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Monetization Still A Mystery
 

Monetization Still A Mystery

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Frankly monetization is still a mystery for a lot of developers and entrepreneurs. Obviously having a monetization model that helps in sustaining an app over time and generate a steady stream of ...

Frankly monetization is still a mystery for a lot of developers and entrepreneurs. Obviously having a monetization model that helps in sustaining an app over time and generate a steady stream of revenue is highly desirable by everyone. In this session we will go through various monetization models that have been used successfully by a variety of apps (mobile, gaming,device, social, ecommerce, etc.), with some example of how some apps/start-ups have evolved their monetization strategy over time and some tips on where to start.

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  • Every developer and entrepreneur follows the principle
  • But unfortunately it’s still a mystery on how to monetize or build a continuous revenue stream to help you understand here are a few monetization models that I am sure would help most of the use cases
  • According to wikipedia “Monetization is the process of converting or establishing something into legal tender”
  • Really falls into 2 categories – while indirect has been popular not many actually make any money out of it. Having a direct monetization model helps you in building a continuous revenue stream that not only help in sustaining your app for long time but also might make you rich Causium: http://www.forbes.com/2010/09/07/atlassian-software-facebook-technology-freemium.html?partner=yahootix
  • CPM means cost per thousand impressions and refers to the amount you are paid for showing 1000 ads.A cost per click (CPC) ad pays you a certain amount—typically between a nickel and fifty cents—each time a user clicks on an ad. As with a CPM ad, you may only be paid for the first unique click from a particular user, and your ad agency may take a percentage.CPA (cost per action) ads require more of a commitment from the user. You are paid each time a user completes a particular action—for example, completing a survey, signing up for a subscription, or buying a product.Which ads you choose to run depends on your audience, and you'll need to spend some time experimenting to determine what works best for you. In general, you should run as many CPM ads as possible—assuming they are not priced too low to bother—and experiment with CPC and CPA ads to fill the remaining ad inventory.
  • An affiliate program is one in which you earn a commission for items sold through your site. Normally, you put a badge or text link or some other advertisement on your web site. When visitors to your site or blog click through the ad to the site and make a purchase, you receive some of the money from that purchase. This can be either a percentage of the sale, or a flat fee for each sale made. Most affiliate programs, though, offer a percentage of the sale.
  • Virtual goods are non-physical or digital items used in online communities or online games. Virtual goods have become popular recently with the rise of social games, which are played by more than 200 million people each month on Facebook and other social networking sites. Popular titles include Farmville, Bejeweled Blitz and Happy Aquarium. Virtual currency is payment used within social games and applications, usually for upgraded features. The most common is Facebook Credits, which are accepted at hundreds of popular Facebook games and applications, including Farmville, Bejeweled Blitz and Pet Society.
  • but we know it can and will be done – there are a lot of good examples – Netflix, Amazon web services, Zynga, playspan, SocialGold, etc.
  • A very important result of this is that a developer has to learn, code and deploy different integrations with each and everyone separately. It’s just painful.
  • if you want to chat more about monetizing your apps or if you want to find more about what PayPal provides.

Monetization Still A Mystery Monetization Still A Mystery Presentation Transcript

  • App Monetization, still a mystery ?Praveen Alavilli@ppalavilli
    1
  • “chase your dream, money will follow”
    2
  • Still a mystery !
    3
  • History of Monetization at YouTube
    2  Billion views a day
    3rd most visited website
    Localized in 23 countries across 24 different languages
    15 The average number of minutes people spend on the site each day
    24  Hours of video uploaded to YouTube every minute
    45 Million home page impressions in the U.S. every day.
    70% of YouTube traffic comes from outside the U.S.
    100  Years of video scanned by copyright management technology every day
    1700  Years it would take you to watch the hundreds of millions of videos on YouTube
    Founded in February 2005
    Aug 2006 - First advertising concepts launched: Participatory Video Ads (PVA) and Brand Channels
    Sep 2006 - Underground music contest with first major advertiser: Cingular
    Aug 2007 - InVideo Ads (overlays) launched
    Dec 2007 - YouTube Partner Program launched
    Mar 2008 - YouTube Insight (analytics tool) launched
    Oct 2008 - Click-To-Buy e-commerce platform launched
    Nov 2008 - Promoted Videos launch
    Nov 2008 - Pre-Roll ads launch
    Jan 2009 - Homepage ads expanded from 1 to 7 formats (IMAGE: Homepage ad grab)
    Aug 2009 - Individual Video Partnerships launch
    Nov 2009 - Skippable pre-rolls test
    Dec 2009 - Video Targeting launch
    Mar2010 - YouTube mobile ads launched
    Source: https://sites.google.com/a/pressatgoogle.com/youtube5year/
    4
  • What is monetization ?
    5
  • 6
  • Indirect Monetization
    7
  • Advertizing
    Banner ads, intrusive ads, contextual ads, target ads, interstitial ads, text ads,…
    Cost Per Impression (CPM)
    Cost Per Click (CPC)
    Cost Per Action (CPA)
    • Cost Per Lead
    • Cost Per Sale
    • ad network commissions
    • Relies on Unique impressions
    • Consumers do not
    • trust advertizing
    • want to view advertizing
    • need advertizing
    • High supply – low demand
    http://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/
    8
  • Offers
    Online, Local, Shopping rewards, Surveys, in-game, etc.
    It’s really CPA/CPL/CPC
    Customized/personalized offers
    Usually brings in wide range of popular partners
    • commissions
    • Relies on popular partner offers
    • Consumers do not
    • trust advertizing
    • want to view advertizing
    • need advertizing
    • want to stop what they are doing
    9
  • Referrals
    Affiliates, bounties, recommendations, etc.
    CPA & CPS
    Deals aggregation
    • Fees vary based on item/merchant & volume
    • Needs credibility
    • Not reselling
    10
  • Direct Monetization
    11
  • e/m-commerce
    Selling of goods and services
    Oldest of all (since 1970s)
    Reseller platforms
    Marketplaces
    Social commerce
    Merchandise in social apps and games
    P2P
    Better returns/commissions
    Have to deal with shipping, returns, etc.
    Merchant on-boarding
    12
  • Freemium
    Free + Premium
    Popular monetization model
    Free up to certain thresholds (usually usage) or free basic service or for non-commercial use
    Charges for additional usage or premium service
    Typically Ad supported
    Better customer acquisition
    Direct revenue
    Flickr/skype/Box.net/Vimeo/…
    Free cannot be forever
    13
  • Pay as you use
    One of the popular monetization models for Cloud
    No fixed base price
    Customer gets charged only for the resources/services utlized
    Combine with Freemium
    AWS/Google App Engine
    Usually an economical option for customers
    14
  • Premium Content/Memberships
    Content available for an extra fee
    E-books, research, articles, brand, photos, video, etc.
    Typically micropayments
    Wall street journal
    Forrester research
    Kindle
    Ooyala
    LinkedIn
    15
  • Subscriptions
    Fixed/variable amount recurring payments
    Less friction
    Better user experience
    Popular in physical world – TV/Telephone/Internet/Magazines/publications/etc…
    Suitable for both content and service based use cases
    Salesforce, Netflix, Apple Developer Program, etc.
    16
  • Digital Goods/Virtual Currencies
    Non-physical or digital items
    Popular in Games, Social Apps, etc.
    Virtual Gifts, in-game currency, virtual goods
    Higher conversion rates
    Lower fulfillment expenses
    Helps in customer engagement, retention and acquisition
    Zynga (farmville)
    Playspan
    SocialGold
    Facebook Credits
    17
  • 18
    Roughly 12% of Americans, or more than one in 10, have bought a virtual item
    at some point in the last 12 months – according to a study by analyst firm
    Frank N. Magid Associates
  • The Challenge for developers
    • applying these models to their business and users
    • engagement is the key !
    • able to accept and process payments efficiently
    • enable consumers to be able to pay quickly, securely and easily
    19
  • many players…
    20
  • a quick look at what Online Payment Services Provide
    21
  • Payflow
    Authorize.net
    CyberSource
    BrainTree
    WorldPay
    Recurly
    Spreedly
    Chargify
    Zuora
    Freshbooks
    Services
    Google
    PayPal
    Amazon
    PayPal
    Amazon
    22
  • Choose a Payment Provider…
    • Supports different payment types
    • Provides PCI Compliance, Fraud and Risk detection & protection
    • Secure and Privacy enabling
    • Provides flexibility to support new/non-traditional use cases
    • API vs Cookie cutter solution based on your needs
    • Provides best user experience
    • Economical
    23
  • Where do payments fit in ?
    Service Payments (rent, parking, …)
    Expense Sharing
    Social Commerce
    P2P / Social Payments (group gifts, registry,…)
    Healthcare
    Digital Goods
    Virtual Currencies
    Multi-Merchant Marketplaces
    Mobile and Device Payments (NFC)
    Games
    B2B
    Invoicing
    Govt.
    Mass Payments – Affiliate fees
    Bill Pay
    24
  • Chase your dream and monetize along the way
    For more info
    @ppalavilliwww.x.com@paypalx
    25