LOS ANGELES — The 2016 XBIZ Show swung into full gear Wednesday, as the adult entertainment industry’s top insiders and operators gathered in Hollywood to share ideas and information for profiting from the digital economy into the new year and beyond.
A case in point is a trio of NETbilling-sponsored seminars exploring the latest in mobile technology, traffic acquisition and monetization, and the continued expansion of the live cam market.
Presented by Epoch, the 2016 XBIZ Show runs from Jan. 12-15, at the Andaz Hotel, delivering four days of unparalleled business insights, networking and deal-making opportunities, set against the energetic backdrop of the Hollywood Hills.
Known for its tradition of educational excellence, the XBIZ Show offers a full schedule of informative sessions presented by leading industry experts, including the following highlights from its presentations on Wednesday, January 13.
First up from 1-1:50 p.m., XBIZ tackled “Mobile Revolution: Marketing & Monetization,” with a panel of experts including Affil4You’s Joey Gabra, Broker Babe’s Stefan Muehlbauer, Jen McEwen from MiKandi, Andy Wullmer of Sex Goes Mobile, and Lernmond Khodaverdy of Twistbox, with Nancy Roberts of Glispa serving as the session’s moderator.
Gabra started things off by noting that many cam companies are seeing growth from adding mobile billing options, even though it can take longer to convert these users. Khodaverdy also sees the value in mobile cams, but told the audience that cam companies face challenges over their ability to display live content based on local regulatory structures, where even bikini shots may be prohibited, saying that “there’s a lot of fragmentation in reaching different countries.”
Wullmer pointed to the vibrant dating arena, where mobile users on Wi-Fi connections are profitable, as are a growing range of casual dating apps. He says that Africa is rapidly embracing “click to call” mobile offers, and continues to believe that “mobile is still the biggest growth market for adult,” and that if you have an app that goes viral, you will make a lot of money.
Roberts explained that although the mobile web is bigger than the app market, the latter has its serious advantages, with studies showing that 65 percent of mobile users’ time is spent in-app.
Muehlbauer stated that the quality of app traffic is superior to that of the mobile web, but that is a broad statement covering many types of offers, adult and mainstream alike, with the app ecosystem not being the most adult-friendly channel.
“That’s not your audience,” Khodaverdy says. “Sales are coming from the mobile web.”
That is not to say that adult apps are not profitable, with McEwen reporting strong growth in adult games and visual novellas, even as she seemingly discounts any particular offer in favor of other factors.
“In the past year we’ve gone to HTML5 to serve non-Android customers,” McEwen says, noting that the ease of purchase is a vital factor, with MiKandi requiring a “Tap, Tap, Fap” billing process where the user is no more than two taps away from a purchase and the content they desire.
McEwen also discussed the importance of content-based mobile advertising, citing the example of the company’s groundbreaking Google Glass apps and video produced in conjunction with XBIZ that went viral and generated more than 6 million views, and tons of mainstream press — all for around $2,000, including the $1,500 spent on the Google Glass device.
“Content gives you the chance to win the customer’s love before presenting your offer,” McEwen says, adding, “It’s hard to fall in love with a banner.”
If there was one revealing moment about mainstream’s disdain for all things adult and the impossible hurdles to overcome if carrier billing and other robust payment solutions were to come to the U.S. mobile market, it came from Muehlbauer, who told the tale of a visit to a mainstream mobile event where Samsung was pushing its new payment platform. Muehlbauer approached the team and after handing them his business card, began to inquire about the service. A few moments later, the Samsung staffers who had been busy looking him up based on his business card info returned, handed his card back to him (with two hands), and stated that they wanted nothing to do with “his kind.”
No, carrier billing and other beneficial platforms won’t be available to adult mobile merchants, further complicating the domestic mobile monetization scene for years to come.
The learning continued from 2-2:250 p.m., as attendees explored the traffic scene today, with a discussion of “Traffic Trends: Networks, Search & Beyond.” This session featured AdCirc’s Eric Helsel guiding an all-star ensemble of online advertising executives, including Sara Mallie of EroAdvertising, Alex Lecomte from Juicy Ads, Jake from TrafficHaus, and Rémi St-Maur of Traffic Stars.
