Online Panel Discussion – Impact of Corona on the app industry
Andre Kempe: Thanks for joining the stream. I think you can see our names and who we are and what, we work for. But before we introduce ourselves, let’s maybe quickly say something about the situation itself. Obviously, we do not hope that anyone is impacted in a bad way with what’s going on, but I mean, you all know the news. I’m located in Spain 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, but that’s exactly what we want to talk about today. Who is still in, who is out, and what are the effects on the app industry itself? So let’s maybe have a quick introduction around Erik. Do you want to start?
Erik: Yeah, sure. So Hey guys first of all, thanks for having me I’m from Pixel Federation, I’m head of growth marketing over there. Pixel Federation is a company based in Slovakia. We also are shut down over here. Quarantine everybody is at home. We are developer of mobile games. Probably the biggest titles support dig adventure or transition cube my day to day agenda at pixel Federation for the past half year or so has been about around ASO. It’s moving towards new titles right now. And yeah, I’ve been in Datastream for three years. I think that’s about it.
Andre Kempe: What what’s the typical data set that you look at on a day to day basis?
Erik: I mean, I look cross data. So I look at the main KPIs, like how you performed in terms of like performance marketing spent against predicted revenue yesterday’s revenue for the company engagement like 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 needs to be looked.
Andre Kempe: so everything growth related at marketing user acquisition?
Erik: Yeah. Yeah, pretty much.
Andre Kempe: Okay. Thanks Tim Koschella.
Tim Koschella: Yeah. Hey everyone. Thanks Andre Kempe, for having me here. My name is Tim Koschella 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 like the growth from where it started back in 2012 till today. And I co-founded Kayzen with two partners back in end of 2018, which what we do is like we provide software for sophisticated buyers to buy programmatically in-house. So that they can yeah. Acquire users or retarget users across all of the different programmatic-enabled inventories out there.
Andre Kempe: And what is the typical data set you look at on a day to day basis?
Tim Koschella: So we look at the ad requests that are available on the market. So they’re traded through about 25 in-app exchanges. So we look at how much inventory is there how much inventory in each country, how much inventory on each ad format how much 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 like click through rates, 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 campaigning and customer
Andre Kempe: okay. And yeah, welcome Cristina. Maybe you say a word about you.
Cristina: Thank you. So I’m Cristina I’m CRO at Viber. I’m in charge of all the revenue that we are driving from monetization activities. And not only I’ve been in the industry for eight years as well, ever since apps showed up. And they typically look at revenue, but behind that, of course, you’re going to have other quests you’re going to have fill rates. You’re going to have CPMs and then you’re going to have other things like number of messages delivered SMS, 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: It is. So 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, let’s say very relevant for us or very big, but we’ve seen the activity increase around five Tim Koschellaes,
Andre Kempe: Five Tim Koschellaes even. Okay. Yeah. That’s a lot. Is that something that, where you say that’s easy to handle still, like from a load perspective? Or is it like
Cristina: Yes. Okay. Yeah, this is not a, there was a 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 terrible service. So it means that the capacity of messages and the calls is not an issue.
Andre Kempe: okay. Erik, you work for a game publisher, so all things related to people staying at home or being in idle mode what is your current situation like? Do you see drastic increase or slow growth?
Erik: Not really. I’ve been looking into the data ever since we announced this call a little bit more diligently and actually found out nothing that would stand out. If I didn’t know about the situation, if I didn’t read the news there is nothing that, that data would suggest so far. That’s been happening. I mean, there’s, obviously there are some changes in CPMs and CPR, CPIs and all these acronyms that we use so much. But I wouldn’t attribute it to the, changes in the situation in the world.
Andre Kempe: So it’s a normal
Cristina: No, I said because of women’s day, last week is true he data is not it’s a little bit skewed because women’s day was huge, especially for us. And especially in CIS 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 cause it’s also a first country that went on lockdown. And it’s clearly linked to, this’s probably today we say with the most obvious pattern and now we’re monitoring France to see how the revenue react.
Andre Kempe: Okay. So this…
Erik: yeah, definitely agreed.
Andre Kempe: So that indicates you are let’s say benefiting from the situation actually like more usage, more at revenue probably. And I don’t know.
Cristina: Yes, but I think it’s temporary. So it,
Andre Kempe: Hopefully.
Cristina: it’s very early days. No, the benefit is temporary, unfortunately. I think that ulTim Koschellaately this is going to be very negative for all of us.
