Looking for Alternatives - Duncan Blackett, Digital Turbine.

[Music] [Applause] [Music] so uh we're now on to our next talk we've got stunk and blacket from digital turbine uh on a talk which is looking for Alternatives why developers lean into alternative distribution channels to reach their game's full potential uh so if Duncan uh yeah we we can start yeah we're on time great St um thanks for joining uh this morning guys um so looking for Alternatives uh why alternative distribution is the key to reaching your game's full potential apologies it's a bit of a boring title what it should actually read is the app economy is broken

but there are solutions out there growing growing Solutions as well so hopefully we' got a room Pack full of UA marketers uh guys do you work in a UA distribution here good quick sh of hands fantastic we've got at least one person so so this is great um let me just pick up the clicker I think that would probably help wouldn't it so is it this one or that one don't that ought to do um my name is Duncan uh I'm the head of Sals for digital turbine for the mayor region but don't worry I'm not going to be selling you anything today this presentation should probably take around about 15 minutes and of course there will be an opportunity for you to ask questions at the end um I always like to frame uh these discussions with some key themes and there are three of those um the first one is that the macro is down you know advertising is down by around about 30% year on year but the good news is that advertising in a recessionary environment is always the first thing to come back and there will be lots of opportunities out out there by the end

of 2023 the games Market globally is going to be worth $290 billion so what that suggests is that there's plenty of opportunity theme number two the app economy is evolving a user behavior is changing B first party data is going to be really important to all campaigns moving forward and C new app install methods are emerging But ultimately there's a new paradigm here in the world of app distribution and that Paradigm is alternative distribution otherwise known as direct to device so look we're all here it's very evident what's happened in the marketplace it's never been harder to make money from your users 2022 compared to 2021 R is down by over a third and that's significant and why is that two main things user behavior is changing players

are less sticky not not in games for long enough but also because of the macro because of the challenges out there people are spending less money in games UA marketers are finding that they're being squeezed and of course that materially affects bottom lines so you need to be on top of all the changes that are taking place in the industry to make sure you're maximizing your game's full potential but it's never easy is it everywhere you turn you're confronted with a new issue and one of the biggest issues right now in the marketplace is clearly the depreciation of third party IDs and this creates lots of headaches for UA marketers because it's harder and harder to find the right channels to use and to be as effective of your UA campaigns as they previously once were to call out a few of of the the Marky events that happened in the in the deterioration of third party app identifiers it started with gdpr then had CCPA Google's privacy samp box initiative at everywhere we turn we're

confronted with new issues but iOS scan 4 is helping to address some of these issues but it's still in progress you know we're waiting we're waiting for ad networks and we're waiting for mmps to catch up Android it's going to get tougher get GS they're going away but there is a solution for you but what we have to start doing is getting clever and ultimately thinking outside the box is as if this this was pre-prepared but we talk about thinking outside the box digital Turbin's internal research to our customer base shows that in fact EUR marketers aren't thinking outside the box actually what they plan to do for this year's investment is continue to invest in their traditional channels despite all the hurdles that confront them and the problem this creates is a depth but also a massive opportunity in the marketplace there is a growing Trend here and what we tend to find in advertising is that media dollars follow

eyeballs and where are those eyeballs I'm looking right now at some of you your eyeballs are on your device and that gives you a massive opportunity on the left hand side here your right what you see is us digital spend a US digital spend across all digital that by 2027 is forecast to reach $400 billion do a massive Market indeed but if you look carefully it's a market that's not growing exponentially it's gradual but there's a clear distribution change in where those ad dollars are being spent and the clever marketers out there are spending those ad dollars on App Stores indeed despite all the opportunities that are out there app stores do remain one of the most important vehicles for app Discovery but what app stores are uh being spent on and what app stores are users increasingly finding and this is

where the conversation becomes a little bit more interesting so indeed why does alternative distribution matter well the short answer is alternative distribution matters because it's a massive massive growth industry if I told you that Apple and Google combined only represent 49% of all app installs I think some of you might be quite surprised some of you might also be surprised to learn that in 2021 60% of all Google play downloads from App developers actually derived from thirdparty App Stores and it gets even more interesting when you start to look at the revenues generated within thirdparty app stores in 2021 alone $36 billion was spent in alternative third party Android app stores in Google the figur is only $42 billion massively high but look how big

