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IDC et App Annie Monetization trends 2012-2017
 

IDC et App Annie Monetization trends 2012-2017

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    IDC et App Annie Monetization trends 2012-2017 IDC et App Annie Monetization trends 2012-2017 Presentation Transcript

    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   Mobile App Advertising and Monetization Trends 2012-2017: The Economics of Free March 2014
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   2   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   10B   20B   30B   40B   50B   PC  Online   Search   AdverDsing   PC  Online   Display   AdverDsing   Other  PC   AdverDsing*   Mobile  Display   AdverDsing   Mobile  Search   AdverDsing   Mobile  In-­‐App   AdverDsing   Mobile  App   Store  Revenue   (iOS  App  Store   &  Google  Play)   Revenue  (USD)   2012   2013   Mobile  apps  are  outpacing  both  mobile  and  PC   browser-­‐based  ads  in  revenue  growth   •  Mobile in-app advertising revenue is likely to continue taking share from PC advertising revenue as advertisers allocate their budgets for maximum return PC   Mobile  Device:   Browser-­‐Based  AdverDsing   Mobile  Apps   Worldwide  Online  AdverBsing  and  Mobile  App  Revenue:  2012  to  2013   Source:  App  Annie  &  IDC   1.1x   1.1x   1.1x   1.5x   1.5x   1.6x   2.3x   *  Other  PC  AdverDsing  includes  online  rich  media,  video  and  classified  adverDsing   3  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0   0.5B   1.0B   1.5B   2.0B   2012   2013   Device  Installed  Base   0   50   100   150   2012   2013   Indexed  Revenue   Worldwide  Combined  App  Store  and  In-­‐ App  AdverBsing  Revenue  per  Device*   4   Source:  App  Annie  &  IDC   Worldwide  Combined  iOS  and  Android   Smartphone  and  Tablet  Installed  Base   Source:  IDC   1.7x  growth   1.1x  growth   •  Massive growth in smart mobile devices dramatically expands opportunity to reach consumers •  As revenue per mobile device is also increasing, mobile devices represent an increasingly powerful avenue of monetization Mobile  app  revenue  growth  is  driven  by  gains  in   device  adopBon  and  revenue  per  device   *In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   5   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   Business  Model   How  does  it  work?   Top  3  Apps  by  iOS  and  Google   Play  Revenue  in  2013*   Freemium   Free  download  with  in-­‐app  purchases                Puzzle  &  Dragons                Candy  Crush  Saga                Clash  of  Clans   Paid   Paid  download  with  no  in-­‐app  purchases                Minecra[  –  Pocket  EdiDon                Pages                WhatsApp  Messenger**   Paidmium   Paid  download  with  in-­‐app  purchases                FIFA  13                Grindr  Xtra                Bloons  TD  5   In-­‐App  AdverDsing   Contains  ads  (banner  ads,  video  ads,  etc.)   N/A   Dynamic   Business  model  shi[s  depending  on  certain   factors  (app  shi[s  to  an  ad-­‐supported  model  if   the  user  does  not  make  in-­‐app  purchases,  etc.)   N/A   App  publishers  use  a  variety  of  business  models  to   generate  revenue   *Based  on  App  Annie  Intelligence  esDmates   **WhatsApp  Messenger  ranked  as  the  #3  paid  app  based  on  its  iOS  revenue  up  unDl  early  August  2013,  when  it  went  from  paid  to  freemium  on  iOS  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   The  opportunity  for  apps  also  extends  beyond  direct   moneBzaBon  in  the  app  stores   7   App  Name*   MoneBzaBon  Strategy   eBay   Drive  online  shopping  conversion   Nedlix   Allow  current  subscribers  to  stream  content  on  the  go   Walgreens   Drive  shoppers  to  brick-­‐and-­‐mortar  stores  via  coupons,  inventory   informaDon  and  pharmacy  chat   Bandsintown   Concerts   Brings  users  to  musical  performances  through  local  concert   noDficaDons  and  recommendaDons   IKEA  Catalog   Offers  consumers  the  ability  to  test  how  IKEA  products  would  look  in   their  homes  without  traveling  to  the  store  through  the  use  of   augmented  reality   *AddiDonal  informaDon  on  these  apps  available  on  App  Annie  Store  Stats    