Andre Kempe: Okay. Tim Koschella, can you say a word about you, your business, like you as a DSP, you certainly see two, 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 Koschella: Sure. Yeah. Yeah, I, I wouldn’t say we are 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 they’re integrated with. And hence we would see the volume of traffic available to buy. So if usage of apps goes up in aggregate, for example, if like people staying at home means that people are using apps much more and hence creating much more ad inventory, then 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 Koschella: Yeah, so I was looking into patterns in Italy specifically. And I did look into a couple of dating apps. And then I looked into number of game apps, mostly casual game apps, and I looked into data from look yeah. Soccer apps, like apps that help you track the soccer league tables. So well I have to say the games similar to what Erik already said. I didn’t see like any change that is significant enough to say that this is impacted by this like that yeah. That it’s rather significant enough. Neither did I see that on the dating apps. I did see like 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: Also Spain and, and the UK. So it might be, yeah. Might be some correlation.
Tim Koschella: Yeah. So I think this is maybe one of the app categories where we can see an impact because people typically people 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. Yeah. 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, as a DSP, you have the best perspective on the entire app business. You do not see a drastic decline or increase in any direction is rather probably equalling out among the different industries. Is that what you’re saying?
Tim Koschella: 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 travel. I was actually supposed to be in San Francisco this week for GDC games, developer conference. Maybe you Erik as well. So I had to cancel that trip obviously. And then yeah was, about to travel to Tel Aviv end of this month. Also won’t happen because everyone is in quarantine there too. So it’s more like the business travel. I think that’s very much impacted.
Andre Kempe: and just hear a comment from Pier from Lovoo. He’s confirming that there is a change in usage on the dating side of things. And Pier 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 that I have as an agency is that for example, ad partners are calling me so 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 travel. And maybe–
Cristina: I know there are lots of people, 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. But it’s going to be a huge decline of course. And I don’t think the performance are, are going to outbalance the, the brand ones and ulTim Koschellaately everything is going to go down.
Andre Kempe: That a valid point. When you say, the brands are pulling out what would that, for example, be like are you talking about something like Louis Vuitton, or are you talking about 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: Because they are paying on CPM to have increased brand awareness and reach in a world that is closing upon itself. So given that they’re not linked to sales KPI, it’s linked to brand awareness. The numbers are different there
Andre Kempe: good point. Do you from the,
Cristina: I think 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 for example, retailers running out of stock obviously travel it goes without saying. There are lots 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 cause people need to do something once they’re at home, but for the rest I don’t see how–
Tim Koschella: I can also confirm from, sorry, Erik. I cut Yeah. From what Cristina 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 there eCPMs were going down. But as a result of less brand buyers in the mix of the overall ad inventory purchased.
Erik: So I guess that really depends where these casual advertisers are buying traffic from. So whether they’re where they’re buying from, whether their ad inventories is more about, with gaming or they’re
Tim Koschella: Sorry. I mean, pub publishers, monetizing their inventory with both demand from performance and brands. And they said, okay, the brand demand was coming down already.
Erik: Yeah. So, I mean, like from our, our point of view, what we are seeing, the data, our eCPM that we are getting are pretty much stable. But as Cristina said, it’s pretty early days. So it’s hard to say like, whether it’s because of that or whether something is going to be changing in the near future, but yeah, I wouldn’t expect it to be changing that drastically for the entertainment or specifically gaming industry. In terms of like engagement, I mean, users playing games what I would expect though, and what I would be really aware of is the LTV curves that we have because the monetization side of, of the data that we have on the monetization about the payers, they might not reflect the reality going forward because they might be seeing some behaviour in the early days. 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 if, I mean, we are now in a lockdown here in Spain, we are in a lockdown for the next two weeks. But obviously we can expect another two weeks to be locked in. The question is how many people will actually lose their jobs? What impact does it have on the economy overall? And what does that mean for our subscription or in-app purchase businesses. So this is certainly something we kind of predict yet. But For example, right now the clients that I’m handling from the purchase and subscribe behaviour, I actually see an increase probably because people are at home and in kind of idle mode. So that’s certainly something we need to wait to happen. But discussing the money. Yeah, sorry.
Cristina: I think that for casual games even if you apply the worst case scenario of people losing jobs and all given the addictive nature of games, it’s like cigarettes, even if they, they don’t have money, we are still buying them. So I don’t think the impact is going to be so high. I would expect that, of course they’re not going to be the most valuable players, but they’re going to provide some revenue and long tail that given the volumes can be, relatively significant.