that Alternative Market is so why are game developers and Savvy marketers turn into alternative app stores there's a few reasons probably the most important let's face it is economic game developers can find more favorable Revenue shared deals outside of the duopoly but also if we look inside of you know Apple App Store or or Google Play we find quite a cluttered uncurated ated environment it's a very poor user experience to find in your games and also for the user they're not getting much value from those traditional stores so of course this is why we're seeing this growth but direct distribution isn't actually anything new in 2011 we saw Amazon first you know create some competition in the market by launching the Amazon app store however Google continued its massive growth and they reached the a milestone in 2017 with 3 million apps

housed with inside the Google Play Store so imagine you're an indie imagine you're just starting out imagine you've got a killer game and you put your title in in the Google Play Store and you don't have much marketing budget behind it you are competing against 3 million other apps and that's a bit of an issue and an actual fact compounding on top of these issues of just Discovery alone is the economics that Google Play and Apple has been charging and this is why we saw in 2020 epic take a different path and started taking law action against the incumbents a trend that started a bit of a snowball that's now grown into a larger larger Snowball Effect because in 2022 we saw the US Congress introduced the I have to read it out open app market act which is um creating lots of legislative Tailwinds in favor of uh direct attribution and just two things come to mind very very quickly while I was having breakfast this morning this came as news to me 30 states in the US

last week and I again this is news I picked up this morning uh won a class action against Google for its unfair charges to users and also going through Congress right now is Google has been identified with unfair practices when it comes to um its search engine operation so the market is clearly recognizing that everything is loaded against us right now and we have to go go out there and look for these alternatives exist within the marketplace this here is a game store and it's a game store that's designed empowered by digital turbine and this game store sits on Android devices in the US right now and his game store is live on Verizon us Sola Cricut and track phone 10 million devices as I speak and it will be on a 100 million devices by the end of 2023 a massive

Market but carrier app stores are not new Carri app stores have existed since the Advent of of the mobile phone I'm quite old I remember you know downloading ringtones or Java based games remember those from from my Nokia 3210 or or whatever it was but then Google and apple stole a bit of a march on the market and now the carriers want this Market back and it's not just the carriers in 2023 meta also launched direct distribution to its Market base in AA so this isn't just a growing Trend it's a trend that's here right now the reason why carrier based app stores are grining popularity is because of this regulatory environment it's because first party data moves but it's also being enabled by on device technology now digital Tbone works very closely with carriers across the globe and also oems placing our ignite

technology on the firmware of our carrier partner devices but also our OEM partner devices so people like Samsung people like xiaomi people like ZTE just to mention a few but where things get really interesting is what clever things we can do inside our app store called games Hub we've got two routes to Market developers can run with conventional Google uh APK and that's great and we can serve you in you know fantastic um placements inside our games Hub within trending or you know what's hot now or or promotional features but where things get really really clever is if we start to work with custom apks know integrate with uh appcoins wallet for example and then we can start talking about alternative billing and that's where more favorable Revenue terms can be found so improving the economics for a the developer and B the most important

people not in the room right now the end user the people that Fu this this fantastic you know economy this game economy that we work in what's also interesting to note is that Google does see digital turbine as an ecosystem enabler and we work in conjunction with one another to start slowly opening up the space so all of our ux all of our UI it's fully Google compliant and it's a seamless user experience there are also many other opportunities that are available on device as part of alternative distribution but I just want to bring it back just slightly what makes alternative distribution and app Discovery so compelling for UA marketers is the fact that people are generally quite app Gnostic right now most of the time when people open up their their mobile device they don't actually have a destination app in mind you know they know it's the front and center of their lives be it for for working emails whether it be you know socially where