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   8   Freemium  and  In-­‐App  AdverBsing  tower  over  other   app  business  models   •  Freemium and In-App Advertising allow publishers the opportunity to cast a wider net and better monetize in the long-run through a potentially more consistent revenue stream •  Paid and Paidmium revenue both shrank from 2012 to 2013 0   50   100   150   200   In-­‐App   AdverDsing   Freemium   Paid   Paidmium   Indexed  Revenue   Mobile  App  Revenue  in  Key  Countries*   2012   2013   iOS  App  Store  &  Google  Play   *  Brazil,  Canada,  France,  Germany,   India,  Japan,  Russia,  South  Korea,   United  Kingdom  &  United  States     *  In-­‐app  adverDsing  across  all  app   stores;  app  store  revenue  across   iOS  App  Store  and  Google  Play Source:  App  Annie  &  IDC   +56%   +211%   -­‐29%   -­‐23%  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   9   4%   8%   4%   9%   ComposiDon  By   Revenue   ComposiDon  By   Number  of  Apps   Freemium   Paid   Paidmium   •  Freemium drives a disproportionate volume of app revenue across both stores •  Freemium apps are even more common on Google Play than on iOS App Store Freemium  is  more  prevalent  and  outperforms  other   app  store  moneBzaBon  models   Source:  App  Annie   App  Store  ComposiBon  by  Business  Model   Worldwide,  December  2013*   *  Business  model  percentages  are  based  on  the  combinaDon  of  the  Top  1,000  apps  on  the  iOS  App  Store  and  the  Top  1,000  apps  on  Google  Play     from  App  Annie  Intelligence  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute     It’s  never  too  late  to  switch  business  models!   App  Name*   Change  in  MoneBzaBon  Strategy   WhatsApp   Messenger   In  a  Forbes  arDcle**,  the  WhatsApp  founders  revealed  that  they   would  switch  the  app  price  "from  free  to  paid  so  they  wouldn't  grow   too  fast"  with  a  freemium  business  model  in  place  since  July  2013   Skype   Though  app  stores  take  a  percentage  of  consumer  spend,  Skype   began  allowing  users  to  purchase  Skype  credits  through  app  stores   in  late  2012  to  limit  purchase  fricDon   FIFA  14   FIFA  13  was  the  #1  paidmium  app  for  2013,  and  Electronic  Arts  sDll   switched  over  to  a  freemium  business  model  for  the  even  more   successful  FIFA  14   Real  Racing  3   Real  Racing  2  uDlized  a  paidmium  business  model,  but  the  success  of   the  series  skyrocketed  with  the  release  of  freemium  Real  Racing  3   *  AddiDonal  informaDon  on  these  apps  available  on  App  Annie  Store  Stats   **  hop://www.forbes.com/sites/parmyolson/2014/02/19/exclusive-­‐inside-­‐story-­‐how-­‐jan-­‐koum-­‐built-­‐whatsapp-­‐into-­‐facebooks-­‐new-­‐19-­‐billion-­‐baby/   10  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   11   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium (free download with in-app purchases) b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   Freemium   MoneBzaBon   Value  ProposiBon   App  Examples*   Usage   Free  app  offers  limited  usage,  bandwidth,   hours  or  storage  space.  Pay  to  raise  or   remove  those  limits.                NYTimes                Dropbox   Time   Free  trial  of  full  funcDonality  for  a  limited   amount  of  Dme.  Pay  to  conDnue  using  a[er   Dme  period  is  up.                WhatsApp  Messenger                Swi[Key  Keyboard   FuncDonality   Pay  for  virtual  items,  speed-­‐ups,  content,   add-­‐ons,  upgrades,  services  or  capabiliDes.                