Erik: Well, so my, my take on this is that they obviously people are people who are staying at home, right now they are going to look for entertainment. So it’s not only Netflix and streaming providers that are going to benefit of this obviously entertainment as a whole will benefit out of this. And most likely mobile games are going to be, get even more awareness right now, like hyper casual games did it for the industry last year or last three years, I would say. So it’s like more broad topic, more people play mobile games, thanks to them. I think this is going to happen right now as well.
Most likely some of the users might stick to it and, like get used to playing games, but better the data that we have collected over years about the paying users are going to be, are they going to behave the same way that we expect them to that’s yet to be seen. So definitely, definitely a lot of attention has to be paid in this area and our models need to be refreshed on a regular basis.
Andre Kempe: That, that’s a really good point because so many advertisers jumped on all the more sophisticated prediction models. And yeah, trying to the question is, How do you deal with this data? Do you take it out of your models or what do the data scientists do? Have you talked to your colleagues about this
Erik: Myself? No, not really. I mean, this is definitely not my main area of expertise to be explaining this. What I do know is that this is just definitely what’s going to happen. I mean, there’s some ethical knowledge that I have, but not a data scientist, but yet what we are doing already. And we’d be doing it prior to the situation. We are refreshing our models on a regular basis. So 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 to this routine and whether we are going to be, calculating the data from different cohorts or what you suggested. I don’t know. I, 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 Tim Koschellaes for the data, data scientists.
Cristina: One of the things is that even if they want to model, they have nothing similar to model it against. So a lot of these assumptions, even if they’re based on statistical models are not going to be accurate because this is not something that people have experienced before.
Erik: Yeah. So that’s, that’s the only certain thing the uncertainty is going to be increased 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. So Louis Guzman was asking in a scenario where the situation is improving your Cache what do you think about future LTV of this cohort. I think we discussed this just recently, like it’s unpredictable. But do you want to add something to this?
Erik: I mean, only thing to add to this is obviously have to work with, with the predictable LTV models, which has to be refreshed on a regular basis and, leave it to our data scientists, talk to them often. But what I would do on, on the UA side of the things, I would definitely set some, some from to like what, can be the acquisition costs that we can move in between because the LTV is going to be changed. There’s going to be some range. So you also need to, like D seven cohort, for example, should help a loss of 7%, for example. So make sure that you, you know focus on this set KPIs more than before
Andre Kempe: Matti is asking shouldn’t the supply of ad space also increase due to people spending more Tim Koschellae online. This would lead to further price drops, I’d say, yes.
Cristina: It’s happening.
Andre Kempe: It’s definitely happening.
Cristina: It’s easy. Yes. But then there is no advertising cause the budget are cut whoops.
Andre Kempe: Absolutely. I think that’s also the reason why the ad partners are calling advertisers, like do we want to continue spending actually it’s probably a good Tim Koschellae to negotiate some bonuses or something. I should take a note
Cristina: but you can, it’s just that we all know that all this is very volatile.
Andre Kempe: Yeah. It’s true.
Cristina: UlTim Koschellaately we’re all heading in the same direction, which is down. So
Andre Kempe: Absolutely
Cristina: A bonus out of zero is still zero I am very positive by the way,
Andre Kempe: Lukash is asking, do you think this may be the moment for services like Google stadia to shine? Google stadia is debt. Any other comments on this?
Erik: Not much more to add. But curiously, apple arcade had released a hundred new games or whatever it maybe. Maybe if they offered the trial or if you haven’t tried out your trial yet this might be a good Tim Koschellae, perhaps
Andre Kempe: Different discussion, but I’d say yes. Pier from my former Lovoo colleague or former founder of Lovoo was also saying that’s the Tim Koschellae for live streaming now. So probably not only live streaming services, like Netflix and the local likes 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: Books.
Andre Kempe: books. Absolutely.
Cristina: Anything with content? Yeah. Anything with content
Erik: Entertainment overall?
Cristina: Yeah, Exactly.
Andre Kempe: Self-Education yeah. So actually we should see stress
Cristina: And the movie studios everywhere.
Yeah.
Tim Koschella: Actually talking about which tool we are using here for this conference. Zoom stock. The Zoom stock 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 Zoom stock is just increasing because of the cool virtual background feature.
Cristina: But we see the same thing. So that’s what I said. All the number of calls, the number of group messages, the 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 Tim Koschellaes and Italy, we would never look at it to be honest, it was not one of the countries that we ever focused on. And it’s not the only country. So the usage of anything related to messaging communication in general, of course increasing.
