A few years ago, we began exploring the inter-connectivity of the mobile economy. At the time, “deep linking”一the use of a link to connect a user with a specific piece or page of content within an application, rather than to the desired content’s app homepage一was all the rage. The main reason this trend exploded was because content consumption migrated from desktop to mobile. Then, within mobile, content consumption started to occur inside applications. While I worked to understand if the emerging deep linking functionality would present an investment opportunity, I came across a solution that leveraged this technology and set out to solve a different, but also large pain point — and that’s when I recognized a parallel to the web 1.0 world.
A Look at Today’s Mobile Economy
Today, the mobile economy is $100 billion, and growing fast. Forrester projects that mobile commerce will reach $149 billion in the U.S. alone by 2019. However, less than one percent of mobile revenue comes from affiliate sales. Compare that with web-based e-commerce, where 22 percent of the $400 billion market is driven through partnerships and performance marketing sales. Thus, the mobile affiliate marketing space is just beginning, and almost non-existent.
The lack of a platform built to support mobile partnerships and performance marketing is likely the result of three main factors: First, mobile attribution has been technically difficult to identify due to the limitations of current deep linking technology. Second, publishers are often reluctant to send users off of their property if they are not able to benefit financially from doing so — and mobile web hasn’t yielded strong results for retailers. And third, the complexity of routing the user to the right destination一either app or mobile web一has led to broken flows and lost transactions.
No company has done a great job at putting a thoughtful, end-to-end solution in place until now.
Enter Button — the leading platform powering connections across the mobile economy. To unpack this: say you’re searching for a product and reading an article with a review. Button’s platform can semantically analyze what you’re reading about and intelligently link you to the app that sells that product. If you don’t have the app, Button can route you wherever the publisher wants — to an app flow that drives higher revenue or a mobile web flow that yields lower friction (but lower conversion). The publisher now has a new revenue stream that historically has been very lucrative on desktop but until now, impossible to replicate on mobile.
Connecting the Mobile Economy
This new transactional marketplace is a win-win-win for all involved: merchants appreciate the new found traffic; users are provided a more succinct consumption experience; publishers better monetize their users — and this couldn’t come at a better time.
The traditional advertising model, where publishers barrage users with pretty, but irrelevant images, is failing as a business model for everyone but Facebook and Google, particularly in mobile. Users are often annoyed, merchants aren’t achieving their desired outcomes, and publishers are settling for lower rate cards as they acknowledge the decreased efficacy of the approach. Button is providing all with a new opportunity to generate revenue and enhance the user experience.
However, in order for Button to achieve transformative influence within the mobile economy, it must build a strong network of publishers. Button has already amassed over 225 million mobile active users (MAUs), and this is quickly rising with each additional partner. Today, you can find Buttons across an incredible list of international properties — including Huffington Post, Groupon, Condé Nast, Hotels.com and more.
What Publishers and Merchants are Saying
A major part of our diligence involved speaking with these publishers to understand their experience working with Button, and how valuable the initiative was to their company within the larger context of their business goals. After speaking with more than a dozen publishers, we learned the following:
- It’s clear — mobile is the dominant platform for most of these businesses when it comes to time spent and engagement.
- Button enables publishers to scale their transactional revenue streams across an entire universe of disparate brands. Otherwise, these mobile development teams would have to do one-off integrations and business development deals with specific merchants, and wouldn’t reach the same scale or drive as much revenue.
- Publishers typically make more money using Button creative than they do a standard mobile ad unit.
Similarly, we spoke with merchants and were excited to learn:
- In multiple cases Button provided the most efficient traffic acquisition source — often 5x cheaper.
- Button’s inventory was the most-engaged traffic in mobile.
- Button’s distribution expanded merchant’s own acquisition channels and helped them launch and strike partnerships faster.
- Finally, Button led to increased bookings because it reduced the friction between search / discovery and transaction.
An All-Star Team with a Bold Vision
Throughout our diligence another consistent trend emerged — Button CEO, Mike Jaconi, and his team’s understanding of the “performance marketing space like no one else’s”.
I first met Mike when he was a young political staffer hustling around Washington, D.C. Then, as now, I was immediately attracted to his larger-than-life personality. Mike has this gravitational effect on people — he literally sucks them in. When Mike and I reconnected, I quickly realized he hasn’t lost this gravitational force. In fact, over the past 20 years, he’s finely developed this skill to motivate and turn those around him into advocates for his efforts, and he for theirs. I’ve confirmed that I’m not the only one allured by his charm. I heard it in his partners. I’ve heard it from his former colleagues, and I see it in his team.
All of this highlights our enthusiasm for what Button is today. However, it only touches the long-term vision for what we believe Button will do tomorrow — A Transaction Marketplace.
Button sits as the enabler between the publisher and the merchant partner. This allows Button to create a marketplace, connecting one with the other — the $100 billion opportunity. Think of it this way; In 2015, Google’s annual report showcased that Google Network members, which includes DoubleClick and AdSense inventory to be 22 percent of its overall revenue, or $15 billion dollars. This is the same inventory that Button could ultimately be alongside.
Let’s consider a potential real-life example. When an Ibotta user searches to unlock cash back on groceries, Button searches across its entire index of inventory to find the requested merchandise. In this instance, Button recognizes that Jet offers the desired good. Button also realizes this particular user has never used Jet before. Therefore, this user is particularly valuable to Jet, and Jet is willing to pay considerably more for this new user . Now, Button has created a marketplace that allows merchants to determine how much they’re willing to pay for a particular user, while still getting users the products they most want.
It’s a great honor to be able to finally call Mike my partner, and I’m very excited to welcome him and Button to the Norwest family.