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MONETIZE   YOUR APP                        by Hristo Neychevfacebook.com/HNeychev     linkedin.com/in/HristoNeychev   twit...
So, you have created this             amazing, useful app and now you             want to make some money with            ...
What is your favorite cocktail?facebook.com/HNeychev   linkedin.com/in/HristoNeychev   twitter: @HristoNeychev
My favorite   cocktail   SEX   ON THE BEACHfacebook.com/HNeychev   linkedin.com/in/HristoNeychev   twitter: @HristoNeychev
Now…let’s talk   about   SEXY PROFIT   ON THE BEACHfacebook.com/HNeychev   linkedin.com/in/HristoNeychev   twitter: @Hrist...
SEXY PROFIT                                         ON THE BEACH              30% analysis              20% forecasting   ...
Build it and they will come!facebook.com/HNeychev   linkedin.com/in/HristoNeychev   twitter: @HristoNeychev
Profit = Revenue – Costfacebook.com/HNeychev      linkedin.com/in/HristoNeychev   twitter: @HristoNeychev
PROFITABILITY ESTIMATION                                                                                            Total ...
Total Number                                                                    of Users                                  ...
Infrastructure                                           Hosting      Bandwidth     Storage                         Cost  ...
POTENTIAL REVENUE SOURCES   •   Pay-per-download                         •   Sponsorships   •   In-app advertising        ...
PAID APPREVENUE SOURCES
PAID APP                                             Prices from $0.99 up to $999.99                                     ...
PAID APP                                             Prices from $0.99 up to $999.99                                     ...
PAID APP                                             Prices from $0.99 up to $999.99                                     ...
PAID APP                                             Prices from $0.99 up to $999.99                                     ...
THE 300 MOST POPULAR          PAID GAMES                                           PAID APP   $2.50                       ...
PAID APP                                             Prices from $0.99 up to $999.99         PEOPLE                      ...
PAID APP                                             Prices from $0.99 up to $999.99                                     ...
FREEMIUMREVENUE SOURCES
FREE(mium) APP                                             Freemium vs. Free Trial                                       ...
FREE(mium) APP                                             Freemium vs. Free Trial                                       ...
FREE(mium) APP • Conversion rates are in the range   0.5% to 4%                                 Freemium vs. Free Trial •...
EXAMPLE:    MC = $1                                   FREE(mium) APP    ARPU = $5    CR = 1%                              ...
FREE(mium) APP                                             Freemium vs. Free Trial                                       ...
LIMITATIONS BASED ON:                           FREE(mium) APP •   Features     •   Usage quota •   Capacity     •   Numbe...
IN-APPADVERTISINGREVENUE SOURCES
IN-APP ADVERTISING                                             Need an app used multiple times a                         ...
IN-APPPURCHASESREVENUE SOURCES
IN-APP PURCHASES                   PAID                                                 Several options                  ...
IN-APP PURCHASES                                             Several options                                            ...
IN-APP PURCHASES                                             Several options                                            ...
REVENUE          POTENTIAL                         IN-APP PURCHASES 9       Advertising 8       Revenue          23%      ...
FIRST IN-APP                               IN-APP PURCHASES[CATEG           PURCHASE  ORY NAME]             ,0            ...
AFFILIATEDWEB-APPREVENUE SOURCES
AFFILIATED WEB-APP                                             Good for content based apps                               ...
AFFILIATED WEB-APP                                             Good for content based apps                               ...
5 Common Mobile                                AFFILIATED WEB-APP     Search Behaviors 1. Fewer keywords                  ...
SUBSCRIPTIONSREVENUE SOURCES
SUBSCRIPTIONS                                             Good for content based apps                                    ...
SUBSCRIPTIONS                                             Good for content based apps                                    ...
SUBSCRIPTION       BASED GAMES                                             SUBSCRIPTIONS                                  ...
SUBSCRIPTIONS                                             Good for content based apps                                    ...
IDEAS:                             SUBSCRIPTIONS   •   Annual subscription   •   Monthly subscription   •   Automated recu...
CHOSE THE RIGHT MONETIZING STRATEGY   •   Simple Games = Free/Freemium + In-App Purchases   •   Complex Games = Paid/Freem...
NEXT STEPS   1.       Choose your monetizing strategy   2.       Build your Revenue and Cost forecasting models        •  ...
And last, but not the least…                                        …have FUN on the beach!facebook.com/HNeychev   linkedi...