Andre Kempe: Absolutely. Yeah. I don’t know,
Tim Koschella: I’m also identified when other winner but you might be aware of this company or this app it’s actually a game around a pandemic. The game is called plague, 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 in usage starting from mid-January onwards.
Erik: Yeah. So they started climbing up the charts I think already in December. But they’ve been, I think, banned in China. I’m not sure if last month or was it in January already? I’m not sure, but yeah, that app ranked up through the charts.
Tim Koschella: Yeah. And I see like Ad requests per day before January 21st, they had about 7 to 8, 9 million a day at requests. And now they are at about 50 to 70 million.
Andre Kempe: Do you have, do you have this data ready to share on a screen or something because you’re just,
Tim Koschella: Yeah. Yeah. So
Andre Kempe: Let’s see some graphs.
Tim Koschella: sure. Here you go. Can you see my screen?
Andre Kempe: I do. I hope it works in the stream. I don’t know.
Erik: yep. I can see it.
Tim Koschella: Yeah. So I think this is pretty clear. So here you see the twenties 21st and that this is probably where they rose the ranks on downloads and consequently, the number of ad requests. They are sending shut up to a hundred million a day here.
Andre Kempe: Wait, Hold on.
Erik: And that looks like a ban in China over there mid, mid-February.
Tim Koschella: We are actually not processing ad requests from China, so this should not be showing in the data.
Andre Kempe: Wait, hold on. This is from the game plague the monetization part. Yeah.
Tim Koschella: This is just the number of ad requests. They are sending, which is a proxy of how many users are playing it and how long they’re playing.
Andre Kempe: So they jumped from like 15 million. What is that? Per day? Yeah. 15 or 10 million a day. Yeah.
Tim Koschella: Yeah.
Andre Kempe:10 Tim Koschellaes.
Tim Koschella: Yeah.
Andre Kempe: This is insane.
Tim Koschella: Yeah. Yeah.
Andre Kempe: Jesus Christ. This is a good Tim Koschellae for them now.
Tim Koschella: Absolutely. Sadly. So
Andre Kempe: Thanks for sharing. So, okay then when we see a drastic increase in supply and in the same Tim Koschellae, a drastic decrease in demand. So Coca-Cola, I’m just saying Coca-Cola, but the brand budgets are pulling out. 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 a different lever. I think to in my, 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, the supply and therefore keep your CPMs up. Can, can you comment on this? Do you have an idea how this actually works as a publisher?
Cristina: 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 Tim Koschellaes, then you just say, I’m not providing this 10 Tim Koschellaes inventory. And therefore, because the number of advertisers let’s say stays the same, they are still asking or bidding on the inventory, but you are not giving them the full inventory so you can keep your CPMs up.
Cristina: Ah, I see what you mean. Yes. But when you are at the mercy of let’s say performance advertisers versus branding, it’s 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 going to be, if they see some post-install KPIs, I’m assuming that are matching their expectations. So I don’t think that the performance advertisers work like that. I mean, I’ve never seen them work like this they test, they test with very small volumes in the beginning. So yes, this can, if you apply this over, what period of Tim Koschellae? Three months, maybe yeah. You receive the demand levels or the eCPM staying strong, but otherwise no performance will never replace branding, not a hundred percent Anyway.
Tim Koschella: 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 buy your inventory, the price will innovatively go up, but that does also mean you’re leaving a lot of revenue on the table. Your eCPMs might stay the same and maybe even increase, but at the cost of maybe only selling half of the number of ads are even less than that.
Andre Kempe: That makes sort of sense. I mean, you obviously need to find the right level. But at least you could like artificially limit the supply site. I mean, that’s happening with Natural Resources.
Tim Koschella: Natural Resources.
Andre Kempe: Yeah. With natural resources with diamonds they do the same thing with gold, they are hoarding this somewhere and just limit the supply to keep the prices up.
Cristina: The thing is, as a publisher when you’re running on CPM, you have very little visibility on what is going on the advertiser side. So it’s not so easy to opTim Koschellaize, even if you wanted to
Andre Kempe: Good point.
Cristina: It’s not the same thing as if we were having access to all the stats and you could see you know, which app placement, which portion of a traffic, which type of users are more valuable to the advertiser. You’re just blind. So how do you limit the supply? You just put a finger in the air and say, oh, I’m going to limit the supply. You can’t. Cause we don’t have the data. We don’t have visibility into anything. We are blind for this
Andre Kempe: Tim Koschellae for a good prediction model. What is it on the user acquisition side? Are you doing user acquisition, paid user acquisition, Cristina?