you're scrolling an Instagram feed or or or a Tik Tok feed for example but because you can Target users let's just call it at least 50 times a day but probably more through app Discovery it gives youa marketers a fantastic opportunity here we go digital turbines technology is on device it's on a billion devices globally and this is very very important because it fuels a lot of our UA Solutions and a lot of our alternative distribution our technolog is very clever it does a couple of primary purposes that I really want to call out that are are really sacran to the UA industry particularly amongst all of these changes that we're seeing number one we drive frictionless installes what do I mean by that well when we place an app onto a digital turbine powered device remember there's a million of those in the market market and growing every day when user clicks on that app

it's the full APK file of the app that opens so for example if Angry Birds 2 have to mention these guys because obviously we're we're in Helsinki right now it's the full a APK file that opens up these go straight into the game and experience but also because our Tech is on device it's completely fraud free so we don't suffer from you know click injection and and fraud of that nature it's completely closed environment but in this privacy Centric world what really sets us apart is the fact that because our technology is on device we can still pass back thirdparty unique identifiers and be completely compliant with the data privacy regulatory laws so it's very interesting thing and something to note um and what makes us really significant in the marketplace is how engaged our users are you know like big Mass distribution channels out there you know Facebook and Tik Tok for example first of all we built an audience and we did that through our device footprint a billion devices globally we then had to engage the audience and we do that through our

content Discovery ST uh tools on the minus one screen so things like News sport and weather and then we have to monetize that audience and we do that through our unique UA Solutions I was going to talk to you now about two of our UA Solutions the first one being Dynamic installs now this is the key driver of scale and distribution globally for digital turbine quick fact every day in the US 75,000 new Android devices are activated that have our technology on so that means we've got massive opportunity to find new users who can't aren't currently playing with your games great example would be somebody like King and Candy Crush so Candy Crush are one of our biggest clients despite the ubiquity of candy crush candy crush is still being a very valued partner of digital turbine for the past 5 years and one of our largest clients still preloading on newly activated devices every day not just in the US but globally so what does this tell you youa

marketers it tells you that your existing channels while great and while effective are still not hitting as many users and the potential that you could be there's a massive Market out there in alternative distribution that currently isn't being exploited and then also we have another product that we call app select app select is an app recommendation tool and it fires at the first boot of a device and the reason why this is so important is that users can choose which apps they want to have on their device if they want to install Amazon they can if they want to install Cy Crush they can and what's particularly relevant here and I'm going to give you a a quick story if you'll allow so my mom uh she's 74 she can't work the TV but last week she told me that she was up to level 300 on Candy Crush and the reason she was up to 300 from Candy Crush is because she recently bought a Samsung device on the O2 network in the UK and she chose to install Candy Crush not because she knew

much about it but because she knew that's what I that's what her little boy does I'm 43 years old not that little anymore so as a result King acquired a new user and that's an example of 74 year- old who's never been to the Google Play Store and downloaded an app by the way I told her how to put the TV on now so look thank you for listening just to surmise alternative distribution is big but it's going to get bigger and if if you guys don't take note of the other advantages that are out there you are going to get left behind so thank you very much for your time I appreciate it and if the floor has any questions um I'd invite you to put your hands up and and fire away uh sorry yeah thank you very much thank you thanks your time guys uh we got time I think we got time for some questions if you if you take some so come on let's warm you up we got any uh some tricky ones I have one all right well I I've got one

so I think uh I'm trying to remember the number for the revenue for alternative distribution stores was I think 36 billion okay 36 uh was a lot of that revenue from China or does a lot of that actually come from other regions uh as well didn't include the China figures um largely because we don't have access to that data um but it's a brilliant question because it allows me to actually show just just how vast that market is if you start to include the Chinese app stores as well remember that I mentioned that figure of 49% of installs are donated from Google and apple that figure does include China and that shows you just how massive that market is and one of the biggest markets for term distribution right now of course is China the most interesting thing about China is that you know not only the the Western companies find it very difficult to infiltrate in China to to maximize that market lots of Chinese developers want access to the the west and this is something that digital turbine is helping to facilitate for

them yeah interesting uh if we don't have any questions then yeah I think I think that's it so but if you do have uh any other questions you want to ask you know where I am uh you can pull him aside just outside here so uh yeah once again thank you very much Round of Applause thank you thank you [Applause] guys [Music]