Corona’s effects on the app industry: Win or Loss for the app industry? On the 17th of March, we organized a Facebook event for the Mobile Marketing Experts group, together with Tim Koschella from Kayzen, Cristina Constandache from Viber Rakuten, Erik Hegely from Pixel Federation, and our Founder Andre Kempe.
Table of Contents
The discussion was about Corona’s impact on the app business and how it is shaping the industry. Read the transcript of the entire Panel discussion below.
Corona’s effects on the app industry: Transcript
Andre Kempe
“Thanks for joining the stream. I think you can see our names, and who we are, and what we work for. Before we introduce ourselves, let’s maybe quickly say something about the situation itself. Obviously, we do not hope that anyone is impacted in the bad way with what’s going on. But I mean, you all know the news. I am located in Spain and we are locked down. Certainly, a terrible situation for many-many families. But the show must go on. We are still doing our App marketing in some way or at least some of us. That’s exactly what we want to talk about today. Who is still in and who is out? And what are the effects on the app industry itself. So, let’s maybe have a quick introduction round. Erik, do you want to start?”
Erik Hegeley
“Yeah, sure. Hey guys. First of all, thanks for having me. I am from Pixel Federation. I am head of growth marketing over there. Pixel Federation is a company based in Slovakia. We also are shut down over here, under quarantine, everybody is at home. We are developer of mobile games, probably the biggest titles, Seaport, Diggy’s Adventure or TrainStation 2. My day to day agenda at Pixel Federation for the past half year or so has been about around ASO (app store optimization). So, it’s moving towards new titles right now, and I’ve been in the industry for three years.
Andre Kempe
“What’s the typical data set that you look at on a day-to-day basis?”
Erik Hegeley
“I mean, I look across data. So, I look at the main KPIs like how we performed in terms of performance marketing spent against the projected revenue, yesterday’s revenue for the company engagement across the board. I mean my regular routine usually starts on Monday when I check on everything, so I make sure I have the task list set up for the whole week what things need to be looked at.”
Andre Kempe
“So everything growth related app marketing use acquisition.”
Erik Hegeley
“Yeah, pretty much.”
Andre Kempe
“Ok thanks, Tim?”
Tim Koschalla
“Yeah. Hey everyone. Thanks, Andre for having me here. My name is Tim. I’m the co-founder and CEO of Kayzen. I’ve been in the app industry for about eight years now. So, I’ve really seen growth from where it started back in 2012 till today and I co-founded Kayzen with two partners back at the end of 2018. What we do is to provide software for sophisticated buyers to buy programmatically in-house, so they can buy users, we target users across all of the different problematic enabled inventories out there.”
Andre Kempe
“And what is the typical data set you look at on a day-to-day basis?”
Tim Koschalla
“So we look at the ad requests that are available on the market. They are traded through about 25 in-app exchangers. We look at how much inventory is there, how much inventory in each country, how much inventory on each ad format, how much inventory coming from which apps, what are the top publishers and so forth. So yeah, that’s basically what we look at. And then also, obviously we monitor click-through rates and conversion rates. Our customers typically send in-app monetization events back to the system. So, we see that as well, but this will be less generalizable. I think because it’s more particular to each specific campaign and customer.”
Andre Kempe
“Okay, and yeah welcome Christina. Maybe you say a word about you.”
Cristina Constandache
“Thank you. So, I’m Cristina. I’m CRO at Viber. I’m in charge of all revenue that we are driving from monetization activities and not only. And I’ve been in the industry for eight years as well ever since apps showed up and we typically look at revenue but behind that of course you are going to have ECPMs and then you’re going to have other things like number of messages delivered, SMS and a lot of other things.”
Andre Kempe
“Okay, that’s super interesting actually because I can imagine that the messaging let’s say, usage should be growing in the current situation, isn’t it?”
Cristina Constandache
“It is. The messages are growing. The number of group messages are growing as well quite a lot and the number of calls are growing. So, we’ve seen activity even from countries that were not, say, that relevant for us or very big but we’ve seen the activity increased around five times.”
Andre Kempe
“Ok, five time! That is a lot. Is it something that we can say that’s easy to handle still like from a load perspective?”