Thank you!       facebook.com/HNeychevlinkedin.com/in/HristoNeychev       twitter: @HristoNeychev
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  1. 1. MONETIZE YOUR APP by Hristo Neychevfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  2. 2. So, you have created this amazing, useful app and now you want to make some money with it!facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  3. 3. What is your favorite cocktail?facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  4. 4. My favorite cocktail SEX ON THE BEACHfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  5. 5. Now…let’s talk about SEXY PROFIT ON THE BEACHfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  6. 6. SEXY PROFIT ON THE BEACH 30% analysis 20% forecasting 40% marketing 10% financefacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  7. 7. Build it and they will come!facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  8. 8. Profit = Revenue – Costfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  9. 9. PROFITABILITY ESTIMATION Total New Number Paying of Users Number Conversio Paying Users n Rate (to Users Churn paid) Revenue Revenue Buy the App Average Revenue In-App per User Purchases (ARPU) Subscripti on Fees Profit Infrastruc ture Cost Hosting Bandwidt h Storage Cost Developm Staffing Support Marketing ent Cost SEO PPC Marketing Budget Social Media PRfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  10. 10. Total Number of Users New Paying Users Number Paying Conversion Users Rate (to paid) Churn Revenue Buy the App Average In-App Revenue per Purchases User (ARPU) Subscription Feesfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  11. 11. Infrastructure Hosting Bandwidth Storage Cost Staffing Support Marketing Development Cost SEO PPC Marketing Budget Social Media PRfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  12. 12. POTENTIAL REVENUE SOURCES • Pay-per-download • Sponsorships • In-app advertising • Promotions • In-app purchase • Lead generation • Affiliated web services • Analytics • Subscriptions • Affiliate salesfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  13. 13. PAID APPREVENUE SOURCES
  14. 14. PAID APP  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  15. 15. PAID APP  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  16. 16. PAID APP  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  17. 17. PAID APP  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down 30%  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  18. 18. THE 300 MOST POPULAR PAID GAMES PAID APP $2.50  Prices from $0.99 up to $999.99 $2.00  The Apple/Google store keeps 30%  Average price is going down $1.50  One time charge $1.00  Reduces adoption $0.50 $0.00 JUN 10 JAN 11 JUN 11facebook.com/HNeychev linkedin.com/in/HristoNeychev www.distimo.com twitter: @HristoNeychev
  19. 19. PAID APP  Prices from $0.99 up to $999.99 PEOPLE  The Apple/Google store keeps 30% EXPECT FREE  Average price is going down UPGRADES  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  20. 20. PAID APP  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  21. 21. FREEMIUMREVENUE SOURCES
  22. 22. FREE(mium) APP  Freemium vs. Free Trial  Freemium is a tricky game to play  Very low conversion rates  Beware of the marginal cost (MC)  Wider adoption = wider advertising  Set smart tripwiresfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  23. 23. FREE(mium) APP  Freemium vs. Free Trial  Freemium is a tricky game to play  Very low conversion rates  Beware of the marginal cost (MC)  Wider adoption = wider advertising  Set smart tripwiresfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  24. 24. FREE(mium) APP • Conversion rates are in the range 0.5% to 4%  Freemium vs. Free Trial • Look at Pandora, Dropbox,  Freemium is a tricky game to play Evernote, Skype, etc.  Very low conversion rates • Shoot for 1-2% conversion rate  Beware of the marginal cost (MC)  Wider adoption = wider advertising  Set smart tripwiresfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  25. 25. EXAMPLE: MC = $1 FREE(mium) APP ARPU = $5 CR = 1%  Freemium vs. Free Trial CALCULATION:  Freemium is a tricky game to play Freemium users: 1,000,000  Very low conversion rates Monthly Revenue == $500,000  Beware of the marginal cost (MC) (1,000,000 * 1% * $5)  Wider adoption = wider advertising Monthly Cost: $1,000,000  Set smart tripwires SEXY PROFIT => UGLY LOSS facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  26. 26. FREE(mium) APP  Freemium vs. Free Trial  Freemium is a tricky game to play  Very low conversion rates  Beware of the marginal cost (MC)  Wider adoption = wider advertising  Set smart tripwiresfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  27. 27. LIMITATIONS BASED ON: FREE(mium) APP • Features • Usage quota • Capacity • Number of seats  Freemium vs. Free Trial • Effort • Customer class • Support • Bandwidth features  Freemium is a tricky game to play  Very low conversion rates  Beware of the marginal cost (MC)  Wider adoption = wider advertising  Set smart tripwiresfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  28. 28. IN-APPADVERTISINGREVENUE SOURCES
