The document discusses various monetization strategies for mobile apps, including paid apps, freemium apps, in-app advertising, in-app purchases, affiliated web apps, and subscriptions. It provides examples and considerations for each strategy, noting that freemium and subscriptions often have low conversion rates but can provide reliable long-term revenue. The Apple/Google stores take 30% of revenue from paid apps and in-app purchases.
Every publisher we speak with wants to know how we drive such high ad performance with our optimization layer. Although we’ve always been completely candid with our publishers in our meetings, we’ve never revealed our trade secrets around our performance in a documented form – until now.
The truth is, performing the optimizations we do for Upsight requires some very proprietary technology, so we feel we can comfortably reveal our optimization secrets. To that end, VP Mediation Platform, Darren Keyes, decided to sit down and write ‘The Art & Science of Ad Optimization’. He explains in painful detail all the tricks of our industry-leading trade.
Programmatic Ad Mediation | Pavel GolubevJessica Tams
Delivered at Casual Connect Europe 2016
For years, advertisers were using programmatic ad buying solutions to get the most out of their ad budget. Now, publishers can level the playing field with programmatic ad mediation. Programmatic ad mediation increases revenue for publishers by engaging ad networks in real-time auction-based competition for every ad impression.
Ad networks mediation is an ad-tracking platform that is integrated with multiple ad networks. It can facilitate ad networks management and ads optimization. By employing it, you can add unlimited ad networks and efficiently manage them to enrich the content and form of mobile advertising and optimize the fill rate and eCPM.
Every publisher we speak with wants to know how we drive such high ad performance with our optimization layer. Although we’ve always been completely candid with our publishers in our meetings, we’ve never revealed our trade secrets around our performance in a documented form – until now.
The truth is, performing the optimizations we do for Upsight requires some very proprietary technology, so we feel we can comfortably reveal our optimization secrets. To that end, VP Mediation Platform, Darren Keyes, decided to sit down and write ‘The Art & Science of Ad Optimization’. He explains in painful detail all the tricks of our industry-leading trade.
Programmatic Ad Mediation | Pavel GolubevJessica Tams
Delivered at Casual Connect Europe 2016
For years, advertisers were using programmatic ad buying solutions to get the most out of their ad budget. Now, publishers can level the playing field with programmatic ad mediation. Programmatic ad mediation increases revenue for publishers by engaging ad networks in real-time auction-based competition for every ad impression.
Ad networks mediation is an ad-tracking platform that is integrated with multiple ad networks. It can facilitate ad networks management and ads optimization. By employing it, you can add unlimited ad networks and efficiently manage them to enrich the content and form of mobile advertising and optimize the fill rate and eCPM.
1. MONETIZE
YOUR APP
by Hristo Neychev
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2. So, you have created this
amazing, useful app and now you
want to make some money with
it!
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
3. What is your favorite cocktail?
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
4. My favorite
cocktail
SEX
ON THE BEACH
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
5. Now…let’s talk
about
SEXY PROFIT
ON THE BEACH
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
6. SEXY PROFIT
ON THE BEACH
30% analysis
20% forecasting
40% marketing
10% finance
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
7. Build it and they will come!
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
9. PROFITABILITY ESTIMATION
Total
New Number
Paying of Users
Number Conversio
Paying Users n Rate (to
Users Churn paid)
Revenue
Revenue Buy the
App
Average
Revenue In-App
per User Purchases
(ARPU)
Subscripti
on Fees
Profit Infrastruc
ture Cost
Hosting
Bandwidt
h
Storage
Cost
Developm
Staffing Support Marketing
ent
Cost
SEO
PPC
Marketing
Budget Social
Media
PR
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
10. Total Number
of Users
New Paying
Users
Number Paying Conversion
Users Rate (to paid)
Churn
Revenue
Buy the App
Average
In-App
Revenue per
Purchases
User (ARPU)
Subscription
Fees
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
11. Infrastructure
Hosting Bandwidth Storage
Cost
Staffing Support Marketing Development
Cost
SEO
PPC
Marketing
Budget
Social Media
PR
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
14. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
16. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
17. PAID APP
Prices from $0.99 up to $999.99
The Apple/Google store keeps 30%
Average price is going down
30% One time charge
Reduces adoption
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
18. THE 300 MOST POPULAR
PAID GAMES PAID APP
$2.50 Prices from $0.99 up to $999.99
$2.00 The Apple/Google store keeps 30%
Average price is going down
$1.50
One time charge
$1.00
Reduces adoption
$0.50
$0.00
JUN '10 JAN '11 JUN '11