Cristina Constandache
“In terms of platform capabilities this is not a problem because that’s what the platform was built to do and the founders of Viber built a product that can very easily function as a terrific service. So, it means that the capacity of messages and calls is not an issue.”
Andre Kempe
“Hmm. Ok. Erik, you work for a game publisher. So, all things related to people staying at home or being in an idle mode. But what is your current situation? Like do you see drastic increase or slow growth?”
Erik Hegeley
“Not really. I’ve been looking into the data ever since we announced this call, a bit more diligently and actually found out nothing that would stand out. If I didn’t know about the situation that if I didn’t read the news there is nothing that the data would suggest so far that’s been happening. I mean, obviously there are some changes in CPMs and CTRs and CPIs, all these acronyms that we use so much, but I wouldn’t attribute it to the changes in the situation in the world.”
Cristina Constandache
“Because of woman’s day last week, it’s sure that the data is little bit skewed because the women’s day was huge especially for us and especially in CIS, CEE and in Asia, so it’s true that we don’t see an impact from coronavirus so far. But we are seeing activity in Italy for example, it’s Italy that exploded because it’s also the first country that went on lockdown. And it is clearly linked to this story today seeing the most obvious pattern and now we are monitoring France to see how the revenue reacts.”
Andre Kempe
“So that indicates you are benefiting from the situation actually like more usage and more ad revenue probably. I don’t know.”
Cristina Constandache
“Yes, but I think it’s temporary.”
Andre Kempe
“Hopefully!”
Cristina Constandache
“No, all the benefit is temporary unfortunately, I think that ultimately this is going to be very negative for all of us.”
Andre Kempe
“Okay, Tim. Can you say a word about your business like you as a DSP, you certainly see two sides of things. Like maybe you can quickly explain for some folks here what a DSP does and how this works and what you actually can see from your business.”
Tim Koschalla
“Sure. Yeah. Yeah when we say we’re exactly a DSP but an in-house software but it’s sort of a DSP. So we receive ad requests from all the different inventories on the market like publishers, for example, like Viber as well through the ad exchanges that are integrated with and hence we would see the volume of traffic available to buy so if usage of apps goes up and aggregate, for example, if like people staying at home means that people are using apps much more and hence creating much more ad inventory. And this is a pattern we would be able to see on our systems for example, and we could drill down into this by country and different dimensions to find out if it’s actually coronavirus related or supposedly related.”
Andre Kempe
“Okay, do you actually have maybe even something to share data wise? Like do you have some exact numbers that you see or something? “
Tim Koschalla
“Yes, I was looking into patterns in Italy specifically and I did look into a couple of dating apps and then I looked into the number of game apps mostly casual game apps and I looked into data from the local soccer apps like apps that help you track the soccer league tables. So well, I have to say that the games similar to what Eric already said, I didn’t see any change that is significant enough to say that this is impacted by this. Yeah, that is rather significant enough. Neither did I see that on the dating apps. I did see a decline on the soccer apps, but since I’m not following soccer that closely, I’m not sure this is maybe seasonal related. I do know that in Italy the games were suspended. Already, I think two weeks ago or three weeks ago.”
Erik Hegeley
“Yes, it has also been in Spain and the UK so there might be some correlation.”
Tim Koschalla
“Yes. I think this is maybe one of the app categories where we can see an impact because people typically check these apps on a daily basis to see the scores of their teams and of the overall league table. So once the games are suspended, there is no reason to actually check in on scores and league tables. Yes, my assumption is it will be case-by-case really depending on the specific publishers whether there is an impact to be seen or not.”
Andre Kempe
“Okay, but on the overall business, because you probably have the best perspective on the entire app business. You do not see a drastic decline or overall increase in any direction equalling out among the different industries. Is that what you are saying?”
Tim Koschalla
“Yes yes. Actually, we mostly have performance customers and I do not think that they are very much impacted, those performance customers. So yeah in aggregate, I would say we don’t see an impact on our business from it so far. I do see an impact obviously on travel. I was actually supposed to be in San Francisco this week for the GBC games developer conference. Maybe you Erik as well. So, I had to cancel that trip obviously and then I was about to travel to Tel Aviv at the end of this month. It also won’t happen because everyone is quarantined there too so it’s more like this business travel has an impact.”
Andre Kempe
“I just see a comment from Piaf, he is confirming that there is a change in usage on the dating site of things and Puron says “don’t forget guys every ad is booked by companies beyond the mobile market who also have to make money with something as more companies go down. The next weeks for example the travel industry, the ad revenue will drop extremely.” Actually, this is what I would expect as well. I mean the situation as I have as an agency, for example Ad Partners are calling me, the partners where I’m actually booking traffic and asking me if I will continue doing so because apparently they have a few clients pulling out of the advertising entirely. I mean, it’s not only it’s not only travel, right? and maybe.”
Cristina Constandache
“There are lots of advertisers that are scaling down. It’s just that it’s very early days, and we can’t see it yet because it’s starting this week. It’s gonna be a huge decline of course, and I don’t think performances are gonna out balance the brand ones and ultimately everything is going to go down.”
Andre Kempe
“That’s a valid point. when you say the brands are pulling out, are you talking about something like Louis Vuitton or are you talking about common brands?
Cristina: “I’m talking about brands, anybody who’s doing branding campaigns rather than performance campaigns.”
Andre Kempe
“Because they are paying higher CPMs than us as performance marketers usually, right?”
Cristina Constandache
“Because they are paying on CPM to increase brand awareness and reach in a world that is, you know, closing upon itself. So, given that they are not with us, not linked to a sales KPIs. It’s linked to brand awareness, but the numbers are different there.”
Andre Kempe
“Good point do you from…”
Cristina Constandache
“It’s going to be the same on performance as well. It’s just that it’s not going to be as drastic, but performance is going to suffer as well for a lot of retailers running out of stock obviously. For travel or it goes without saying but a lot of sectors that are doing pure performance that are going to suffer. I would expect entertainment to go up or to at least be stable because our people need to do something when they are at home but for the rest I don’t see how.”
Tim Koschalla
“I can also confirm from what Christina said, I did talk to two large casual game developers today. I would be curious to hear your opinion as well, Erik on this. So, they said their CPMs were going down. But as a result of less brand buyers in the mix of the overall ad inventory purchase.”
Erik Hegeley
“So I guess that really depends where these casual advertisers are buying traffic from. Whether they are buying it from either of the inventories, more about you know gaming…”
Tim Koschalla
“Sorry. I mean public publishers monetizing their inventory with both demand from performance and brands and they said the brandy demand was coming down already.
Erik Hegeley
“There’s so I mean like from our point of view what we are seeing the data or ECPMs that we are getting are pretty much stable. But as Christina said these are early days, so it’s hard to say whether it’s because of that or whether something is going to be changing in the near future. But yeah, I would not expect it to be changing that drastically for entertainment or specifically gaming industry in terms of engagement, I mean users playing games. What I would expect and what I would be really aware of is the LTV curves that we have because of the monetization side of the data that we have on the monetization about the players they might not reflect the reality going forward because we might be seeing some behavior in the early days, but eventually those users might not be paying that much might not be spending that much money in the game. So it might be changing. So that’s something that needs to get a lot of attention going forward and that’s what we are definitely going to do.”
Andre Kempe
“That’s exactly something I would expect, I mean we are here in Spain in a lockdown for two weeks. But obviously we can expect another two weeks to be locked in. Question is how many people would actually lose their jobs. What impact does it have on the economy overall? And what does that mean for our subscription for in-app purchase businesses? So, this is certainly something we cannot predict yet, but for example right now the clients that I’m handling from the purchase and subscribe behaviour, actually see an increase probably because people are at home and in a kind of idle mode. So that’s certainly something we need to wait to happen. But discussing the…”
Cristina Constandache
“I think for casual games, even if you apply the worst-case scenario of people losing jobs and all given the addictive nature of games. You know, it’s like cigarettes. You know, even when they don’t have money, they are still buying them. So, I don’t think the impact is going to be so high. I would expect that first they’re not going to be the most valuable players, but they’re gonna provide some revenue along.”
Erik Hegeley
“Well, my take on this is that obviously people who are staying at home right now, they are going to look for entertainment services. Not only Netflix and streaming providers that are going to benefit from these. Obviously, entertainment as a whole will benefit out of this and most likely mobile games are going to get even more awareness right now, like hyper visual games digits for the industry last year or last three years. I would say it’s a broad topic. Many people play mobile games thanks to them. I think this is going to happen right now as well. And yeah, most likely some of the users might stick to it and you know, like get used to playing games. But whether the data that we have collected over the years about the paying users, are they going to behave the same way that we expect them to? That’s yet to be seen. So definitely a lot of attention has to be paid on this area and our models need to be refreshed on a regular basis.”
Andre Kempe
“That’s a really good point because so many advertisers jumped on all the more sophisticated prediction models and tried to assess the situation. How do we deal with this data? Do you take it out of your models or what do the data scientists say? Have you talked to your colleagues about this?”
Erik Hegeley
“Myself? Hmm. No, not really. I mean this is definitely not my main area of expertise. What I do know is that this is going to happen in a different way. I mean, there’s some analytical knowledge that helps but not a data scientist. What we are doing already, and we were really doing it prior to the situation; we are refreshing our models on a regular basis. There’s a schedule for that because obviously it’s changing, it’s an ever-changing industry and going forward. We are definitely going to have to stick with his routine and whether we are going to, you know, calculate the data from different boards or what you suggested. I don’t know. I really don’t think so, but perhaps that might be one of the ways we are definitely going to be looking into this.”
Andre Kempe
“Exciting time for the data scientists.”
Cristina Constandache
“One of the things Is that even if they want to model, they have nothing similar to model it against? So, you know a lot of these assumptions even if they are based on statistical models are not going to be accurate because this is not something that people have experienced before.”
Erik Hegeley
“Okay. So that’s the only certain thing, the uncertainty is going to increase over the next coming months.”
Andre Kempe
“Absolutely. Let me just quickly have a look at the questions that are rolling in here. Wait, let me scroll up. There’s another one. Which mouse? This mouse. So, Luis Guzman was asking in a scenario where the situation is improving your CAC, what do you think about the future LTV of this sort? I think we discussed this just recently like it’s unpredictable. But do you want to add something to this?
Erik Hegeley
“The only thing to add is that obviously, we have to work with predictable LTV models which have to be refreshed on a regular basis and leave it to your data scientists, talk to them often. But what I would do on UA side of things is that I would definitely set some, from-to, what can be the acquisition cost that we can move in between because the LTV is going to change to some range. So, you also need to know things like resetting the cost for the last seven percent for example, so make sure that you know, focus on this set KPIs more than before.”
Andre Kempe
“Maty is asking “shouldn’t the supply of ad space also increase due to people spending more time online. This would lead to further price drops.” I’d say yes.”
Cristina Constandache
“Yes, it is happening.”
Andre Kempe
“It is definitely happening.”
Cristina Constandache
“Yes, but then there is no advertising because the budgets are cut. Whoops.”
Andre Kempe
“Absolutely. I think that’s exactly the reason why the ad partners are calling advertisers and saying like, do you want to continue spending. Actually, it’s probably a good time to negotiate some bonuses or something. I should take a note. (laughs)”
Cristina Constandache
“But you can, is just you know, we all know that all this is very volatile.”
Andre Kempe
“It is true.”
Cristina Constandache
“Ultimately. We’re all heading in the same direction, which is down, so.”
Andre Kempe
“Absolutely.”
Cristina Constandache
“So The bonus out of 0 is still 0. I am very positive, my boy.”
Andre Kempe
“Lucas is asking. Do you think this may be the moment for services like Google Stadia to shine? Google Stadia is dead. (laughs) Any other comments on this? (laughs again)”
Erik Hegeley
“Much more dramatic, (Erik and Andre laugh) but curiously apple arcade released a hundred new games or whatever. Maybe they offered the trial or if you haven’t tried out your trial yet, this might be a good time for that.”