  29. 29. IN-APP ADVERTISING  Need an app used multiple times a day by the same user to get more impressions  Need a lot of downloads to make any money  Woks well with low MC freemium appsfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  30. 30. IN-APPPURCHASESREVENUE SOURCES
  31. 31. IN-APP PURCHASES PAID  Several options  An example  The Apple/Google store keeps 30% In-App of each transition Purchases  Big revenue of potential FREE FREEMIUM  Multiple sessions lead to more purchasesfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  32. 32. IN-APP PURCHASES  Several options  An example  The Apple/Google store keeps 30% of each transition  Big revenue of potential  Multiple sessions lead to more purchasesfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  33. 33. IN-APP PURCHASES  Several options  An example  The Apple/Google store keeps 30% 30% of each transition  Big revenue of potential  Multiple sessions lead to more purchases AGAIN facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  34. 34. REVENUE POTENTIAL IN-APP PURCHASES 9 Advertising 8 Revenue 23%  Several options 7 IAP Revenue  An example 6  The Apple/Google store keeps 30% 5 18% of each transition 4  Big revenue of potential 3 77%  Multiple sessions lead to more 2 82% purchases 1 0 2011 2012Efacebook.com/HNeychev linkedin.com/in/HristoNeychev http://www.flurry.com twitter: @HristoNeychev
  35. 35. FIRST IN-APP IN-APP PURCHASES[CATEG PURCHASE ORY NAME] ,0  Several options [CATEG[VALUE] ORY NAME]  An example [VALUE] [CATEG  The Apple/Google store keeps 30% ORY of each transition NAME]  Big revenue of potential [VALUE]  Multiple sessions lead to more purchasesfacebook.com/HNeychev linkedin.com/in/HristoNeychev http://www.emarketer.com twitter: @HristoNeychev
  36. 36. AFFILIATEDWEB-APPREVENUE SOURCES
  37. 37. AFFILIATED WEB-APP  Good for content based apps  Make money on the service/content not on the app  Reach new customer audience  Reach new search behaviorfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  38. 38. AFFILIATED WEB-APP  Good for content based apps  Make money on the service/content not on the app  Reach new customer audience  Reach new search behaviorfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  39. 39. 5 Common Mobile AFFILIATED WEB-APP Search Behaviors 1. Fewer keywords  Good for content based apps 2. Location is key (GPS, Google places)  Make money on the service/content not on the app 3. Mobile experience  Reach new customer audience 4. Time (more frequent on evenings and weekends; the  Reach new search behavior opposite of desktop search behavior) 5. Apps vs. Browser searches 27% vs. 73% but growingfacebook.com/HNeychev linkedin.com/in/HristoNeychev http://www.spydertrap.com twitter: @HristoNeychev
  40. 40. SUBSCRIPTIONSREVENUE SOURCES
  41. 41. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenuefacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  42. 42. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenuefacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  43. 43. SUBSCRIPTION BASED GAMES SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenuefacebook.com/HNeychev linkedin.com/in/HristoNeychev http://www.insidemobileapps.com twitter: @HristoNeychev
  44. 44. SUBSCRIPTIONS  Good for content based apps (newspapers… SUBSCRIPTION  …magazines, and comics) CONVERSION  Not limited to those RATE  Low conversion rates 1-5%  Relatively reliable revenuefacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  45. 45. IDEAS: SUBSCRIPTIONS • Annual subscription • Monthly subscription • Automated recurring billing  Good for content based apps (newspapers… • Subscribe for a service/feature • Subscribe for support plan  …magazines, and comics) • Good/Better/Best account  Not limited to those options  Low conversion rates (1-5%)  Relatively reliable revenuefacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  46. 46. CHOSE THE RIGHT MONETIZING STRATEGY • Simple Games = Free/Freemium + In-App Purchases • Complex Games = Paid/Freemium + In-App Purchases • Niche Apps = Paid with a Higher Price + Good Service • News Apps = Free + Advertising • Content Apps = Free + Subscriptionfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  47. 47. NEXT STEPS 1. Choose your monetizing strategy 2. Build your Revenue and Cost forecasting models • (based on assumptions) 3. Challenge your assumptions • (research articles, studies, similar apps, marked data) 4. Finalize your forecast (World Domination Plan ) 5. Go Live 6. Use real live data to constantly improve your strategyfacebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  48. 48. And last, but not the least… …have FUN on the beach!facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
  49. 49. Thank you! facebook.com/HNeychevlinkedin.com/in/HristoNeychev twitter: @HristoNeychev
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