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App Monetization, still a mystery ?Praveen Alavilli@ppalavilli<br />1<br />
“chase your dream, money will follow”<br />2<br />
Still a mystery !<br />3<br />
History of Monetization at YouTube<br />2  Billion views a day<br />3rd most visited website<br />Localized in 23 countrie...
What is monetization ?<br />5<br />
6<br />
Indirect Monetization<br />7<br />
Advertizing<br />Banner ads, intrusive ads, contextual ads, target ads, interstitial ads, text ads,…<br />Cost Per Impress...
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</li></ul>http://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/<br />8<br />
Offers<br />Online, Local, Shopping rewards, Surveys, in-game, etc.<br />It’s really CPA/CPL/CPC<br />Customized/personali...
Relies on popular partner offers
Consumers do not
trust advertizing
want to view advertizing
need advertizing
want to stop what they are doing</li></ul>9<br />
Referrals<br />Affiliates, bounties, recommendations, etc.<br />CPA & CPS<br />Deals aggregation<br /><ul><li>Fees vary ba...
Needs credibility
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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 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.

Published in: Technology

Monetization Still A Mystery

  1. 1. App Monetization, still a mystery ?Praveen Alavilli@ppalavilli<br />1<br />
  2. 2. “chase your dream, money will follow”<br />2<br />
  3. 3. Still a mystery !<br />3<br />
  4. 4. History of Monetization at YouTube<br />2  Billion views a day<br />3rd most visited website<br />Localized in 23 countries across 24 different languages<br />15 The average number of minutes people spend on the site each day<br />24  Hours of video uploaded to YouTube every minute<br />45 Million home page impressions in the U.S. every day. <br />70% of YouTube traffic comes from outside the U.S.<br />100  Years of video scanned by copyright management technology every day<br />1700  Years it would take you to watch the hundreds of millions of videos on YouTube<br />Founded in February 2005<br />Aug 2006 - First advertising concepts launched: Participatory Video Ads (PVA) and Brand Channels<br />Sep 2006 - Underground music contest with first major advertiser: Cingular<br />Aug 2007 - InVideo Ads (overlays) launched<br />Dec 2007 - YouTube Partner Program launched<br />Mar 2008 - YouTube Insight (analytics tool) launched<br />Oct 2008 - Click-To-Buy e-commerce platform launched<br />Nov 2008 - Promoted Videos launch<br />Nov 2008 - Pre-Roll ads launch<br />Jan 2009 - Homepage ads expanded from 1 to 7 formats (IMAGE: Homepage ad grab)<br />Aug 2009 - Individual Video Partnerships launch<br />Nov 2009 - Skippable pre-rolls test<br />Dec 2009 - Video Targeting launch<br />Mar2010 - YouTube mobile ads launched<br />Source: https://sites.google.com/a/pressatgoogle.com/youtube5year/<br />4<br />
  5. 5. What is monetization ?<br />5<br />
  6. 6. 6<br />
  7. 7. Indirect Monetization<br />7<br />
  8. 8. Advertizing<br />Banner ads, intrusive ads, contextual ads, target ads, interstitial ads, text ads,…<br />Cost Per Impression (CPM)<br />Cost Per Click (CPC)<br />Cost Per Action (CPA)<br /><ul><li>Cost Per Lead
  9. 9. Cost Per Sale
  10. 10. ad network commissions
  11. 11. Relies on Unique impressions
  12. 12. Consumers do not
  13. 13. trust advertizing
  14. 14. want to view advertizing
  15. 15. need advertizing
  16. 16. High supply – low demand</li></ul>http://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/<br />8<br />
  17. 17. Offers<br />Online, Local, Shopping rewards, Surveys, in-game, etc.<br />It’s really CPA/CPL/CPC<br />Customized/personalized offers<br />Usually brings in wide range of popular partners<br /><ul><li>commissions
  18. 18. Relies on popular partner offers
  19. 19. Consumers do not
  20. 20. trust advertizing
  21. 21. want to view advertizing
  22. 22. need advertizing
  23. 23. want to stop what they are doing</li></ul>9<br />