Andre Kempe
“A different discussion, but I’d say yes. Bjorn, my former Lovoo colleague, the founder Lovoo was also saying that’s the time for live streaming now, so probably not only live streaming services like Netflix and the look-alikes of it, but certainly person-to-person, peer-to-peer live streaming services are certainly shining. It’s something I can imagine music and lots of other apps are probably.”
Cristina Constandache
“Books.”
Andre Kempe
“Books. Absolutely.”
Cristina Constandache
“Anything with content. Yeah, anything with content.”
Erik Hegeley
“Entertainment overall.”
Andre Kempe
“Self-education. Yeah, so actually we should see stress has increased everywhere…”
Tim Koschalla
“Actually talking about which tool we are using here for this conference; Zoom right? Zoom stock. There’ve also massively increased after the whole Crisis because so many people are moving to video calls and all people are working from home now. So more and more people are using these services and they will be getting used to it. So even beyond the crisis, I think they will see a heavy increase of usage.”
Andre Kempe
“I think that the Zoom stock is just increasing because of the cool virtual background feature. (laughs)”
Cristina Constandache
“We see the same thing. So that’s what I said. All the number of calls, a number of group messages, a number of group calls; all of this has increased a lot in a week and it’s just the beginning. I mean for Italy to increase five times and we never looked at Italy to be honest. It was not one of the countries that we ever focused on and is not the only country. So we see usage of anything related to messaging and communication in general, of course is increasing.”
Andre Kempe
“Absolutely.”
Tim Koschalla
“I also identified one other winner that you might be aware of this company or this app. It’s actually a game around a pandemic, the case called Plague here. I’m looking at the ad request data right now. It’s a game published by Miniclip in London. And they’ve seen a massive uptake in usage starting from mid-January onwards.”
Erik Hegeley
“Yeah, they started climbing up the charts, I think already in December. But they’ve been banned in China. I’m not sure if last month or was it January, I am not sure. But yeah that app ranked up through the charts.”
Tim Koschalla
“Yeah. And I see ad requests per day before January 21st, they had about eight seven two two eight nine million a day ad requests and now they are at about 50 to 70 million.”
Andre Kempe
“Do you have to have this data ready to share on a screen or something?”
Tim Koschalla
“Yeah.”
Andre Kempe
“Let’s see some graphs.”
Tim Koschalla
“Here you go. Can you see my screen?”
Andre Kempe
“I do. I hope it works in a stream.”
Erik Hegeley
“Yeah, I can see it.”
Tim Koschalla
“Yeah, so I think this is pretty clear. So here you see the 20th 21st and this is probably where they rose to the ranks on downloads and consequently the number of ad requests. They are sending shut up. Up to a hundred million a day here.”
Andre Kempe
“Wait, hold on.”
Erik Hegeley
“That is probably a ban in China, mid-February.”
Tim Koschalla
“We are actually not processing ad requests from China. So this should not be showing in the data.”
Andre Kempe
“But hold on. This is from the game Plague, the monetization art.”
Tim Koschalla
“Yeah. This is just a number of ad requests they are sending which is a proxy of how many users are playing it and how long they are playing.”
Andre Kempe
“So they jumped from like 15 million per day or 10 million a day.”
Tim Koschalla
“Yeah.”
Andre Kempe
“Ten times.”
Tim Koschalla
“Yeah.”
Andre Kempe
“This is insane.”
Tim Koschalla
“Yeah, yeah.”
Andre Kempe
“Jesus Christ, this is a good time for them now.”
Tim Koschalla
“Absolutely. Sadly so.”
Andre Kempe
“Thanks for sharing. So okay, then when we see a drastic increase in supply and at the same time a drastic decrease in demand, I’m just saying Coca-Cola, but the brand budgets are pulling out but, it’s actually clear that CPMs for many many of us will go down. And therefore, CPIs should decrease dramatically if publishers do not pull the different lever. I was writing an article on LinkedIn about this topic and I think Tobias, also from Lovoo was commenting that as a publisher you still can level out the supply and therefore keep your CPMs up. Can you comment on this? Do you have an idea of how this actually works as a publisher?”
