Top Mobile App Monetization Tactics You Ought to Know

Top app monetization tactics… Pratik Shah | Product Manager

A bitaboutMyself..

What do these entities have inc o m m o n ?

“The deeper the understanding “We are an analytics company we have about our customers masquerading as a gamesand our products, the better we company” can connect with them.” Data. Insights. Actions. Oakland A’s manager Billy Citibank is exploring possible Beane based his winning uses for IBM’s Watson strategy on rigorous data supercomputer in mining analysis to acquire top baseball customer data. players.

This is all great…..How the heck is this relevant for an app developer?

700K iOS & Android apps 60% app developers don’t profit 30% apps used only once It’s a tough world out there.. Only the intelligent app businesses will win!

Agenda: Improve App monetization by focusing on your usersBest practices‣  Monetization models‣  Key metrics & ARM cycleCustomer segmentation‣  Why‣  HowUse cases‣  Acquisition‣  Retention‣  Monetization

BestPractices

Monetization: Variety of monetization models Consumer Advertiser pays pays Paid downloads, Banner, in-app purchases, interstitial, cross merchandizing, promote, offer subscription.. walls..

Embrace the power of Freemium modelThe best part? Not limited to gaming apps..

Metric driven? Don’t get lost in vanity metrics… Did you catch the funny ones?

Keep it simple: Focus on value maximization during ‘ARM’ cycle Basics ‣  App value = Number of users * LTV of each user Acquisition Retention LTV of each user ‣  Lifetime value ‣  LTV = value * engagement USERS Value levers ‣  Monetization ‣  Virality ‣  Loyalty Monetization ‣  UGC & Community ‣  Feedback ‣  Marketplace (Downloads, Ratings & Comments) In order to focus on monetization, it is important to look beyond monetization..

AudienceTrack key ‣  Daily Active Users (DAU) & Monthly Active Users (MAU) ‣  Demographymetrics in Acquisition ‣  Cost per acquisition (CPA)the ‘ARM’ ‣  ROI on campaigns (Value - CPA) Retentioncycle ‣  Stickyness (DAU/MAU) ‣  Retention rate Monetization ‣  Conversion rate ‣  ARPU & ARPPU

Customersegmentation

Lets borrow an industry best practice.. Loyal 31% Newly 24% acquired ‣  Customer segmentation - a practice Dormant 18% of: ‣  Dividing a customer base into buckets that are Engaged similar in specific ways (spending, engagement 16% etc.) ‣  On which they can take targeted actions to Socially 16% extract the maximum marketing value. active Advanced 13% ‣  Traditionally, retail marketers have used segmentation as an important Whales10% technique ‣  In order to maximize the value levers, app developers need to adopt the same sophisticated techniques.

Customer segmentation: How does it work? Basics ‣  Use a rule engine to define user behavior & attributes to define a segment Dimensions ‣  Purchase history ‣  Time spent ‣  Session length ‣  Advancement ‣  Session frequency ‣  Country, Carrier, Device ‣  …. Examples ‣  S1: IF purchase history > 25 percentile of my app ‣  S2: IF purchase history > $10 ‣  S3: IF purchase history > $10 & Time spent < 5 minutes in last month Need to track key metrics with the prism of each segment

Use cases

Lets put it to use in the ‘ARM’ cycle? Acquisition Retention USERS Monetization

Acquisition: Leverage organic techniques Basics ‣  Expensive to pay to acquire users unless you have a well oiled positive ROI engine (LTV > CPA) Measurement ‣  Cost per acquisition (CPA) ‣  ROI on campaigns (LTV/CPA) Techniques ‣  Internal cross promote (Keeping users within your app portfolio) is the best but needs to be done properly.. ‣  Viral is very cost effective, but also very difficult ‣  Performance networks (display, cross promote) are widely used to acquire further users

Identify pattern:Highly engaged users from USA aremost likely to give you viral upliftSegment using rule engine:IF (time spent > 300 hours) &(country == USA)Incentivize viralitySegment: Social influencersReduce your CPA by as much as 50%

Identify pattern:Advanced users in your top appdon’t have other apps in yourportfolioSegment using rule engine:IF (levels crossed > 25) & (! Usingomegajump)Smart cross promoteSegment: ‘ripe’ usersIncrease ROI by acquiring known users

Retention: Use a variety of techniques at different user stages Basics ‣  Difficult.. but certainly most important Measurement ‣  Stickyness (DAU/MAU) ‣  Retention rate (% of returning users across months) ‣  Cohort analysis ‣  Measure how many users return for 2nd time, 3rd time and so on… Techniques ‣  Clean early experience* Playnomics Q3 2012 report ‣  Localize content ‣  Gamification: Rewards, challenges etc…

Identify pattern:New users are likely to be delightedto see a tailored messageSegment using rule engine:IF (App launches < 5) & (country ==China)Localized ‘welcome’Target segment: New Chinese usersIncrease retention beyond day 1

Identify pattern:User engagement can be improvedwith a social tauntSegment using rule engine:IF (user time spent in last month <50% of average time spent)Social ‘taunt’Target segment: Waning usersIncrease engagement by 30%

Monetization: Use tiered pricing Basics ‣  Price goods along the curve based on capacity of each customer Measurement ‣  Conversion rate (% paying) ‣  ARPU & ARPPU ‣  Customer profile split ‣  Whales (10% users, 60% revenue) ‣  Dolphins (30% users, 30% revenue) ‣  Minnows (60% users, 10% revenue) Techniques ‣  Holiday & event specific ‣  Timely offers

Identify pattern:Hardcore users would pay a lot forcertain featuresSegment using rule engine:IF (user time spent == high) & (appsection == ‘tough’)Timely unlocksTarget segment: Hardcore users Display offers at right time

Identify pattern:High paying users in developedeconomies tend to purchase a lotduring holidaysSegment using rule engine:IF (user purchase history == high) &(date == 31st Oct) & (country ==USA || UK)Holiday promotionTarget segment: High paying US andUK usersAdd cyclic bursts to your sales

‣  Step 1: Deciding what data will be collected and how it will beHow does a ‣  gathered Step 2: Collecting data fromdeveloper ‣  various sources Step 3: Developing methods ofdo all of big data analysis for segmentation ‣  Step 4: Building in-housethis? message server - scaled globally! ….Could this all be easier?

Thank you Pratik Shah Product Manager, InMobi Pratik.shah@inmobi.com

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Top Mobile App Monetization Tactics You Ought to Know

by InMobi on Nov 14, 2012

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