Push notifications in 2014

The next Tragedy of the Commons?

The Tragedy of the Commons is a theory in economics. It first arose in the early 19th century, when English villages created grass ‘Commons’ for use by all the villagers. This free grass led to all the villagers taking their sheep/cows/goats onto the land. Even as the common became overgrazed, the rational decision for each villager was still to eke out whatever grass remained. Rapidly this led to a bare patch of land, with everyone losing out, even though they had all made rational decisions along the way. Overfishing is the most obvious Tragedy of the Commons today

Bringing this back to my day job, what are the ‘Commons’ in tech, and how have they panned out?

To me, there are two ‘meta-commons’ in tech: users’ data, and users’ attention & time. The former will certainly be a huge issue in the coming decade, but is well covered by the likes of Jaron Lanier & Dave Eggers, and I will not go into it here. I will focus this post on the latter: users’ attention.

The first Commons for users’ attention was email. Back in the 90s buying email lists & cold emailing them actually worked. Traffic quickly went berserk, with people spending a lot of time deleting unsolicited mails. Then email clients introduced ever more sophisticated spam filters. This effectively killed email as an acquisition channel, pushing companies to paid marketing.

The second wave of email was opt-in, focused on retaining existing customers. This has had its ups & downs, and many people’s inboxes are out of control. It has not yet become a tragedy though, with many companies still getting great results from email marketing to opted in lists. It has become less of a Commons, as every company has to earn the right to get you to subscribe and keep you (now that it is easy to unsubscribe, or if not to mark as spam). Having said that, I am yet to see reliable data on the impact of Google’s segregation of the gmail inbox into Primary, Social & Promotions. This may be a tragedy yet to come…

The second Commons was SMS — which while not free is very low cost. This came to a head in the early 2000s, leading to regulatory clampdown in most countries — although it is still a big issue in some. The next major free way to get users’ attention was Facebook. Zynga is the perfect Greek tragedy of this.

In my view, the Commons for 2014 is push notifications (it might also be retargeting, but that is another post to come).

As a developer, what is there not to love about push notifications?

They are free, they get good response rates, they are in front of your user on their most personal device, and catch them when they have down time. At the moment it is very easy to opt in to push notifications, and slightly fiddly to opt out of them. Urbain Airship have some great data on their site on the impact of push notifications, showing an average 93% higher retention rate, and 26% higher engagement, for users opted in to push notifications. (Need to be careful on causality here, with opted in users being the ones who most like/fit your app, but still a marked difference).

As a result, the volume of push notifications is rising rapidly. Urban Airship alone had powered 20B as of May 2012, grew this to 100B by December 2013

So we have all the ingredients for a Tragedy of the Commons. A constant stream of intrusive, spammy notifications leads to angry users, who disable push notifications for every app except their flavour-of-the-month messaging service, or just tune them out. Also, don’t forget that push notifications are closed systems owned by Apple & Google. It would be very easy for them to start charging for push notifications, add additional friction in the opt-in process, or offer an ‘unsubscribe from all push’ button. I would put money on them doing something around this in the next 12 months.

This makes it vital for any app publisher to get a good push notification approach in place now. Now is the time to get your users opted in (and retain them) as it is only going to get harder.

Some best practices (would love input on this):

• Be Social. If you can credibly bring friends’ names into the push notification, do so. Quizup do this well, helping drive their impressive liquidity & traction
• Time-limited messages: “on sale today”; “free app of the day”. Hackneyed but they work
• Deep linking to specific relevant content in the app (e.g. specific stories on Ban.jo or the BBC news app)
• Personalised messages. You know a lot about your users, and yet you are sending a standard push notification to every one? Rap on the knuckles for that.
• Messages which spark curiosity. Clumsy Ninja is a good example of this in gaming, with messages such “Hey, this potion’s really odd. Come and see!” You do have to deliver on this promise, as Clumsy Ninja do with funny animations, otherwise it will stop working very fast.
• Frequency capping. There is some interesting data from Urban Airship (registration required) saying that frequency capping not as important for push notifications as it is for other channels. Still, intuitively it has to be something to watch carefully
• A-B testing

While many companies manage this internally, there are a few companies out there helping with push message delivery, targeting & analytics. Urban Airship were the first big mover in the space, and having raised $46M they dominate coverage. A couple of European players in the space are Capptain & Appsfire. There is a good discussion of alternatives here on Quora . I also expect the email targeting plays such as Sailthru & Idio to spend more time in this area in the coming months/years.

In an ideal world push notifications would fit into a single Customer Experience Management platform, covering push, email, website, retargetting etc, with a single database for targetting (powered by Qubit, perhaps). For the moment this is an aspiration, but it is what I would be aiming for.

This is an area I am very interested in but still at early stages of understanding. Would love any advice or leads for best practice, particularly in Europe, which I coudl include in a future post.

Disclosure: My VC, Balderton Capital, is an investor in Qubit, Ban.jo & Natural Motion (Clumsy Ninja’s developer).