Cristina Constandache
“No, I would love to know how it works because I don’t see it work.”
Andre Kempe
“So for example, suddenly you see this increase like 10 times then you are not providing this 10 times inventory and because the number of advertisers stays the same. They are still asking or bidding on your inventory, but you’re not giving them the full inventory so you can keep your CPMs up.”
Cristina Constandache
“I see what you mean. Yes, but when you are at the mercy of let’s say performance advertisers versus branding, it is not the same thing because the KPIs are different. It’s not they’re not going to be just to get increased visibility. They are gonna see some posters or KPIs. I’m assuming that are matching expectations. So, I don’t think that the performance advertisers work like that. I mean, I’ve never seen them more like this. They test, retest with very small volumes in the beginning so yes. Then we see a demand level of sort of CPMs if I’m staying strong. But otherwise no. Performance will never replace branding, not a hundred percent anyway.”
Tim Koschalla
“One assumption that I read into this statement might be that I mean if you artificially keep the supply lower and you do have a bunch of people who are used to buying your inventory, the price will inevitably go up but that does also mean you’re leaving a lot of revenue on the table. Your CPMs might stay the same and maybe even increase but at the cost of maybe only selling half of the number of ads or even less than that”
Andre Kempe
“That makes total sense, having the opportunity to find the right level, but at least you could like artificially limit the supply side. I mean that’s happening with, `how do you say it in English?”
Tim Koschalla
“Natural resources.”
Andre Kempe
“Yeah, natural resources with diamonds. They do the same thing with gold, right though. They are holding this somewhere and just limit the supply to keep the prices up.”
Cristina Constandache
“The thing is as a publisher when you’re running on CPM, you have very little visibility on what is going on the advertiser’s side, so it’s not so easy to optimize even if you wanted to.”
Andre Kempe
“Good Point.”
Cristina Constandache
“This is not the same thing as if we were having access to all the stats and you could see you know, which ad placement, which portion of a traffic, which type of users are more valuable to the advertiser. You are just blind. So how do you limit the supply? Do you just put the finger in the air and say, oh, I’m going to limit the supply? You can’t because you don’t have the data. We don’t have abilities; we are blind to this.”
Andre Kempe
“Time for a good prediction model. (laughs) What does it say under use acquisition side? Are you doing user acquisition paid to use acquisition Cristina?
Cristina Constandache
“No, for a messaging app even in normal times it’s a very bad idea given that you are inviting people to download an app where if they don’t have friends, why exactly they use it. So, no. This has never been our strategy.“
Andre Kempe
“Makes sense. From your side, Eric? Have you kept your growth initiatives on the same level, or do you see potential to up your spend?”
Erik Hegeley
“No, no, as I said earlier, I mean we don’t don’t see much change in the behavior of pairs or for that matter that ECPM would somehow provide better quality or not for. It’s business as usual. We always operate this based on efficiency. So that’s why we use the LTE models. So that’s that’s why it’s so crucial. And more than ever it’s always been important for us, the smart and effective cash flow management now is going to be even more important in order to be wise, to stick to the KPIs, to stick to the ultimate model, the predictions and make sure to refresh it. That’s the only way I can do to keep the show, as you call it, going.”
Andre Kempe
“That’s true. I was just wondering when I saw this drastic increase in the Plague app. “
Erik Hegeley
“Well the Plague app is organic so that there’s a difference between us or like…”
Andre Kempe
“Yeah, sure. but you as an advertiser could jump on that additional inventory that’s available there to try to tap into that player market. Let’s say.”
Erik Hegeley
“It doesn’t necessarily have to be quality players. So like we use, we tap into these players as well through ad networks or even Facebook and Google because they have audience Network and access. So yeah. Reach up into the inventory as well. If there are users you’re looking for cheap KPIs.”
Andre Kempe
“It’s probably a lot of players that just tried any app that they find on the App Store at that moment like lots of exploration is going on certainly. I mean plague is just an example, but because the topic is very related, other apps are probably having this topic.”
Erik Hegeley
“Yeah. So I have been looking into this prior to this call or whether I can get some data, but there’s nothing I can show yet because it’s so early and I cannot see this data. But yeah, I would expect that perhaps exploring traffic or browsing traffic, organic might be increasingly going forward. But still there is just one part of the equation. If it is organic, it doesn’t matter but with preview it matters. Like what’s our LTV? Can we actually afford? Is the CPI lower than the LTV? That is always the ultimate equation.”
Andre Kempe
“That makes sense. I think we have covered a lot of angles of that outbreak here. I don’t know if the audience still has questions. Otherwise Tim, do you have any more comments or remarks?”
Tim Koschalla
“It just came to my mind that there is another winner of the crisis that I have seen. It’s a small thing though. From what I’ve seen ads, e-commerce apps for breathing masks around so I suppose there’s some people who have stocked them and are selling them at exaggerated prices. I don’t know if you’ve seen that as well.”
Andre Kempe
“It’s true. I mean one network was telling me that lots of advertisers are pulling out our advertisers that I never thought about actually. It’s for example like these who “make your teeth shine” sellers. I don’t know there are tools that make your teeth shine. So they are pulling out entirely because all the doctors are closed and you can’t go there to actually get those things. So that’s also a massive budget lying around from all the local stores everywhere that is not being used anymore and gives us cheaper buying opportunities. Let’s switch over. Hector, my former colleague from Trade Mob. Hey, Hector. He is asking about the post Corona scenario, travel apps, hotel apps, airlines and other related apps and verticals will have massive budgets. Yes, they are probably parking a lot of budget but they’re actually losing a lot of money, I think in the current situation.”
Cristina Constandache
“Yeah. That’s a lot of wishful thinking and everybody thinks like that’s after corona the activity is going to pick up to make up for the lost time. But the fact that a lot of companies are losing a lot of money in the meantime, means that this however is going to drag on for some time. Yeah, I would say it’s not gonna happen. Maybe retailers? There will probably be some sectors that will increase funds, but definitely not the typical big advertisers that we see. I don’t think that travel after they fire 90 % of a company will all of a sudden start advertising to bring back the fired ones. That would be weird.”
Andre Kempe
“That would be difficult. Certainly. I mean, I see all the restaurants closing down and there are certainly firing lots of people everywhere. If they are rehiring them immediately, who knows?”
Cristina Constandache
“How? With what money?
Andre Kempe
“Yeah. with what money? Money is gone. It’s gone. So, I don’t know how long we are not earning any money in many industries. So as it’s said, wishful thinking is probably the right term here.”
Cristina Constandache
“I am trying to remember to compare this crisis to the other crisis in 2008, but it’s not the same thing because of the health aspect of it. Because in 2008, I remember I was in performance back then. And actually the performance increased and especially when cash being sent back, people were looking to buy a lot of things, but to buy cheaper, but now is not the same thing because then, nobody was on lockdown. So, I don’t think we can compare it. It is going to be a lot worse than we have seen twelve years ago.”
Andre Kempe
“It’s a very unique situation. That’s true. Mary is asking do you have any insights about China? That’s a good question actually because China is actually improving with its situation. I do not have a clue about the Chinese market to be honest. So what about you guys?”
Erik Hegeley
“Me neither. I mean, we don’t advertise in China. All I know is from the news, like Apple closed all their stores and only kept them open in China. So that might mean that life is giving back normal in China.”
Cristina Constandache
“Cuz they reopened them in China.”
Andre Kempe
“Traffic-wise is Viber active in China?”
Cristina Constandache
“No. No, we have nothing to do with China. I mean, if you look on Amazon, I see that you can still buy a lot of products coming out of China, especially the hand sanitizers and things like this, the masks; whatever you want to buy it’s coming out of China, so apparently they are coming back but they took a hit as well. I was watching the news and the economy, It’s Whuan. It has never been lower, it has been like fourteen percent or something. I think they’re going to come back faster than the rest of us. That’s for sure”
Andre Kempe
“Huge Julius is asking, any data on meditation apps etc. I guess psycho hygiene and mental health will be more important as well during lockdowns. I would say yeah, they should have a lot of activity right now I would say. Especially when you have kids you probably need some meditation. (chuckles)”
Cristina Constandache
“For them or for you?”