This session continued the previous seminar’s mobile-centric discussion by tackling the traffic aspects of serving consumers on the go, with Lecomte revealing that Juicy Ads is seeing around 40 percent of its overall network traffic coming from mobile devices — with regional spikes such as in Latin America, where mobile access makes up the bulk of the traffic. Mallie reported similar stats for EroAdvertising, as did Jake for TrafficHaus.
For his part, St-Maur revealed that Traffic Stars’ exclusive access to the popular xHamster site delivers around 55 percent mobile traffic, with mobile visitors having superseded desktop traffic earlier this year.
For these figures, tablets, which are an increasingly important access platform, count as desktop rather than mobile traffic.
St-Maur says that finding the right traffic strategy depends on the product you are trying to sell, citing examples such as the popularity of marketing dating on desktops via banners, while using pop-under ads for cams. On mobile devices, he suggests using banners and notes that dating and gaming are strong for these users.
One of the best tips revealed in the session came from Jake, who underscored the importance of working with a good account manager, because they have the in-depth knowledge to help you succeed.
Mallie echoed the sentiment and likened the current market to “The Wild, Wild West,” stating that “we all push mobile, but that doesn’t make it easy,” and citing factors such as the different traffic funnels that are needed in the mobile space.
As for why the group placed so much emphasis on mobile traffic, Helsel cites Google’s claim that mobile is growing by five percent year over year, sustaining nine to 12 percent growth in some countries, so developing products for this market is very attractive. These localized sweet spots are also why it is so important to separate visitors by their geographic location, as well as the type of access they have, such as carrier or Wi-Fi — with different billing, offers and marketing for each.
“Marketing is common sense,” Lecomte says, “and there is always a solution.”
One of those solutions is to make use of “like” channels, with Jake advising that if you have a dating site and want more visitors, to buy cam site members’ area traffic. Likewise, cam site operators may find dating site members’ area traffic to be quite lucrative.
It seems deceptively simple, and it is, with Helsel telling attendees that they should understand concepts such as conversion tunnels and sales cycles as they apply to your site before purchasing traffic. Lecomte agreed, underscoring the need to know how to deliver your offer and if it is actually wanted, before any large ad buys occur.
Jake says it takes access to granular data to understand customers, with Mallie relying on the growing use of Big Data to provide insights such as “my users are buying at 11 p.m. on Fridays,” and that dating traffic performs better than tube traffic on select offers.
Of course, thorough testing is vital, with marketers needing to base their decisions on a customer’s overall lifetime value, which can currently justify a cost-per-acquisition (CPA) of $40-$60 each.
As for how much and how long to budget ad buys for, St-Maur prefers a 10-day test because it captures two weekends, and says its best to start on the first of the month when folks have gotten their pay, and to keep a daily bid budget in mind.
Helsel liked that approach and added that a smaller but decent data set could be obtained by trying Thursday, Friday and Saturday nights from 8-10 p.m.; while Lecomte revealed that his personal favorite strategy was a $3,000 initial ad test, as it is enough to yield actionable data. He also notes that while many advertisers prefer cost-per-click (CPC) buys rather than cost-per-thousand impressions (CPM), CPC isn’t always the best bet, because an effective ad may be clicked many times by people with no interest in the product being offered, saying that “clicks on a good ad do not equal sales.”
Clearly, traffic remains a complicated arena, bringing us back to the importance of working with expert account managers to make the most of your advertising efforts.
Later on, from 3-3:50 p.m., changes in the live cam industry came under the spotlight as a distinguished panel of webcam experts explores “Live Cams: The Future of Interactivity.” Moderated by Anthony from LALExpo, this info-packed session featured Valentin of AWE / LiveJasmin, Kristell Perez of Cams.com, Douglas Richter of CamsPower, Chaturbate’s Shirley Lara, Jeff Wilson from Flirt4Free, Eric Wexel of FreeWebcams.com, plus Shay Efron from PussyCash, and Streamate’s Yuval Kijel.
