Network effects of your mobile app portfolio (Part 1: intro)

Posted by on October 14, 2018 · 4 mins read

The underlying technology that allows web developers to quantify network value across their portfolio of web properties is different than what’s available within the mobile app ecosystem. As a result, mobile app developers who have multiple mobile properties take shortcuts and don’t track the value of network effects properly or at all. Mobile app developers need to think of their content as a portfolio so they can get more from their underlying network value.

Back in 2009, Farmville became one of the most popular social networking games on Facebook. It had immense network effects between its users. As more users played Farmville, the game became more engaging. Soon after, Zynga released a series of follow up games that utilized cookie tracking capabilities to build a network of Zynga users within its portfolio of games. Since each player stayed on the same web domain, tracking which games were played across the entire Zynga portfolio by any unique player yielded extraordinary predictability in game design. Zynga developers found that players loved similar aspects of gameplay across multiple games and built on top of this knowledge. Game developers built new games with high confidence that they could predictably manufacture hit games.

Answers to valuable business questions can provide extreme leverage to grow businesses. Questions that can help build off of network effects within a portfolio can look like:

  • How long does my user stay within my portfolio of apps? How do I keep them within my portfolio? How do they engage with different content in different properties?
  • How does the LTV of a user change as the path of the user changes between apps?
  • Can paid marketing be leveraged to understand the best path for promoting between different content?

Since web tracking technologies don’t apply directly on mobile platforms, mobile developers are faced with a problem that isn’t easily solvable. In fact, the difficulty of this task is so high, that app developers just don’t attempt it at all. And why would they? They need to build their mobile app.

Working with some of my customers at Tenjin exposed the value in quantifying portfolio network effects, especially for performance marketing teams. When I calculate this value for my customers today, it’s crazy to think no one is doing this. Imagine if you could say the below with 100% confidence:

“Even though the individual user’s ROI in App A was negative, our expected network effect value makes up for that so I will continue to buy at a loss.”

A common mobile marketer is trained to shut off any campaign that has negative ROI over a certain timeframe; but the information above enables a smart mobile marketer to make the opposite decision and continue to grow profitably.

I am not saying this to pose theory. In fact, I work with the top app developers in the world on these problems and I can confidently say there is a huge amount of quantifiable evidence this user acquisition strategy is viable for exponential AND profitable growth. Furthermore, if a mobile app developer owns many apps, the unique individual path a user takes through those apps can be optimized. Path A can yield more or less value than Path B.

In later posts I will to show you how to quantify this portfolio value.