tablets, or the guidelines to help you do this, as well. The other metric that's
interesting is recent platform releases monetize at 2.2x
their prior versions. So what this is telling us is,
again, as you build your application, take advantage of
the latest platform features, whether it is Google+ sign-in,
or all the APIs that launched at I/O this week.

All of that coming together
actually has a tangible impact on your revenue. It is not just nice to have. They might be actually
required for you. And you can more than double
your revenue by actually adopting these new features. Next is, this is a very
intuitive message, right? Higher-rated applications,
monetize better. But I wanted to give you a sense
of just how much better. If you go from one to two– let's not talk about those. But if you go from two- to
three-star, you're actually almost doubling your revenue. And then again, if you go from
three to four stars, you're actually almost tripling
your revenue. So the conversation we have
around quality, and reply to reviews, and fixing bugs, and
good customer experience, and good support– all of that has now a tangible
impact on your revenue. And that's what we're going to demonstrate with these metrics. Finally, as it was mentioned in
the keynote, over the past year, we've more than doubled
average revenue per user. This is even given the
incredible growth that Android itself has been having– 900 million devices. We've actually grown
ARPU by 2 and 1/2x.

This is the baseline metric
that every platform is measured by– how profitable are we for you. And this is really exciting
for us, this particular development. And it's a testament, again, to
the type of experiences you have been creating, and
how engaging and immersing they have been. So we'll go now into the
product update portion. And I know it might be obvious,
or it might be intuitive, but I always like
to start with a baseline understanding of our mission. Everybody– we've got a bunch of
people who work on payments who are sprinkled
around the room. All of us, we show up to work
every day because we want to make our developer successful. And in the context of payments,
we want to make sure we maximize your income. So when you work hard and
build an application– an awesome application– we want to make sure you're
getting the most value out of that work.

That's just a baseline
understanding. That's why we show up
to work every day. And a lot of us, that's our
goal and objective. So with that in mind, again, I
like to think of things in terms of frameworks that just
simplify the conversation. In this case, I picked a really
simple framework. We try to maximize your income,
which means we're going to increase your sales
and reduce your costs. So our conversation going
forward is going to be around in this context– how are we maximizing your
sales, and how are we reducing your costs in order to
maximize your income? We've also talked
to you about, so what drives your sales. And you told us a
bunch of things. One is the number of devices out
there– how many tablets do we have. The other thing was
how many markets you're targeting, right? So if we're growing really fast
in a particular region but you're actually not
localizing to it or tailoring the experience to it,
you're not really benefiting from that.

The other aspect is the quality
of your application. We just saw, if you go from
three to four, you're tripling your revenue. Your aspect is, how many
buyers do we have? How many credit cards
do we have on file? How many carrier billing
accounts do we have? And then the purchase
experience– how smooth is it? How well does it convert? This all impacts your sales.

And finally, all of
these things that happen after the fact. What if there's cancellations
because of a poor user experience? The user did not get the item
they purchased, and then they call, and that becomes a
poor user experience. So all of these things
drive your sales. Now in terms of cost,
you've told us about three big buckets. These are things we've talked
about in terms of tablets and optimizing for them,
or adopting new platform features. It's engineering work, right? You've got to have engineers,
and you've got to have QA, you've got to have back
office and accounting. You've got your acquisition
costs. Right, so marketing, paid
installs, whatever it is. And then you have your
support costs.

So these are the three
buckets that your costs largely fit into. So with that in mind, I want to
show with you some things we did to help in each
of those areas. So more forms of payment. This clearly comes
up all the time. What have we done
over the past 12 months to address that? First off is a Google
Play gift card. It actually only launched
in July of last year. And since then, it's– woo, that's right. BOB MEESE: Right. Somebody's happy.

launched in July of last year. And since then, it's become
incredibly successful for us. And it's omnipresent in
US retail locations. It's in the UK now. You will see us continue
to invest in the Google Play gift card. The whole prepaid form of
payment is critical to us. The other aspect is we
launch campaigns. And what campaigns are
essentially– in this case, if you bought a Galaxy S III, you
get a free Galaxy S III– which is awesome– but also you got $50 to
spend on Google Play. And what this does is, one, it
injects money that gets spent on your applications.

