Monetizing Mobile Apps

MONETIZING MOBILE APPS Dave Stevenson @dnstevenson

I SELL APPS(only iOS and Mac)

10 WAYS FOR YOU TO MAKE MONEY WITH APPS1. Paid2. Advertising3. In-App Purchases4. Webapp Subscriptions5. Subscriptions6. Sponsorships/Promotions7. Lead Gen8. Afﬁliate Sales9. Analytics10. Super-Secret Way

#1 - PAID• Simple: You set your price, people buy• Apple keeps 30%• Don’t forget about ongoing costs: support, hosting, etc• Customer for Life - People Expect Free Upgrades• Higher Price != More Money Day One

#2 - ADVERTISING• Typical with Free Apps• Is Your AppUsed One-Time or Does it Have a Long Lifespan?• Needa lot of downloads to make any sizable money• Expectpennies per day for each 100 downloads per day Airplane Quiz

Verbs & Jamie’s Recipes#3 - IN-APP PURCHASES

#3 - IN-APP PURCHASES• Lots of Flexibility • Free + In-App (“freemium”) • Paid + In-App• Different In-App Purchase Types: • Tokens (consumable) - think Games • Upgrades (non-consumable) - Free-to- Pro Upgrades, Additional Levels/Content• Expect 1-5% conversion rate • If 100 people download app, 1-5 people will make in-app purchase Tattoo You

#4 - WEBAPPS• UsersPay for Services through Webapp• Distribute Your Mobile App for Free • Reach More Customers• Requires Double Work: Mobile App + Webapp Evernote

#5 - SUBSCRIPTIONS• In Order to Get New Content, User Must Subscribe• Typically Magazines• Not Widely Seen Yet• 1-5% conversion Kids-In-Mind

#6 - SPONSORSHIPS / PROMOTIONS• “Brought to you by XXXX”• Like Advertising- Companies Pay You to Feature their Product or Service Twitter

#7 - LEAD GEN• Companies Pay You to Get them Sales Leads• High Trust is Required• Sometimes viewed as “slimey”• Super Low Conversions • Volume, Volume, Volume Zillow

Chomp & iRecommend #8 - AFFILIATE SALESEarn a % on Purchases User Makes Through Your App Low Margins - 5% on 0.99 = 4 cents

#9 - ANALYTICS• Peoplewill pay for anonymous analytics data from your app• Not Against Apple’s Standard TOS to collect SimpleNexus

#10 - DON’T• Not All Apps Need to Make Money • Banks, Marketing, etc• You Can Still Make Money • Build Them for People • Invest in Them • Work for Them Chase

REVIEW: 10 WAYS TO MONETIZE YOUR APPS1. Paid2. Advertising3. In-App Purchases4. Webapp Subscriptions5. Subscriptions6. Sponsorships/Promotions7. Lead Gen8. Afﬁliate Sales9. Analytics10. Don’t

MONETIZING CONSIDERATIONS• User Expectations• Your Costs• Market• Do Some Math

USER EXPECTATIONS• There is a race to the bottom - $1 is almost too much for some users• Monetize and Price According to Category Expectations • Simple Games = Free + In-App Purchases or Paid • Niche Apps = Paid w/ Higher Price? • News App = Advertising

YOUR COSTS• One Purchase == Customer for Life• Lifetime-Value of Customer == 0.70 ?• Support, Infrastructure (Hosting, Bandwidth), APIs, Partners • Instagram’s Monthly Hosting Bill: 2 nice cars each month!

MARKET• How Many People are in Your Target Market?• Now, How Many of those People Have iPhones?• Next, How Many of those People with iPhones will Purchase Your App?• Rule of 1% • 1.5m gardeners, 15k w/ iPhones, 150 will buy my app • Luckily, there’s more than 1.5m gardeners :)

DO SOME MATH• 100 apps downloaded each day at $0.99 = $70 or $2,100 per month• $2,100 per month is $25,200 per year (just above poverty)• Thinkingof Doing Adwords? $0.25 per click + 25% conversion rate = cost $1.00 to make $0.70 • Even worse with realistic 1-3% conversion rate

PARTING THOUGHTS• Each Monetization Strategy May Have Different Business & Marketing Strategies• Monetization Strategies Can Be Combined Together• Paid and Advertising are Easy to Dip Into • Just remember to watch your costs• Freemium will be the most interesting space to watch

GOOD LUCK!

THANKS!• web: http://www.stevensonsoftware.com• email: dave@stevensonsoftware.com• twitter: @dnstevenson

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Monetizing Mobile Apps

by Dave Stevenson on Jan 20, 2012

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Monetizing Mobile Apps — Presentation Transcript