Anthony kicked the session off by characterizing today’s cam scene as “porn for the one percent,” with the devotees of live interactive adult entertainment being a more affluent crowd that doesn’t always see cams as porn, but as a vehicle for relationships and more — and is willing to pay for the privilege.
Efron underscored this perception by explaining, “Cams are a psychological service, not a sexual one.”
In addition to their emotional appeal, cams are highly dependent on technology to deliver a satisfying user experience, as time honored tools coexist with the latest in haptics and immersive technologies — as well as a growing appeal to the mobile market.
Kijel said that Streamate is strong on monetizing white labels and one-click cams fed by the biggest sites, and noted that the company is seeing its biggest growth in Android users. He adds, however, that many users start on a mobile device, viewing available models and activating accounts, but tend to switch over to a desktop PC for viewing actual cam shows.
Perez is excited about the future of virtual reality and live cams, which she says is coming soon, but that it will be expensive. This is a widespread belief within the adult industry, but some panelists are not so sure about when (or if) it will happen.
Kijel says that VR cam technology has a long way to go, and that bandwidth is a major limiter, with many consumers not having fast enough Internet connections to deliver a satisfying user experience. He also noted that a large-scale marketplace where thousands of models are streaming VR to millions of users, could be decades away — with dissenting panelists optimistically pegging it closer to the five-year mark.
Other technology is here today, only requiring a little innovation to execute, such as the crowd-sourced add on scripts and widgets that Lara says allows Chaturbate’s models to provide a totally customizable experience for their customers, leading to better sales. Richter finds this freedom beneficial as well, advising attendees to give their models more control over their chat rooms, including the ability to set flexible rates and offer different ways to sell their services.
Wexel says that at the end of the day, it’s not about technology, it’s about the user experience; opening the door to a discussion of business models and marketing approaches. Efron agreed, explaining that there is a place for everyone in the cam ecosystem.
“The guy looking for a free room with 3,000 other fans in it,” Efron said, “is not the same as the one who wants a premium, private experience.”
Wilson noted that tip-based services are different from the private show sites, but they are compatible from a marketing standpoint. He also believes that the cam market will continue to fragment. Lara also offered insights into the market mix by noting that some models don’t like to do private shows and tend to focus exclusively on group shows.
Regardless of the business model being employed, many in the cam community focus their efforts on acquiring “whales” — those big spending high rollers that buy frequent, long lasting private shows, or tip most generously on free shows.
Wilson says that a lot of money is made on whales spending more than $100,000 per month on cams, revealing “what matters most is connecting with the right customers.” Richter was quick to confide that while catching whales is great, they are few and far between; telling the audience “don’t underestimate the value of smaller users, because the margins are better on smaller packages [of minutes].”
Getting traffic to cam sites was also a popular topic at this session, with Efron highlighting the importance of understanding the nature of your traffic and of working with or as an affiliate or media buyer hoping to profit from cams.
“Match your traffic to the product a cam company offers,” Efron says. “Check for mobile compatibility [and] check the number of models that are live on the site. Communication and promo tools are also important.”
It is also important to match different consumer types with the appropriate offer, depending on the cam sites you promote, with Lara saying that “free sites should send traffic to free cam sites, paysites should send traffic to paid services.”
Perez noted that revenue sharing is more profitable than pay-per-signup (PPS) plans for affiliates that can land whales, while Wexel explained that traffic buys can be monetized with hybrid business models that provide quick cash to cover ad campaigns, while still providing long-term profits.
The major takeaway from these three dynamic sessions was that mobile rules everything today, traffic is something you buy and study, and that cams are what consumers want. Combine mobile cams with the predictable revenue streams available to savvy media buyers, and you have 2016’s secret to success.
The 2016 XBIZ Show isn’t just about sitting in a classroom all day, however, with numerous networking get-togethers, parties, social events, and capping it all off, the star-studded, red-carpet gala, 2016 XBIZ Awards Show, which honors adult entertainment’s top producers, performers and service providers.
Presented by LiveJasmin and hosted by adult superstar Stoya, the 2016 XBIZ Awards takes place Jan. 15 at the J.W. Marriott at L.A. Live in Los Angeles, crowning the XBIZ Show.
For a full schedule of events, click here.
For more information, visit XBIZShow.com.