And two, it lowers a hurdle for
users to go from a free app buyer– consumer– to actually a purchaser. And our experiments have shown
that when a user makes one, two, three purchases, they're
much more likely to make their fourth and fifth even when
their credit is over. Finally, carrier billing. And the exciting number I want
to share with you today is that 50% of Google Play
thirty-day actives are now on carrier support carrier
billing. And what that means is that they
are one button-click away from becoming buyers. They don't have to
type numbers, and no expiration dates.

You just have to enable
it, and then they can start buying. And this is a really critical
number for us. And as a background, if you're
not aware of what carrier billing is, it's essentially
the ability to put your purchases on your
monthly bill. And this is something that's
unique to Google Play, and that we've invested a lot in
the technology behind it. So the other thing you said
is the purchase flow. We've heard a lot about our
purchase flow in the past. I don't know if you've been
through the new store, as well as the new purchase flow, but
that's a really exciting development for us. And a lot of the design came in
from feedback you gave us, which was that you want the
purchase flow to be contextual. You want it to be fast, and
you want it to be simple. So we did just that. And in addition to that, we
made it a lot faster. So in this particular client
release that came out a few weeks ago, we've seen a
35% drop in latency. In addition to that, we're
seeing really good user feedback, and we're seeing a
pickup in conversion, as well.

Now let's shift gears
to costs. We've heard a lot
from you around accounting and back office. And if you're a small developer,
you might not worry too much about this. But for our large partners,
there's a big problem. You couldn't get your reports
on a timely basis. You couldn't get them programatically out of our database. And so, we've done just that. So with the rollout of the
Google Wallet Merchant Center now– which is, if you don't
have it, you should get it in a few weeks– you'll be able to use a very
simple script to download all your monthly reports, and
injects them into your backend, and do whatever
you want with them– most likely reconcile.

The other aspect is
support costs. And the thing about support
costs is that if you look at the top level cost of lost
purchases, you might feel that, well, it's bad, but
it's not terrible. But the impact of support
goes well beyond that. One is there is the cost of the
lost sale, and there's a fixed cost of supporting
that call, right? So if somebody calls 10 minutes
to support that user, that's a lot of money. But the worst part is you've
acquired that buyer with a certain lifetime value
assumption, right? And what this does to it is
it truncates its lifetime. It cuts it short. And so your math– as you're looking at, is
this going to make it– does this add up for me, it
really gets messed up. And so support, as little as
you might not pay a lot of attention to it, is actually
critical to your revenue and sales– to your costs
and sales. And what's the exciting
metric here is IAB v3. IAB v3 launched in December. And since then, Gamevil has seen
a 90% drop in customer contact rates for games where
they have implemented IAB v3.

So there was a talk on
Wednesday about it. Please go watch it on YouTube. And thank that person over there
for designing IAB v3. So anyways. Basically, this is
really awesome. You just need to do it. So in-app order status
API– this is another big ask from you– which is essentially the ability
for you to take that purchase token that we send you
back, and turn around and verify the status of
that purchase. This is for two reasons. You could do it for either very
fine authenticity of the purchase, or just the state. And we're launching this in
a few weeks worldwide. So all of our developers will
have access to this. And it should help a lot with
reconciling your purchases, and even preventing fraud. The other thing is in-app
billing testing. You've probably heard this
already, but we're now simplifying in-app billing
testing by allowing your licensed test accounts– the one
you already configured in the Google Play Developer
Console– to actually make purchases
without being charged.

Everything else is the same. Just no more holds, no
bins, no delays. Just the same, but none
of the bad stuff. And we think this is going to
be super excited, super helpful in streamlining your
experience in testing, and making sure you're not
wasting time stuck in those sorts of things. When you see that message that
says, this is a test purchase, you know that you're not
actually being charged as it says in the remainder
of the sentence. All right, so to summarize. So for your sales, we've got
50% of our users now on carrier billing. We've got the Google
Play gift cards. We've got promo campaigns.

And we've got a faster,
better purchase flow. For your costs, we've
got a programmatic access to your reports. Easy in-app testing. Better user experience
with IAB v3. And order status check API to
prevent fraud, as well as reconcile your purchases. So this is the summary list of
things that we've done, or we are doing in the next few weeks
to help you maximize your income. So looking forward a little
bit, you can see us invest more heavily in Google
Play gift card.

We are going to push it into
our biggest markets, and you'll see us continue
to do that. The next thing we'll do
is carrier billing. It's in 12 countries today. See us push that further over
the next few months, and over the next 12 months. All right, those add up. And then the purchase
experience, right? So we've already made a huge improvement in our last release. But we're actually going
to go even further. The one thing we've done so
far– the one thing we've done really critical is that we've
instrumented the purchase flow so that we can analyze it and
study it, and continue to improve it very quickly. So look for us to do a lot more
experimentation and lots more fine-tuning. So when you send us a buyer–
when you get a user to commit to making a purchase
on your app– we want to convert as many of
those as possible, unless they change their mind.

And so, look for us to do
a lot more of that. And look for us to support
more forms of payment. Gift cards are just
the beginning. And finally, seller support
in more countries. We're all– one of your objectives
and missions of all of us is that anyone– anyone around the world– can make a living
on Google Play. And we want to get there. It's taking a long time. It's slower than we would
like it to be, as well. But we do want to get to the
point where anyone around the planet can code an awesome
app, and make a living out of it. And we'll get there. So why is it an exciting
year ahead? I think it's a convergence of
the few things for us on Play. First of all, we've got a
global payment switch. We're really getting
to the point where we've got [? fops ?] in many, many countries, and
that's going to really help with our conversion.

The next thing is that we're
seeing a higher buying engagement, as you've seen
in the number before. Across the board, whether it's
in-app, subscriptions, or paid apps, users are willing to buy,
and willing to pay for the experiences you're
creating. And that's really good
news for us. Finally, we are really putting
the final pieces together for world class commerce
infrastructure and developer tools. We want to get you back to doing
the things that you do well and do best, which is
building awesome applications. We're going to take you away
from spending time trying to figure out why your account is
blocked for testing purposes, or why you have to download
these reports in some way or the other. We want to do all of that, and
make sure you do what you do best, which is build awesome

That's all from me. I'm going to hand it over to
Bob, who is going to cover a few case studies. BOB MEESE: All right. Thanks, Brahim. And hello, everyone. So to get the growth rates
that we're seeing, we're clearly doing a lot to help
support that growth. But much of the work is also
being done by our developers. And so this section of
presentation will really focus on the work of those
great developers. And we're focusing specifically
on the most commercially successful
developers. And by commercially successful,
I mean the developers that are not just
building great products that their users love, that are
being installed in large numbers in many cases, but these
are the developers that are making money
on Google Play. And I'll focus on two key
parts in this section.

So one will just be to help you
understand more about what these developers are doing. And then I'd also really like to
focus on how you can apply some of these lessons to
your own businesses. So as Brahim said, we've seen a
7x increase in the last year in in-app revenue. Signs of in-app revenue growth
are all over the Play Store. If you look at the top grossing
apps right now, all of the top grossing apps
are free to play. But with every rule there's
always an exception. And so we have a fun give
we like to play called Where's Minecraft. And so there it is, down
there at number 22. And so we are not saying you
need to push everything for free to play. Minecraft is an amazing game. It's an iconic brand with
a very loyal following.

We think it'll continue
to be successful. So we are not asking you to
follow the crowd to do that. However, also recognize
the dominant trend towards free to play. It's very important to recognize
that the bar for success for a paid title
in the top grossing charts is very high. More than anything, the trend
that we see is developers allowing users to defer
that payment decision. We see a three-step funnel
to monetization. So the first step is really
around acquisition. And so this is about expanding
this top of the funnel as wide as you possibly can, getting as
many users you can to press that install button. The install counts on Google
Play are public within a certain band. And just go check out some of
your favorite paid apps and free apps, and check out the
large, large difference in the large number of free installs
that happen on Google Play.

Second, retention– we think this is really an under-appreciated part of the funnel. It's part of the omotenashi
that Brahim was mentioning earlier. It's an area where our smartest
developers are spending more and more
of their time. And the thing we need to focus
on here is really on earning the ability to ask those
users for money. It's not something that you
can take for granted. For example, if I asked all of
you to rate my talk a couple minutes to it right now, you
might ask for a little more time to see like, hey, what's
this guy actually going to talk about, right? And the same sort of principle
applies here.

So have your users get into your
product, provide value to them, have them coming
back over time. And clearly, we've seen signs
that users are more likely to pay after they've had
an experience. And then finally, obviously
pressing that Buy button and monetization. And what we've found is, it's
very important, and there's a lot of differences in terms of
when and how developers ask users to pay. And I'll do a first case study
that introduces these three principles. So Kiwi is an Android-focused developer led by Omar Siddiqui. Omar's actually to be joining
us for the office hours session afterwards. And "Shipwrecked" has been their
most successful game on Google Play. It will also be the subject
of the case study in the following slides. Kiwi has three other games
on Google Play, including "Monsterama Park," "Brightwood
Adventures," and "Monsterama Planet," which was recently
released. And when we spoke with them,
they said for acquisition, really invest in your
Play store page.

It sounds basic, but the
little things matter. You See here in the description,
"Millions of players agree that "Shipwrecked: Lost Island,"
an Editor's Choice app, is one of the top free
games on Android." In just a few words, they communicate a
lot of powerful principles. It's one of the first
experiences that a user has with your application, and these
words really create a powerful impression.

Also on the right,
you see videos. We found that videos is a very
powerful way to communicate the value of your product, and
it helps differentiate you against all of the other
products that do not have videos in their titles. Second, retention, as we said,
is very important. Here when you think of
retention, think about rewarding those user actions
that you want your users to take. So on here on the left, as you
see that, it's very important to have daily retention. And you see your award, a
daily login bonus, that rewards those players for taking
the actions you want them to take.

On the right, you see
a leveling up. You see the time and the effort
that your users are spending on that application,
being rewarded through new content and new features
being unlocked, and other rewards happening. Further on retention– keeping the content fresh, and
unlocking big, new content. In this case, a full
new island– Atlantis, in this case– allows your users to stay
engaged with the game– or, the application– and explore all of
this new content. Also, you can even think about
reinventing the user experience. When "Shipwrecked" first
launched, it was really focused around exploration
and collection. After launch, they added a
trading mechanic, which users actually loved. It was a bit of a risk, but
users love this, and they keep coming back to the game
over and over.

On the topic of monetization,
we have found that merchandising really matters. I think this monkey's
great here. He's pointing out this
"arr-some" deal, if you can't see the little text there. But 24 gold for $2.99– who can beat that? You see below you can go to the
full store, but why not pull out one of the most
attractive offers, and put it right there and make it
easy for users to buy. And so, as you saw with Kiwi,
acquisition is about improving your Play Store page. Retention is about rewarding
the user behaviors that you want to promote, and about
reinventing the user experience. And monetization and
merchandising matters. But it's not just enough to
go linearly through this. What we're seeing the most
successful developers on Google Play do is they create
a virtuous cycle by feeding back the acquisition several
different ways. So those developers that are
able to find success and make money on Google Play can
reinvest those earnings through paid user acquisition
to fuel future growth of their products.

Similarly, those developers that
have a great number of retained users can cross-promote
those users– especially the developers that
have multiple titles– back into acquisition. Then finally, those developers
that are fortunate enough to reach the top list. That becomes a self-fulfilling
cycle. You need a lot of installs to
get there, but you get a lot of installs from being there. And now I'll talk about some
of these concepts with the other case studies. The second one we'll introduce
today's DeNA, and the game we'll mostly focus on is their
successful game, "Blood Brothers." They have a couple of
other hit titles, including "Marvel War of Heroes," and
"Rage of Bahamut," which was a clear breakout hit
through 2012.

DeNA also has six other games
in the top 100 top grossing. So because they have so many
successful titles, they really focus on cross-promotion. In this case, I was playing
"Blood Brothers" on the left. While I was playing, I received
this promotion– "Play Marvel, and receive 50
MobaCoin." It's a way for them to target a very attractive
user base– the user's who are playing their
existing games, and use them to acquire them for the new
games they're launching. It's also important for
attention to provide very clear objectives. The essential objective in the
game, "Blood Brothers," is a card collection mechanic. It's all around strengthening
your characters, which they call Familiars. All of the core game
loops in the game support this core objective. It's a very powerful thing. They focus you on a single core
objective, and then you have a game loop of adventuring,
battling, leveling up your characters– all feeling back into that one
objective of strengthening your characters.

Even as you add more complexity
to the game, when you battle and you win, you
capture a character. There's a variety of ways you
can combine these characters all back towards that central
objective of strengthening your characters. And one thing that's
particularly worth calling out is DeNA's success with events. So events are variations on
the standard gameplay that happen for a very limited
amount of time– a fixed duration– that provide important
rewards. And in this case, they provide
rare characters, which are extremely valuable within
the context of the game. Again, feeding back to
strengthening your characters. But the importance here is
creating that sense of urgency through having a limited time
window and providing something that is very valuable. And that combination
is very powerful. And you say, how
powerful is it? The monetization in that game
actually doubles on an average revenue-per-user basis
during these events. So there's a clear payoff to
finding the ways to make your game work for users, to create
that sense of urgency, to give the players that great
experience, to provide a slightly different gaming
experience, to give them a different way to interact
with other users.

And clearly, there's a financial
reward for doing this within the game. The next one I'll talk about
is Kabam, another very successful developer that has
moved just last year from the web over to mobile. So in Kabam's case, we're going
to focus their case study on "Kingdoms of Camelot:
Battle for the North." They also have several other
successful titles on Google Play, including "The Hobbit,"
"Arcane Empires," and the soon to be released "Fast
and Furious 6." One of the lessons from Kabam
was always be testing. Kabam focuses on core
gaming users. Core gaming users monetize
much better than your average user. And as a result of being able to
earn that revenue, they're able to reinvest those earnings
back into paid user acquisition. In this case here, they're doing
a split-test on several different campaigns. On the campaign on the left, you
can see a campaign focused around characters and concept.

On the campaign on the right,
you can see a campaign much more focused around a realistic depiction of gameplay. Kabam is always testing, and
so based on the relative success of each of these
campaigns, they can add more resources to one, take them away
from another, and be very flexible in growing their
overall user base. In terms of retention, as I
mentioned, Kabam recently came from web over to mobile, and
they quickly realized the difference in those users. The mobile sessions were
much more frequent. There were many more sessions
through the course of the day, but they were also shorter. And so, one of the first things
they did was change the way that they did the
content refreshes to make them more frequent. You can also see visually
depicted here on the left, that's the web game. And there's a very rich landscape of gameplay elements. Many of the major elements
are spread further apart.

It's really designed to be
played with a mouse and keyboard obviously. And on the right, you have a
much more streamlined game experience on mobile. Many of the user actions are
able to be taken right from your thumb in a very easy way. Now monetization– Kabam really focuses on
providing visual consistency. As I said, it's really important
how you ask your users for payment. And their case, they want to
minimize any confusion, and so here through all three screens,
you can see the exact identical presentation
throughout. The final case study today
will be on Pandora. Pandora's a company that's
extremely well known. It hardly needs an
introduction. They're the leading internet
radio service.

Kabam is one of those lucky few
apps that has reached the top of the lists, and
so from there– it's hard to get there. But when you do, it's
quite powerful. But what I really want to focus
on with Pandora is a recent change that they've
made around monetization. And so as Brahim alluded to
earlier, as you can see in the chart here, something
changed in February. And what was that change? So the thing that changed
in February is Pandora implemented our in-app billing
subscriptions. Previously before that time,
while the revenue was in, payments were much flatter, you
had to go actually from your mobile device over to
Pandora on the web and sign up for a subscription there
to be able to use the subscriptions on mobile. By reducing all that payment
friction, by allowing the user to purchase directly from the
mobile device, they saw a big bump in overall payments.

But it doesn't stop there. It gets even better
the next month. Because what happened here? So at this time, Pandora still
allowed users 40 free hours of mobile listening per month. But for those users who reached
those 40 free hours and still wanted more, Pandora
asked them to pay. And that's what really
allows this. And omotenashi is the theme. It's funny, that mix of– you have users. You're providing a great
value to users. For free, you're providing
40 free hours of mobile listening per month.

But yet there's so many users
who want to help you build your business. They love the product so
much that they're happy to pay at that time. So in summary, when you're
thinking about acquisition, think about improving your Play
Store page, and investing in your Play Store page. Consider cross-promotion,
especially with multiple different applications. For those applications that
are making money, reinvest those earnings for paid
user acquisition. And of course, everybody
wants to get at the top of the charts. For retention, really think
about rewarding the user actions that you're trying
to promote, and consider reinventing your user
experience. It's really important to provide
clear objectives to users, and to support those
objectives with the overall user experience. Design for mobile– it's important, and
users will notice. And on to monetization. The way that you merchandize
within your products on mobile matters. If you change new gameplay
mechanics, users will notice, and you can drive
huge success. Present a consistent
visual experience. And finally, there's developers
that have charts like this, and we're looking
forward to even more of these in the coming year.

And so that concludes the
prepared part for our talk. As we mentioned, following this
talk we'll be taking Q&A in the office hour areas. But I'd also like to point
out a few other– IBRAHIM ELBOUCHIKHI: We have
time, we'll do questions. BOB MEESE: Yeah, we can do a few
now, but we would like to specifically point out a few
that we thought were particularly noteworthy, and
valuable for your time. And then most importantly, we'd
like to say thank you.

We'd like to thank all of
you for your time today. We'd like to thank some
of the developers who were part of this. I see Kabam here in
the front row. Thank you, guys, very much. And then thank you to all of the
developers on Google Play. It's been an amazing past
year, but the future, I believe, is even better. AUDIENCE: I have one
quick question. Can I ask now? [APPLAUSE] You said something about the
carrier billing apart from the gift card. What is the carrier billing? IBRAHIM ELBOUCHIKHI: So carrier
billing is basically the ability for the user to put
their purchases on their monthly bill. So the same bill you get from
your provider, you would just put all your purchases
on that bill. And so, it just adds
up to that. AUDIENCE: Oh, so you're ordering
international calling or something, is it used
for that, or what? IBRAHIM ELBOUCHIKHI: It's just
for buying in-app products.

So when you're, let's say,
playing a game, or you're even subscribing to Pandora, you
can put your Pandora subscription on your
monthly phone bill. AUDIENCE: Oh, that bill. AUDIENCE: Hello. I'm having a little bit of time
just judging business models, and evaluating business
models when I'm thinking about developing
apps. Like for example, you're talking
about 7x improvements, 5x improvements, 2x
improvements, and all that sounds great but 0 times
5 is still 0.

So the question is, what does
it mean to be in the hundred top grossing apps? Is there any charts of like
revenue, actual dollars per month, if you are a certain
percentile of your app in that top grossing list? I'm having a really hard
time finding useful data in that direction. IBRAHIM ELBOUCHIKHI: So I would
say that's probably like partner data. Like we generally can't share
information like that about how much revenue our
people make in our different rankings.

It varies a lot depending
on what type of application is up there. Clearly, if you're– if you have a $9.99 a month
subscription, and you're on the top grossing, that gets
you up there faster. And it just– it varies a lot, so it's kind of
hard for us to give a firm number there. AUDIENCE: Even if it's a
completely anonymous statistics, like if your app
is in the top 2%, you can expect, I don't know,
$3,000 a month? BOB MEESE: You want more
of just what is the data behind it? AUDIENCE: Yeah, just very
rough guidelines. Can I expect to make $30 a
month? $3,000 a month? $300,000 a month, if I
have a top 2% app? It's just really hard to
get a feeling for this.

BOB MEESE: Sure. I mean if you're interested
enough, there's data that's out there. A number of the developers are
publicly traded, and so there you can get a sense of what
their revenues are. As Brahim said, it's challenging
for us to share our partners' data. We all have confidentiality
agreements. We've tried as much as
possible through this presentation to be as open, and
over time we become more and more open. But if you want to talk
more, we can find you at Office Hours.

AUDIENCE: OK, thanks. AUDIENCE: Hey. Now with the version three of
that in-app billing, how soon can we expect to be able
to do multiple purchases of a single item? For instance, purchase 200
tokens for $200, and have Google Play handle the
maintenance of that? IBRAHIM ELBOUCHIKHI: So that's
versus configuring one SKU that equals 200 tokens? It's not on the immediate
roadmap, but it's something we've talked about
in the past. So I'll take that back to the
team, and see if we can prioritize it. And the use case, is it just
a maintenance issue, or–? AUDIENCE: Well, I mean, I can do
it right now, but I'll have to build my own server
infrastructure to manage the consumption of those
200 tokens. So what I'd really like to do
is I'll allow the user to purchase 200 tokens. And then as they use them in
game, I just tell Google Play, you know, consumer on token,
consumer on token.

IBRAHIM ELBOUCHIKHI: OK. Yeah. That makes sense. AUDIENCE: Hi. Do you have any tip
on what's better? Do a [? light ?] in the
[? pro app ?], or do a [? light ?] app with
an in-app purchase? IBRAHIM ELBOUCHIKHI:
I'm sorry. I didn't get that. BOB MEESE: You're saying whether
you should do two different applications, or
whether you do a free app with in-app purchase? One area we found is whenever
developers have two different apps, it creates a
lot of overhead. So some of the general guidance
is simplifying– finding one application
to invest all your resources behind. Otherwise, it can lead
to confusion. So the general best practice is
to invest in a single app, especially for small
developers. IBRAHIM ELBOUCHIKHI: And the
upgrade experience is not as nice, right? Because you have to get them to
go install a different app and buy another app,
versus just in-app purchase and you upgrade. You unlock new content
immediately in the app.

wondering if you are considering doing promo
codes for paid apps? And are you also considering
affiliate programs? IBRAHIM ELBOUCHIKHI: Yeah, those
are things that we've looked into, as well. We've launched the promotional
campaigns in terms of promo codes for money. So you can actually get $50, as
I mentioned, in the earlier Galaxy S III campaign. Or we're looking as well into
being able to allow developers to issue promo codes, and have
them redeemed by whatever it is– the press, or reviewers,
on whoever it is. Yes. AUDIENCE: And what about
the affiliate programs? Are you going to launch
that soon? IBRAHIM ELBOUCHIKHI: I don't
think it will launch soon. But there's differently talk
about them, especially in the content side of Google Play. But I will definitely take
that back to the team. AUDIENCE: All right Thanks. AUDIENCE: How are you defining
what is a top app? Is it the top sales that day,
that week, that month? And are you also doing any
editorializing around that where you're just putting
in things that you like? BOB MEESE: No, no. All of the top list are straight
algorithmic in there.

It's revenue transacted through
Google Play, and it's generally over a week
time frame. AUDIENCE: One week time frame? BOB MEESE: Yeah. AUDIENCE: The same thing across
[? pre-paid ?] apps, or free apps, paid apps,
et cetera? IBRAHIM ELBOUCHIKHI: There was
talk earlier about Discovery that Ankit Jain gave. It's one of those we've
highlighted. And that was actually
all about that– all about discovery,
and top lists, and those sorts of things. AUDIENCE: You had an example
about the kind of creative that works well in the Play
Store, and what your listing should contain.

Do you have similar recipes or
insights about how to do paid user acquisition, which you
also briefly mentioned? What works in paid
user acquisition? BOB MEESE: We observe it. We don't make recommendations. There's a part of Google's
business which is fully separate from us, with the
ads business, which focuses more on that. For us, the conversation today
was more around observing it more so than recommending. But there's plenty of other
smart people– either other developers that are out there
that are doing it, or the vendors themselves– who
I'm sure would be happy to educate you. AUDIENCE: If I have a paid
application with low download numbers, one way I could boost
those is to offer it free for a period of time, say a week
or a month, or even a day? Is that still not possible,
Converting a free app to a paid app? AUDIENCE: Other way.

I have a paid app now. I want to make it free
for a day or a week. IBRAHIM ELBOUCHIKHI: And
then bring it back? We'll have to take that back to
the Developer Console team. That's more of a kind of, how
do we manage the SKUs, and what types of SKUs are out
there, like each product and catagorization. But I'll take that
back to the team. BOB MEESE: And I think
that's it.

Our time is up. So we really appreciated your
questions. please follow up with us right now. IBRAHIM ELBOUCHIKHI:
Yeah, office hours. Thanks.

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