Andre Kempe
“Both maybe (laugh). What do you say?”
Cristina Constandache
“Actually we haven’t seen any of these advertisements. That’s a good point. I mean, there’s still a lot of tabula and doubt brains out therewith content, but we haven’t seen anything from this sector. A lot of them are quite small I think but there are a couple of big players but a lot of the other ones are very niche and I am not sure that they can afford to advertise. Maybe now with ECPMs going down, they will have access to more traffic, but they need to have a solid monetization behind and if they do, would they even, really put money in? Any way. I don’t know. We haven’t seen any on Viber.”
Andre Kempe
“Is there a meditation app that is monetizing through ads? I mean Calm and Headspaces and Relax Medities? Are all these using subscription services, right? They’re not doing ad monetization. Do they?”
Cristina Constandache
“Why, it would make sense. You imagine a meditation app, which is the purpose to begin with but who knows. Maybe they sell data. They don’t need to monetize with ads. They can just sell the data. It’s probably what they should do.”
Andre Kempe
“True. Yeah, I don’t have any more questions. I don’t see any more comments from the audience. So if you want to say a last sentence or a recommendation to the audience.”
Erik Hegeley
“Sure, So I guess summing up what I said earlier is that only a certain thing is, uncertainty. Going forward. So we are over here definitely going to pay a lot of attention to LTV models and make sure that we watch closely how they change and responsible cash flow management. That’s going to be crucial for performance marketers.”
Andre Kempe
“Everyone is nervous. This is also something that I see like clients are calling me basically every day to ask what the situation is. The clients who do usually not ask this every day. So uncertainty is everywhere but at the moment I do not see a drastic impact definitely “
Cristina Constandache
“I think it is going to hit. In addition to what Eric said we should just be cautious and not give in to the panic. Already, there is a lot of panic around. There’s no point to have a rash reaction just because you are in panic mode. So we need to review literally. I think we need to take it one day at a time. And then from there look at the midterm because long-term nobody knows.”
Andre Kempe
“Okay. Let’s do this one last question from, I always pronounce it wrong. Maciej is actually asking Cristina what would you say about the opposing view that the 12 years ago crisis was caused by realization that there is no money where people thought there were, he is probably talking about the mortgage crisis in the US. This time Crisis is caused by the fact that people are post working, so they can’t go to work anymore. This would make it easier for the economy to bounce back as lockdown will stop at some point and people will get back to work. But there’s no real question, Maciej.”
Cristina Constandache
“No, this is just the opposing view. I mean we know where the first crisis was started. It’s just that last time we did not have the entire sectors that completely stopped. So I think even if people were losing money, let’s say bars restaurants, I don’t know if the travel industry had fewer clients. They had fewer clients. They did not have zero clients because they could not do that activity. So, it’s very difficult to compare because complete lockdown even if it’s temporary and temporary doesn’t mean two weeks. Like what happened in Spain and Italy we have already seen and in France, we know already that is going to be longer than that. So, how long can you stay alive like this? You can last for a month or two if you have cash reserves and okay, but big companies do have cash reserves but beyond that complete shutdown, I don’t see how you can bounce back and say ‘oh now we’re back.’ It’s not starting as easy as if nothing happened. I mean the German government and the U.S, included. they don’t have to pay for the people who are out of work. So what will happen to these people? So, no it’s not the same thing as 12 years ago.”
Andre Kempe
“I would agree. But okay. Let’s say a bigger discussion about the macroeconomy and the actual impacts on it. I believe we run into a recession if this persists for a longer time, the stock markets are showing this and if people lose jobs, especially in countries that don’t have a social system to care for these kinds of things. They will run into massive issues. Nevertheless, I thank you for joining the stream and being so open to discussing the topics. I’m still trying to update the article that I had on LinkedIn about the effects on the app industry. So, if anyone has data and wants to share it, please send it to me. It would be fantastic. I would add it to the article and keep the community updated with the latest insights. And yeah, thanks for having us. Thanks for your questions. I hope to see you soon with further information or more cool live streams. Thank you very much, guys. It was a pleasure talking to you.”