facebook.com/HNeychev linkedin.com/in/HristoNeychev
www.distimo.com twitter: @HristoNeychev
19. PAID APP
Prices from $0.99 up to $999.99
PEOPLE The Apple/Google store keeps 30%
EXPECT FREE Average price is going down
UPGRADES One time charge
Reduces adoption
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
20. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
23. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
24. FREE(mium) APP
• Conversion rates are in the range
0.5% to 4% Freemium vs. Free Trial
• Look at Pandora, Dropbox, Freemium is a tricky game to play
Evernote, Skype, etc. Very low conversion rates
• Shoot for 1-2% conversion rate Beware of the marginal cost (MC)
Wider adoption = wider advertising
Set smart tripwires
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
25. EXAMPLE:
MC = $1 FREE(mium) APP
ARPU = $5
CR = 1%
Freemium vs. Free Trial
CALCULATION: Freemium is a tricky game to play
Freemium users: 1,000,000
Very low conversion rates
Monthly Revenue == $500,000 Beware of the marginal cost (MC)
(1,000,000 * 1% * $5)
Wider adoption = wider advertising
Monthly Cost: $1,000,000 Set smart tripwires
SEXY PROFIT => UGLY LOSS
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
26. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
27. LIMITATIONS BASED ON: FREE(mium) APP
• Features • Usage quota
• Capacity • Number of seats Freemium vs. Free Trial
• Effort • Customer class
• Support • Bandwidth features Freemium is a tricky game to play
Very low conversion rates
Beware of the marginal cost (MC)
Wider adoption = wider advertising
Set smart tripwires
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
29. 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 MC freemium
apps
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
31. IN-APP PURCHASES
PAID
Several options
An example
The Apple/Google store keeps 30%
In-App of each transition
Purchases
Big revenue of potential
FREE FREEMIUM
Multiple sessions lead to more
purchases
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
32. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
33. IN-APP PURCHASES
Several options
An example
The Apple/Google store keeps 30%
30% of each transition
Big revenue of potential
Multiple sessions lead to more
purchases
AGAIN
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
34. REVENUE
POTENTIAL IN-APP PURCHASES
9
Advertising
8
Revenue 23% Several options
7 IAP Revenue
An example
6
The Apple/Google store keeps 30%
5 18% of each transition
4
Big revenue of potential
3
77% Multiple sessions lead to more
2 82% purchases
1
0
2011 2012E
facebook.com/HNeychev linkedin.com/in/HristoNeychev
http://www.flurry.com twitter: @HristoNeychev
35. FIRST IN-APP IN-APP PURCHASES
[CATEG
PURCHASE
ORY
NAME] ,0 Several options
[CATEG
[VALUE]
ORY
NAME]
An example
[VALUE]
[CATEG The Apple/Google store keeps 30%
ORY of each transition
NAME] Big revenue of potential
[VALUE]
Multiple sessions lead to more
purchases
facebook.com/HNeychev linkedin.com/in/HristoNeychev
http://www.emarketer.com twitter: @HristoNeychev
37. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
38. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
39. 5 Common Mobile AFFILIATED WEB-APP
Search Behaviors
1. Fewer keywords
Good for content based apps
2. Location is key (GPS, Google
places) Make money on the service/content
not on the app
3. Mobile experience
Reach new customer audience
4. Time (more frequent on
evenings and weekends; the
Reach new search behavior
opposite of desktop search
behavior)
5. Apps vs. Browser searches 27%
vs. 73% but growing
facebook.com/HNeychev linkedin.com/in/HristoNeychev
http://www.spydertrap.com twitter: @HristoNeychev
41. SUBSCRIPTIONS
Good for content based apps
(newspapers…
…magazines, and comics)
Not limited to those
Low conversion rates (1-5%)
Relatively reliable revenue
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
42. SUBSCRIPTIONS
Good for content based apps
(newspapers…
…magazines, and comics)
Not limited to those
Low conversion rates (1-5%)
Relatively reliable revenue
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
43. SUBSCRIPTION
BASED GAMES SUBSCRIPTIONS
Good for content based apps
(newspapers…
…magazines, and comics)
Not limited to those
Low conversion rates (1-5%)
Relatively reliable revenue
facebook.com/HNeychev linkedin.com/in/HristoNeychev
http://www.insidemobileapps.com
twitter: @HristoNeychev
44. SUBSCRIPTIONS
Good for content based apps
(newspapers…
SUBSCRIPTION …magazines, and comics)
CONVERSION Not limited to those
RATE Low conversion rates
1-5% Relatively reliable revenue
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
45. IDEAS: SUBSCRIPTIONS
• Annual subscription
• Monthly subscription
• Automated recurring billing
Good for content based apps
(newspapers…
• Subscribe for a service/feature
• Subscribe for support plan …magazines, and comics)
• Good/Better/Best account Not limited to those
options
Low conversion rates (1-5%)
Relatively reliable revenue
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
46. 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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
47. NEXT STEPS
1. Choose your monetizing strategy
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
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev
48. And last, but not the least…
…have FUN on the beach!
facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev