Searching for Profits in Mobile

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When conducting an A/B test, VeggieTales, a children's media property, found that it got a significant increase in revenue per visitor on a mobile device on a version of its site optimized for phones and tablets compared to its standard view. Credit Screenshots via Optimizely
Maybe the problem of making money in mobile is getting easier, using the same basic technique that was used for the web. Or for that matter, for junk mail.

Optimizely specializes in A/B testing services for Web companies — a popular method of making design and content choices on the web. The idea is that instead of developing a theory about what might work, a company sends out several versions of, say, an ad or a photo spread, and the most popular one becomes a standard, at least until the next test.

On Monday, Optimizely said it will introduce the same capability for mobile services, with a goal of generating revenue from mobile marketing and games.

“This enables production managers and designers, marketing people, the ability to change a mobile app as much as they want,” said Dan Siroker, co-founder and chief executive of Optimizely. “The feedback loop is tightening, and they’ll know faster what is working.” The particular focus, he said, is mobile marketers, including ads and offers.

Another company, Kii, said recently that it would also add this kind of testing to its cloud-based mobile application and game development platform.

At any given moment, Facebook is carrying out dozens of different A/B tests across its site. So is Google, which popularized the method a decade ago as a way of telling, often within two weeks of a product’s introduction, whether it would be successful.

Mr. Siroker, who worked at Google, was later the director of analytics during President Obama’s 2008 campaign. He started Optimizely after that. In 2012, both the Obama and Romney campaigns were Optimizely customers.

In mobile, the customer’s test might be something like changing the font size on a special offer, or sending two different colored images of a couch. Difficulty levels in games, like how easily a bird flaps across a screen, could also be easily adjusted.

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Dan Siroker, chief executive of Optimizely, worked at Google and as the director of analytics for President Obama’s successful 2008 campaign.Credit

The “test as you go” method goes back at least as far as junk mail, or if you prefer, direct marketing. Marketers would experiment with envelope size, wording of a pitch letter and many more things, sometimes with five or more versions at once.

On the web, though, there are no postage costs, and the audiences are frequently so large that testing 1 percent of the audience can yield statistically significant information. And the other customers don’t know anything is changing. So far, it has not been a standard in mobile development.

Big companies with sufficient technical resources, like Google and Facebook, are already doing A/B tests on their mobile platforms.

Optimizely, which has 6,000 customers, including Starbucks and Disney, provides an easy-to-use way to make design changes, look at them on a single computer, then launch them as a test. So far its customers have run over 437,000 experiments for five billion views. Kii, which was founded in 2007, says it has something over 5,000 developers using its service.

“A lot of apps and games are still developed purely on gut feeling,” said Phani Pandrangi, chief product officer at Kii. “This way, they can change around game design, difficulty and look. Developers can see if the conversion is the same at $2 a game as at $5 a game.”

The Kii product works for both Apple’s iOS and Google’s Android systems, and will be offered as part of its service, which is free to $200 a month, depending on usage.

Optimizely’s product, which began development last summer, is out only on iOS so far, but there are plans to make an Android version. Optimizely’s pricing is expected to be “in the ballpark” of its web product, which runs between $20 and $400 a month, depending on traffic, said Chrix Finne, senior product manager at Optimizely.

“Our customers started getting decent data on their websites about five to eight years ago, and wanted to start turning it into action,” Mr. Finne said. “We started seeing a lot of demand for a mobile product about a year ago. Now they want to be optimizing for every point of their business.”