Kids' Apps Economy | PANEL

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Good afternoon, my name is Eldad and Im the CRO and Co-founder of KIDOZ

In the next 15 minutes Ill briefly go over our view of the kids space today and will invite 4 industry expert for a panel around the app aconomy.


SDK For Apps

Content Discovery Network for Kids

Kid Mode For Devices

TinyLab TuToTOONS Bubadu AppQuiz

Casual Connect 2016

Few words about us to understand our prospective of the kids market:

We are a content discovery platform for kids - We help kids find good & relevant content

We have a kid mode solution we give to device makers and carriers, and an SDK we provide to app developers


Content Discovery Network for Kids

Kids Mode

Casual Connect 2016

SDK For Kids Apps

Our story is in interesting in itself:We started as an app and became a B2B platform as we realized that the bigger problem was not helping kids find content, it was helping content find kids, so we shifted the product towards developers.


Content Discovery Network for KidsOver 900 Apps

25 Million Users

Casual Connect 20162015 2016

And it worked. Our SDK is used by 900 apps reaching 25 million kids every month, and we are adding millions each month now. We have 20 people based in Israel.This presentation will share the insight we got from working, talking and questioner we did for this lecture.


Developing Apps for Kids

75%Want to help kids

25%See a Business opportunityCasual Connect 2016

And our first question to developers was why? What led them to develop apps for kids?

Most wanted to make the world better for kids and help them (inspired by their own kids)

Only a few developers started as a purely business decision. And, if they did, Im pretty sure they think differently today. 5

Discovery is Extremely Hard, Unless:You have a huge portfolio (to cross-promote)

Your apps are featured frequently

Will you feature my app?

Casual Connect 2016

The kids space has a few main challenges, the first being discovery:

Kids are not actively seeking apps on apps stores, they dont have the patience and skill Their parents are too busy as well to help, so discovery is super hard unless:You already have big portfolio of 20-30 apps that can boost you new app launch.You have fans in the Google & Apple stores6

Revenue Per User Is Lower Than Cost

~25 C

No economy ~$1.00Life Time ValueCost Of New Install

Casual Connect 2016

And if we thought discovery is hard, monetization is even harder.

The cost of acquiring users is way higher than the revenue you make from each one.The gap between the money you need to bring users and the money you make is preventing the space from becoming a sustainable economy This is the biggest problem of our space today And this is exactly what we (and some others are trying to solve )7

Marketing Effort & Budget

Casual Connect 2016

The challenges are reflected when developers are marketing their appsOnly 21% invest in UA, and their budgets are a few thousands dollars a month so as a general rule, UA is not a common practice in the space.

Most developers focus on store optimization and other free tactics


Asking Users to Pay (US Market, 2016)

#1 Premium But user base remain small

#2 In-App PurchasesBut raise complaints, higher regulation, no monetization from most users.

#3 SubscriptionBut requires heavy maintenance

Casual Connect 2016

So how do apps make money in our space?There are 2 main methodsAds - which will focus on, and asking your users to pay

Direct monetization is extremely hard:

#1 Premium: up front payment for apps is a popular revenue model, especially on iOS,but NOT having the try before you buy concept is keeping most apps with a very small user base, with only well-known brands succeeding in the premium category.

#2: In app purchases: kids buy within apps, the default solution mainly for Android. This raises concerns, for example how many parents send their kids to the mall with their credit cards?So without a handy payment method, a kid needs to beg for purchase, which he will do for an app he is extremely engaged with. Not a simple puzzle, he will play with for 10 minutes.

#3: Subscriptions: probably the best way to monetize today in terms of ARPUbut relevant only if you can maintain the ongoing effort of developing new content for the service.


But What About The Rest?

Paying Non

Casual Connect 2016Paying

So while asking for money may work, it leaves behind a huge potential of the NON paying users And definitely does not optimize potential revenues.


Kids Are Shifting From TV To MobileAnd Ad spend budget on kids is following

$4B Mobile Display & Video

$17B TV Ads

Casual Connect 2016

And what is the potential?As kids keep shifting from TV to mobile, the ad spend budget is following and the 17 Billion dollars spend on TV campaigns is slowly moving away from the traditional TV space


Attitude towards ads in apps for kidsNo ads Ok with adsOK with Safe Ads only 22% 37% 41%

Casual Connect 2016

So how do developers feels about ads?

Most of them are OK with ads, or are at least looking to run safe ads.

I believe that the more we see appropriate ads for kids, the higher the trust level from developers.

Developers want to see the process working for them and for kids. rest of the developers will feel better about them.12

So to conclude, lets run over some good, and bad practices of monetizing kids apps. 13

Bad: Being Non COPPA Bad: Being Non-COPPA Compliant

Corona Platform

Casual Connect 2016

The first bad thing you could do is do nothing or barry your head in the sand and declare you are not targeting kidsbecause when it comes to COPPA, if you are attractive to kids, you need to be compliant.

You may have heard about Inmoby - the ad network was fined recently for tracking kids location last monthAnd the FTC is more focused on the developers and publishers.

I think we will see more and more networks and platforms saying to developers, if you are monetizing kids, you cannot use the generic ad networks.And need to select a coppa compliant solution, which happens to be KIDOZ


Bad: Being Non Compliant in App Stores

iOS KidsParental gate is a must

Google Play (Family) No Game Walls

Casual Connect 2016

Each store came out with a long set of rulesobviously your content and ads need to be safe for kids. And if you think you are in full control, you are wrong. One of our partners enabled Admob, by Google, but was kicked out of Google Play because the AdMob ads were not appropriateFor iOS you need a parental gate (which is a killer if the kid is playing by himself and you promote installs)On Google Play you can only promote one item at a time, this is why Tom the cat and Outfit7 are not in the family category


Ugly: Being Inappropriate

Popular coloring appshowing inappropriate recommendations for kids

Casual Connect 2016

Last example what can I say, not exactly educational - and this is not a rare sight.

My kid asked me yesterday if I know I could meet women online because he was asked by Smashy Road to watch a ad.


Good: Being TransparentNick Jr. clearly marks ads within the feed.

Casual Connect 2016

For a better taste, lets finish with some good practices for promoting things to kidsFirst be clear and differentiate between ads and content

This is not just for the kids, it is for your brands credibility among parents and stores(young kids dont know how to read, and older kids know its an ad without reading).17

Good: Respect Kids

Non Intrusive

User Initiated Native & Content Focused

Casual Connect 2016

And lastly, respect kids with an elegant and non intrusive experience.We created a unit that kids open which allows them to explore more, and only then to see the promotionWe found that the ECPM is way higher and kids are coming back to the unit, instead of looking to close it the minute they see it.