Clash  of  Clans                LINE                Skype   User  Experience   Free  app  is  ad-­‐supported.  Remove  ads  by   paying  in-­‐app  or  through  a  separate  paid   download.                Say  the  Same  Thing                SoundHound   CombinaDon   The  app  uses  a  combinaDon  of  the  above.                  Evernote                  (FuncDonality  and  Usage)   There  are  many  freemium  value  proposiBons  that  can   appeal  to  different  types  of  users   *  AddiDonal  informaDon  on  these  apps  available  on  App  Annie  Store  Stats  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0%   10%   20%   30%   40%   50%   60%   CombinaDon   User  Experience   FuncDonality   Time   Usage   Percent  of  Respondents   13   Among  the  apps  you  manage  or  publish,  how  do  the   freemium  apps  moneBze  (select  all  that  apply)?   FuncBonality  is  the  most  common  value  proposiBon   used  by  freemium  app  publishers   •  Publishers need to select the right freemium technique to match each app’s function and user base Source:  App  Annie  Survey   February  2014  (n  =  1694)  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0%   10%   20%   30%   40%   21%  to  100%   11%  to  20%   6%  to  10%   2%  to  5%   0%  to  1%   Percent  of  Respondents   14   •  Publishers can structure their apps to target the whales who make repeated purchases •  Are your in-app purchases structured in a way that caps revenue? Can your users purchase repeatedly? Source:  App  Annie  Survey   February  2014  (n  =  1169)   If  your  apps  offer  in-­‐app  purchases,  please  esBmate  the  percentage  of  your  apps’   monthly  average  users  (MAUs)  who  make  at  least  one  in-­‐app  purchase:   The  freemium  model  is  very  successful,  even  with  a   small  proporBon  of  users  making  in-­‐app  purchases  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   App   Category   Top  App  by  iOS   and  Google  Play   Revenue  in  2013   Examples  of   In-­‐App   Purchases   Messaging            LINE   SDckers   Music   Streaming            Pandora  Radio   No  ads,   unlimited   listening   News            NYTimes   Unlimited   arDcles   DaDng            Zoosk   SubscripDon,   respond  to   suitors   15   0" 50" 100" 150" 200" 250" 2012" 2013" 2012" 2013" IndexedRevenue" Apps that use in-app purchases" Apps that do not use in-app purchases" Source:  App  Annie  Intelligence   •  Although more prevalent in games, the freemium business model has successfully expanded into other categories such as messaging, music, news and dating •  This is partially driven by “gamification” of apps, but may also reflect natural limits to what consumers will pay for up front Freemium  model  now  dominates  games,  while   growing  steadily  outside  of  games   Worldwide  iOS  App  Store  Revenue   2012  vs.  2013   Games   Apps  Excluding  Games  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   16   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid (paid download with no in-app purchases) c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   17   0%   10%   20%   30%   Under  $2.00   $2  to  $3.99   $4  to  $5.99   $6  to  $7.99   $8  to  $9.99   $10  &  Over   Download  Price   Percent  of  Top  Apps   Source:  App  Annie   Download  Price*  of  Apps  in  the  Top  1000  Grossing  Apps  on   iOS  App  Store  and  Google  Play,  December  2013   *  Download  price  as  of  December  31,  2013  from  App  Annie  Intelligence   •  App store revenue is not directly correlated to app price, and publishers must select an appropriate price for their app and category Paid  apps  appearing  in  the  Top  1000  grossing  apps  on   iOS  and  Google  Play  most  commonly  in  the  $2-­‐$6  range  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   18   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium (paid download with in-app purchases) d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   39%   61%   In-­‐App  Purchases   Paid  Downloads   19   There  is  sBll  opportunity  for  moneBzaBon  of  users   following  a  paid  download   Source:  App  Annie  Intelligence   *  Brazil,  Canada,  France,  Germany,  India,  Japan,  Russia,   South  Korea,  United  Kingdom  &  United  States   *  App  store  revenue  across  iOS  App  Store  and  Google  Play   •  Paidmium apps primarily generated revenue from their downloads, but users were still willing to spend a sizeable amount on in-app purchases Source  of  Paidmium  App  Revenue  in  2013  for  Key  Countries*  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   20   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising (contains ads) 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   58%   42%   0%   20%   40%   60%   80%   No   Yes   Percent  of  Respondents   21   •  Publishers must strike the right balance between monetizing through app stores and monetizing through in-app advertising Source:  App  Annie  Survey   February  2014  (n  =  2039)   Do  you  display  paid  adverBsing  with  any  of  your  apps?   Over  40%  of  surveyed  publishers  used  paid   adverBsing  within  their  apps  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   22   Source:  App  Annie  Survey   February  2014  (n  =  658)   If  you  display  paid  adverBsing,  how  much  revenue  do  you  earn  from  in-­‐app   adverBsing  per  month  across  all  of  your  apps?     0%   20%   40%   60%   80%   100%   0   20K   40K   60K   80K   100K   CumulaBve  Percent  of   Respondents   Ad  Revenue  (USD)   +   In-­‐app  adverBsing  revenue  rides  on  the  back  of   popular  hits  with  desirable  ad-­‐placements   •  Breakout apps can make over $100K per month •  Developers in the 75th to 90th percentile can make up to $10K per month •  This illustrates the uniqueness of Flappy Bird reportedly making over $50K per day in in-app advertising
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   23   Source:  App  Annie  Survey   February  2014  (n  =  678)   If  you  display  paid  adverBsing  within  your  app,  how  many  in-­‐app  ad  impressions  do   you  fill  each  month  across  all  apps?   0%   20%   40%   60%   80%   100%   0   1MM   2MM   3MM   4MM   5MM   CumulaBve  Percent  of   Respondents   In-­‐App  Ad  Impressions   +     Hit  apps  also  drive  in-­‐app  ad  impressions   •  Apps need usage to generate advertising impressions, which is where downloads, engagement and user retention play a critical role
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   24   0%   20%   40%   60%   80%   100%   Banner  Ads   Pre/Mid/Post-­‐Roll  Video   IncenDvized  Ads   NaDve  Ads   IntersDDal  Non-­‐Video   IntersDDal  Video  Ads   Less  Than  in  2013   About  the  Same  as  in  2013   More  Than  in  2013   In  2014,  how  ocen  will  you  use  these  in-­‐app  ad  formats?   •  Interstitial ads, incentivized ads and native ads appear set for the largest gains in 2014 Source:  App  Annie  Survey,  February  2014  (n  =  807)   (n  =  393)     (n  =  497)     (n  =  451)     (n  =  361)     (n  =  304)     (n  =  713)     Publishers  also  have  to  find  the  in-­‐app  adverBsing   format  that  best  fits  their  users  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0%   20%   40%   60%   80%   100%   Real-­‐Time  Bidding  Exchanges   Agencies   Direct  to  AdverDsers   MediaDon  Pladorms   Ad  Networks   Percent  of  Respondents   25   Source:  App  Annie  Survey   February  2014  (n  =  781)   Through  which  channels  do  you  sell  your  in-­‐app  ads  (select  all  that  apply)?   Ad  networks  are  the  primary  channel  for  selling     in-­‐app  ads   •  Ad networks are still the most commonly used platform for publishers to fill ad inventory •  Mediation platforms and real-time bidding exchanges are gaining traction
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   26   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0   50   100   150   200   United   States   Japan   South   Korea   United   Kingdom   Germany   Canada   France   Russia   Brazil   India   Indexed  Mobile  App   Revenue   Mobile  App  Revenue*  by  Country   2012   2013   *In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play   Source:  App  Annie  &  IDC   United  States  and  Japan  lead  in  mobile  app  revenue;   revenue  growth  occurred  across  key  countries   1.7x   2.2x   2.3x   1.7x   2.0x   1.7x   2.2x   2.1x   2.2x   3.0x   •  When developers’ target countries to enter, they should first analyze the monetization potential of the market •  Japan and South Korea benefit from historically leading edge mobile technology and service environments 27  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   28   32%   42%   53%   60%   62%   64%   66%   72%   73%   77%   0%   25%   50%   75%   100%   India   United   States   United   Kingdom   Germany   Canada   South   Korea   France   Japan   Brazil   Russia   App  Revenue   Mobile  App*  Revenue  ComposiBon  in  2013   App  Store   In-­‐App   AdverDsing   *In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play   Source:  App  Annie  &  IDC   SelecBng  the  mobile  app  business  model  that  fits  the   target  region  is  of  paramount  importance   •  India and the United States skew towards in-app advertising, while Japan, Brazil and Russia lean towards app store revenue
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   29   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0   25   50   75   100   125   PC  Online   Search   AdverDsing   PC  Online   Display   AdverDsing   Other  PC   AdverDsng**   Mobile  Display   AdverDsing   Mobile  Search   AdverDsing   Mobile  In-­‐App   AdverDsing   Mobile  App   Store  Revenue   (iOS  App  Store   &  Google  Play)   Indexed  Revenue   2013   2017   Mobile  in-­‐app  adverBsing  revenue  to  pass  PC  online   display  adverBsing  revenue  by  2017  for  key  countries   PC   Mobile  Device:   Browser-­‐Based  AdverDsing   Mobile  Apps   Online  AdverBsing  and  Mobile  App  Revenue  in  Key  Countries*:  2013  to  2017   Source:  IDC   1.1x   1.3x   1.1x   3.7x   3.1x   3.8x   2.1x   *Brazil,  Canada,  France,  Germany,  India,  Japan,  Russia,  South  Korea,  United  Kingdom  &  United  States   **Other  PC  AdverDsing  includes  online  rich  media,  video  and  classified  adverDsing   •  Mobile in-app advertising revenue is likely to continue taking share from PC advertising revenue as advertisers allocate their budgets for maximum return 30  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0   50   100   150   2013   2017   31   0   0.5B   1.0B   1.5B   2.0B   2013   2017   Device  Installed  Base   •  Growing device adoption and increasing revenue per device will grow the opportunity for mobile app publishers almost three-fold by 2017 Combined  iOS  and  Android  Smartphone  and   Tablet  Device  Installed  Base  in  Key  Countries*   Indexed  App  Store  and  In-­‐App  AdverBsing   Revenue  per  Device  in  Key  Countries*   Indexed  Revenue  per  Device   *          Brazil,  Canada,  France,  Germany,  India,  Japan,  Russia,  South  Korea,  United  Kingdom,  &  United  States   *          In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play   Increasing  mobile  devices  and  app-­‐related  revenue  per   device  create  a  huge  opportunity  in  mobile  by  2017   Source:  IDC   Source:  IDC   2.3x  growth   1.2x  growth  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0   100   200   300   400   United   States   Japan   United   Kingdom   Germany   South   Korea   France   Canada   India   Russia   Brazil   Indexed  Mobile  App  Revenue   Projected  Mobile  App  Revenue*  by  Country   2013   2017   *In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play   Source:  IDC   3.5x   1.8x   3.2x   3.5x   1.5x   3.0x   2.2x   8.7x   2.7x   3.2x   Key  countries  expected  to  show  significant  app  revenue   growth,  creaBng  a  range  of  opportuniBes  for  publishers •  While the United States is set for phenomenal growth, other markets such as India and Germany also offer key opportunities for app monetization growth in the future 32  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   0%   25%   50%   75%   100%   India   United   States   United   Kingdom   Germany   Canada   South   Korea   France   Japan   Brazil   Russia   2013   2017   Percent  of  App  Revenue   from  In-­‐App  AdverBsing   ProporBon  of  App-­‐Related  Revenue  Contributed  by  In-­‐App  AdverBsing   Most  key  countries  expected  to  move  even  more   toward  in-­‐app  adverBsing  by  2017   Source:  IDC   *In-­‐app  adverDsing  across  all  app  stores;  app  store  revenue  across  iOS  App  Store  and  Google  Play   •  Outliers are Japan and South Korea, where in-app purchases are expected to remain the main source of revenue 33  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   34   Aside  from  business  model,  what  are  other  key   publisher  consideraBon  points  for  app  moneBzaBon?   RecommendaDons  from  app  publishers:   •  Start  Early  –  Determine  how  to  moneDze  up  front,  not  a[er  building  your   app   •  Value  ProposiBon  –  Make  sure  your  app  provides  value  to  users   •  App  Discovery  –  Ensure  people  can  find  your  app   •  User  AcquisiBon  –  Need  a  large  user  base  to  bring  in  enough  revenue   •  App  Usage  –  Keep  users  engaged  to  drive  moneDzaDon   •  Ad  Sales  Channel    –  Be  sure  to  find  the  right  ad  network  for  your  app   •  Ad  Content    –  Show  ads  that  are  relevant  to  your  users   •  User  Experience  –  Do  not  let  moneDzaDon  strategy  degrade  user  experience   •  Track,  Analyze,  Research,  &  OpBmize  –  Measure,  iterate  and  improve     your  moneDzaDon  strategy  constantly;  keep  an  eye  on  market  trends  (See  App  Annie  AnalyDcs,  AdverDsing  AnalyDcs,  Store  Stats,  &  Intelligence)  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   35   1.  The revenue opportunity for publishers 2.  How do app publishers monetize their apps today? a.  Freemium b.  Paid c.  Paidmium d.  In-App Advertising 3.  App Monetization by Country 4.  Looking Ahead 5.  Key Takeaways
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   36   •  Mobile  app  stores  (iOS  and  Google  Play)  and  mobile  in-­‐app  ads   grew  revenue  by  2.3x  and  1.6x,  respecDvely,  from  2012  to  2013   •  The  above  channels  outpaced  mobile  and  PC  browser-­‐based  ads,   which  grew  revenue  by  1.5x  and  1.1x,  respecDvely   •  Mobile  apps  moneDze  especially  well  through  freemium  and  in-­‐ app  adverDsing   •  Mobile  in-­‐app  adverDsing  revenue  is  projected  to  pass  PC  online   display  adverDsing  revenue  by  2017  when  looking  at  combined   revenue  across  key  countries*   Key  Themes  &  Takeaways   *  Brazil,  Canada,  France,  Germany,  India,  Japan,  Russia,  South  Korea,  United  Kingdom  &  United  States  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   37   Report  methodology  and  updates  are  available  here   •  United  States  will  remain  the  leading  source  of  mobile  app-­‐related   revenue,  with  3.5x  growth  from  2013  to  2017     •  Remarkable  8.7x  revenue  growth  from  2013  to  2017  is  expected   for  India’s  mobile  app-­‐related  revenue,  driven  largely  by  rapid   smartphone  adopDon   •  Publishers  should  consider  different  business  model  strategies   depending  on  the  geographic  region;  India  skews  toward  in-­‐app   adverDsing,  while  Japan  skews  toward  app  store  revenue   •  Ad  networks  are  sDll  the  most  commonly  used  pladorm  for   publishers  to  fill  ad  inventory;  mediaDon  pladorms  and  real-­‐Dme   bidding  exchanges  are  gaining  tracDon   Key  Themes  &  Takeaways  (ConBnued)  
    • ©  2014  App  Annie  &  IDC  |  Do  Not  Distribute   @IDC @AppAnnie kweide@idc.com press@appannie.com