Cristina: No. This for a messaging app even in normal Tim Koschellaes is a very bad idea. Given that you are inviting people to download an app where if they don’t have friends, why exactly would they use it? So, no, this has never been our strategy.
Andre Kempe: Makes sense. From your site, Erik have you kept your growth initiatives on the same level or do you see potential to up your spend?
Erik: No, not really. As I, said earlier, I mean, we don’t see much change of behaviour of payers or for that matter that eCPM would somehow provide better quality or whatnot for us it’s business as usual we always operate it based on efficiency. So that’s where the models LTV models come in. 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 it’s going to be even more important, to be wise to stick to the KPIs, stick to LTV model the predictions, make sure to refresh it. That’s the only way I, see, to keep the show as you call it going
Andre Kempe: That’s true. I was just wondering when I see this drastic increase in, in the plague app if,
Erik: The plague app that doesn’t mean organic. So there’s a difference between that.
Andre Kempe: But you, as an advertiser could jump on that additional element that’s available there, to try to tap into that player market, let’s say,
Erik: So doesn’t necessarily need to be a, you know, 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, we tap into that inventory as well. If there are users that we are looking for who achieve our KPIs.
Andre Kempe: There are probably a lot of players that just tried any app that they find on the app store at that moment. Lot of let’s say exploration is going on. Certainly. I mean, plague is a different example, but because of the topic is very related, but other apps are probably having this topic.
Erik: Yeah. So I’ve been looking into that prior to this this call whether I can get some data, but there’s nothing I can show yet because, because it’s so early and I cannot see these data, but yeah, I would expect that perhaps explore traffic or browsing traffic organic might be increasing going forward. But still that’s just one part of the equation with organic, it doesn’t matter, but with paid it matters like what’s our LTV, like can we actually afford is the CPI lower than the LTV? That’s always the ulTim Koschellaate equation.
Andre Kempe: Yeah, that makes sense. I think we’ve covered a lot of angles of that outbreak here. I don’t know if the audience still has questions otherwise. Tim Koschella, do you have any more comments or remarks?
Tim Koschella: I was– just came to my mind another winner of the crisis that I that I’ve seen. I mean, it’s a small, just a small thing, but I’ve seen ads, ecommerce apps for breathing masks around. So I suppose there are some people who have stock and are selling them at exaggerated prices. I don’t know if you have seen that as well.
Andre Kempe: It’s true. One network was telling me that lots of advertisers that are pulling out are advertisers that I never thought about. Actually for example like these make your teeth shine sellers, I don’t know there’s tools that makes 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, a massive budget lying around from all the local stores everywhere. That is not being used anymore and, and gives us, let’s say cheaper buying opportunities. But let’s maybe switch over. Hector my former colleague from trade mob actually, Hey, Hector,, he’s asking about a 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. Yeah, in the current Situation,
Cristina: I think that’s a lot of wishful thinking and everybody thinks that after Corona the activity is going to pick up to make up for the last Tim Koschellae. But the fact that a lot of companies are losing a lot of money in the meanTim Koschellae means that this however is going to drag on for some Tim Koschellae.
Andre Kempe: Yeah.
Cristina: It’s not going to maybe retailers, there will probably be some sectors that will increase spend. But definitely not the typical big advertisers that we see. I don’t think that travel after they fire 95% of a company will all of a sudden start advertising to bring clients back. It’s going to be a little bit weird
Andre Kempe: Will be difficult. Certainly. Yeah. I mean I see all the restaurants closing down and they are certainly firing a lot of people everywhere. If they are rehiring them immediately, who knows that’s how,
Cristina: How with what money?
Andre Kempe: With what money it’s left. It’s, it’s gone, because I don’t know how long we are not earning any money or many industries. Won’t. You said wishful thinking is probably the right term here. Yeah, it’s true.
Cristina: I’m trying to remember to compare this crisis to the other crisis in 2008. But it’s not the same thing because of a health aspect of it, because in thousand and eight, I remember I was in performance back then and actually the performance increased and especially all the incentive cash back sides, people were looking to buy a lot but to buy cheaper, but now it’s not the same thing because nobody was on lockdown. So I don’t think we can compare. I think it’s going to be a lot worse than we have seen what we have seen. 12 years ago.
Andre Kempe: It’s a very unique situation. That’s true. Maddy is asking. Do you have any insights about China? That’s a good, good question, actually, because China is apparently on a, let’s say improving is actually improving, with their situation. I do not have a clue about the Chinese market to be honest. What about you guys?
Erik: Me neither. I mean, we don’t advertising China. All I know is just, just from use, I mean, things like Apple close, all their brick and mortar stores and only kept them open in China. So that might mean that the life is getting back into normal.
Cristina: They reopen them in China cause they were close to
Erik: They reopen them. Yeah. Yeah, that’s correct. They reopen them. Who knows? I know
Andre Kempe: Like traffic wise is Viber active in China?
Cristina: No, not after last Tim Koschellae. No, no, no. We have nothing to do with China. I see. 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’re coming back, but they took a hit as well. I was watching the news and the economy has never been lower because like 14% or something like that. I think they’re going to come back faster than the rest of us. That’s for sure.
Andre Kempe: Any data — Julis any data on meditation apps et cetera, 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 who probably need some meditation.
Cristina: For them or for you?
Andre Kempe: Both. Maybe. What do you think?
Cristina: Now we actually haven’t. We haven’t seen any of these advertising. That’s a good point. I mean, it’s still a lot of brains out there with content, but we haven’t seen anything from this sector. A lot of them are quite small. I think that, there are a couple of big players, but a lot of the other ones are very niche. I’m not sure that they can afford advertise maybe now with eCPMs going down, they will have access to more traffic, but they need to have a solid monetization model behind. And if they do, would they even, really put money in anyway? I don’t know, I haven’t, we haven’t seen any on Viber.
Andre Kempe: Is there, is there a meditation app that is monetizing through ads? I mean, calm and, and head spaces and relax me. They’re all using subscription services, they are not doing ad monetization, do they?
Cristina: It would make sense because imagine an add on a meditation app, it is sort of defeats the purpose of meditation to begin with, but who knows, maybe they sell data, so they don’t need to monetize with ads. They can just sell data. Which probably they do, or 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 recommendation to the audience
Erik: Yeah, sure. So, so I guess it’s what just summing up. What I said earlier is that only certain thing is the uncertainty going forward. So we are definitely going to help pay a lot of attention to LTV models and make sure that we watch closely how they change and responsible case for management. That’s, 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? Clients that are usually not asking this every day. So uncertainty is everywhere, but at the moment I do not see a drastic impact. Definitely.
Cristina: Yeah, I think it’s going to hit, so I think, I mean, in addition to what Erik said we should just be cautious and not give into the panic because 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 you literally, I think we need to take it one day at a Tim Koschellae. And then from there look at the midterm because long term nobody knows
Andre Kempe: Okay. Let’s there’s one last question from, I always pronounce it wrong. Please understand if I’m pronouncing it wrong. He’s actually asking Cristina, what would you say about the opposing view 12 years ago, crisis was caused by realization that there is no money where people thought they were. Probably he’s talking about the mortgage crisis in the US. This Tim Koschellae crisis is caused by the fact that people are paused working so they can’t go to work anymore. This would make it easier for economy to bounce back. As lockdown will stop at some point and people will get back to work, but there’s no real question much.
Cristina: No, it’s just be opposing to view I mean, we know where the first crisis was started. It’s just that last Tim Koschellae we did not have entire sectors, that completely stopped. So I think even if people were losing money let’s say bars, restaurants, I don’t know, the travel industry had less clients. They had less clients. They did not have zero clients because they could not do their activity. So it’s very difficult to compare because complete lockdown, even if it’s temporary and temporary, it doesn’t mean two weeks. Like what happened in Spain and Italy an in France, we know already that it’s going to be longer than that. So how long can you stay alive like this? You can last for a month too, 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. But start as if nothing happened.
Andre Kempe: I mean that German government
Erik: Sorry. So don’t forget that a lot of the countries us included don’t have what is it, the, you know, the, basically the Shamash, what is that? Pay. Yes, no, no. They don’t have pay for the people that are out of work. So what will happen to these people it’s not the same thing as 12 years ago.
Andre Kempe: I would agree, but okay. That’s, let’s say a bigger discussion about the macro economy and the actual impact on it. I believe we run into a recession if this persists for a longer Tim Koschellae the stock markets are showing this and if people lose jobs, especially in countries that don’t have a social system, social care these kind of things, then they will run into massive issues I also believe that.
Nevertheless, I thank you for joining the stream and being so open to discuss 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, wants to share data, send it to me would be fantastic. I would add it to the to the article and keep the community updated with latest insights. And yeah, thanks for having us. Thanks for your questions. So I hope to see you soon with further information or more cool live streams. Thank you very much, guys. It was a pleasure to talk to you.
