MONETIZE YOUR APP

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Mobile App Monetizing Strategies

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MONETIZE YOUR APP

  1. 1. MONETIZE YOUR APP by Hristo Neychev
  2. 2. So, you have build this amazing app and now you want to make some money with it!
  3. 3. Build it and they will come!
  4. 4. Profit Revenue Cost Cost Infrastruc ture Cost Hosting Bandwidt h Storage Staffing Support Marketing Developm ent Marketing Budget SEO PPC Social Media PR Revenue Number Paying Users New Paying Users Total Number of Users Conversio n Rate (to paid)Churn Average Revenue per User (ARPU) Buy the App In-App Purchases Subscripti on Fees Profit = Revenue – Cost
  5. 5. Revenue Number Paying Users New Paying Users Total Number of Users Conversion Rate (to paid) Churn Average Revenue per User (ARPU) Buy the App In-App Purchases Subscription Fees
  6. 6. Cost Infrastructure Cost Hosting Bandwidth Storage Staffing Support Marketing Development Marketing Budget SEO PPC Social Media PR
  7. 7. POTENTIAL REVENUE SOURCES • Pay-per-download • In-app advertising • In-app purchase • Affiliated web services • Subscriptions • Sponsorships • Promotions • Lead generation • Analytics • Affiliate sales
  8. 8. PAID APP REVENUE SOURCES
  9. 9. 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 adoption
  10. 10. 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 adoption
  11. 11. 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 adoption
  12. 12. PAID APP 30%  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoption
  13. 13. PAID APP $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 JUN '10 JAN '11 JUN '11 THE 300 MOST POPULAR PAID GAMES www.distimo.com  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoption
  14. 14. PAID APP PEOPLE EXPECT FREE UPGRADES  Prices from $0.99 up to $999.99  The Apple/Google store keeps 30%  Average price is going down  One time charge  Reduces adoption
  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 adoption
  16. 16. FREEMIUM REVENUE SOURCES
  17. 17. 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 tripwires
  18. 18. 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 tripwires
  19. 19. FREE(mium) APP • Conversion rates are in the range 0.5% to 4% (leaning to the lower) • Look at Pandora, Dropbox, Evernote, Sky pe, etc. • Shoot for 1-2% conversion rate  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 tripwires
  20. 20. FREE(mium) APP EXAMPLE: Marginal Cost (MC) = $1 ARPU = $5 (Average Revenue per User) Conversion Rate = 1% CALCULATION: Freemium users: 1,000,000 Monthly Revenue = $50,000 (1,000,000 * 1% * $5) Monthly Cost: $1,000,000  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 tripwires
  21. 21. 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 tripwires
  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 tripwires • Features • Capacity • Effort • Support • Usage quota • Number of seats • Customer class • Bandwidth features LIMITATIONS BASED ON:
  23. 23. IN-APP ADVERTISING REVENUE SOURCES
  24. 24. 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 Marginal Cost freemium apps
  25. 25. IN-APP PURCHASES REVENUE SOURCES
  26. 26. 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 purchases In-App Purchases PAID FREEMIUMFREE
  27. 27. 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 purchases
  28. 28. 30% IN-APP PURCHASES  Several options  An example  The Apple/Google store keeps 30% of each in-app transition  Big revenue of potential  Multiple sessions lead to more purchases
  29. 29. IN-APP PURCHASES 0 1 2 3 4 5 6 7 8 9 2011 2012E Advertising Revenue IAP Revenue http://www.flurry.com REVENUE POTENTIAL 82% 77% 18% 23%  Several options  An example  The Apple/Google store keeps 30% of each transition  Big revenue of potential  Multiple sessions lead to more purchases
  30. 30. IN-APP PURCHASES [CATEG ORY NAME] [VALUE][CATEG ORY NAME] [VALUE] [CATEG ORY NAME] [VALUE] , 0 FIRST IN-APP PURCHASE http://www.emarketer.com  Several options  An example  The Apple/Google store keeps 30% of each transition  Big revenue of potential  Multiple sessions lead to more purchases
  31. 31. AFFILIATED WEB-APP REVENUE SOURCES
  32. 32. 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 behavior
  33. 33. 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 behavior
  34. 34. AFFILIATED WEB-APP5 Common Mobile Search Behaviors http://www.spydertrap.com 1. Fewer keywords 2. Location is key (GPS, Google places) 3. Mobile experience 4. More frequent on evenings and weekends - the opposite of desktop search behavior 5. Apps vs. Browser searches 27% vs. 73% but growing  Good for content based apps  Make money on the service/content not on the app  Reach new customer audience  Reach new search behavior
  35. 35. SUBSCRIPTIONS REVENUE SOURCES
  36. 36. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenue
  37. 37. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenue
  38. 38. SUBSCRIPTIONS SUBSCRIPTION BASED GAMES http://www.insidemobileapps.com  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenue
  39. 39. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates  Relatively reliable revenue SUBSCRIPTION CONVERSION RATE 1-5%
  40. 40. SUBSCRIPTIONS  Good for content based apps (newspapers…  …magazines, and comics)  Not limited to those  Low conversion rates (1-5%)  Relatively reliable revenue • Annual subscription • Monthly subscription • Automated recurring billing • Subscribe for a service/feature • Subscribe for support plan • Good/Better/Best account options IDEAS:
  41. 41. 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 + Subscription
  42. 42. NEXT STEPS 1. Choose your monetizing strategy (mix of revenue sources) 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 strategy
  43. 43. Thank you! facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev

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