  24. 24. Referrals<br />Affiliates, bounties, recommendations, etc.<br />CPA & CPS<br />Deals aggregation<br /><ul><li>Fees vary based on item/merchant & volume
  25. 25. Needs credibility
  26. 26. Not reselling</li></ul>10<br />
  27. 27. Direct Monetization<br />11<br />
  28. 28. e/m-commerce<br />Selling of goods and services<br />Oldest of all (since 1970s)<br />Reseller platforms<br />Marketplaces<br />Social commerce<br />Merchandise in social apps and games<br />P2P<br />Better returns/commissions<br />Have to deal with shipping, returns, etc.<br />Merchant on-boarding<br />12<br />
  29. 29. Freemium<br />Free + Premium<br />Popular monetization model<br />Free up to certain thresholds (usually usage) or free basic service or for non-commercial use<br />Charges for additional usage or premium service<br />Typically Ad supported<br />Better customer acquisition<br />Direct revenue <br />Flickr/skype/Box.net/Vimeo/…<br />Free cannot be forever<br />13<br />
  30. 30. Pay as you use<br />One of the popular monetization models for Cloud<br />No fixed base price<br />Customer gets charged only for the resources/services utlized<br />Combine with Freemium<br />AWS/Google App Engine<br />Usually an economical option for customers<br />14<br />
  31. 31. Premium Content/Memberships<br />Content available for an extra fee<br />E-books, research, articles, brand, photos, video, etc. <br />Typically micropayments<br />Wall street journal<br />Forrester research<br />Kindle<br />Ooyala<br />LinkedIn<br />15<br />
  32. 32. Subscriptions<br />Fixed/variable amount recurring payments<br />Less friction<br />Better user experience<br />Popular in physical world – TV/Telephone/Internet/Magazines/publications/etc…<br />Suitable for both content and service based use cases<br />Salesforce, Netflix, Apple Developer Program, etc.<br />16<br />
  33. 33. Digital Goods/Virtual Currencies<br />Non-physical or digital items<br />Popular in Games, Social Apps, etc.<br />Virtual Gifts, in-game currency, virtual goods<br />Higher conversion rates<br />Lower fulfillment expenses<br />Helps in customer engagement, retention and acquisition<br />Zynga (farmville)<br />Playspan<br />SocialGold<br />Facebook Credits<br />17<br />
  34. 34. 18<br />Roughly 12% of Americans, or more than one in 10, have bought a virtual item <br />at some point in the last 12 months – according to a study by analyst firm<br />Frank N. Magid Associates<br />
  35. 35. The Challenge for developers<br /><ul><li> applying these models to their business and users
  36. 36. engagement is the key !
  37. 37. able to accept and process payments efficiently
  38. 38. enable consumers to be able to pay quickly, securely and easily</li></ul>19<br />
  39. 39. many players…<br />20<br />
  40. 40. a quick look at what Online Payment Services Provide <br />21<br />
  41. 41. Payflow<br />Authorize.net<br />CyberSource<br />BrainTree<br />WorldPay<br />Recurly<br />Spreedly<br />Chargify<br />Zuora<br />Freshbooks<br />Services<br />Google<br />PayPal<br />Amazon<br />PayPal<br />Amazon<br />22<br />
  42. 42. Choose a Payment Provider…<br /><ul><li>Supports different payment types
  43. 43. Provides PCI Compliance, Fraud and Risk detection & protection
  44. 44. Secure and Privacy enabling
  45. 45. Provides flexibility to support new/non-traditional use cases
  46. 46. API vs Cookie cutter solution based on your needs
  47. 47. Provides best user experience
  48. 48. Economical </li></ul>23<br />
  49. 49. Where do payments fit in ?<br />Service Payments (rent, parking, …)<br />Expense Sharing<br />Social Commerce <br />P2P / Social Payments (group gifts, registry,…)<br />Healthcare<br />Digital Goods<br />Virtual Currencies<br />Multi-Merchant Marketplaces<br />Mobile and Device Payments (NFC)<br />Games<br />B2B<br />Invoicing<br />Govt.<br />Mass Payments – Affiliate fees<br />Bill Pay<br />24<br />
  50. 50. Chase your dream and monetize along the way<br />For more info<br />@ppalavilliwww.x.com@paypalx<br />25<br />

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