The document outlines 10 ways to monetize mobile apps, including paid apps, advertising, in-app purchases, subscriptions, and affiliate sales. It emphasizes the importance of understanding market expectations, costs, and user behavior to effectively implement these strategies. Additionally, it highlights the potential for combining different monetization methods for increased revenue.

1. MONETIZING MOBILE APPS
Dave Stevenson
@dnstevenson

2. I SELL APPS
(only iOS and Mac)

3. STEVENSON SOFTWARE
• Selling Apps for 2+ years
• Over 40 iOS Apps
• Top-Selling Gardening App - Landscaper’s Companion
• Top 100 iPhone, Top 10 iPad
• Featured by Apple a Few Times

4. 10 WAYS FOR YOU TO MAKE MONEY
WITH APPS
1. Paid
2. Advertising
3. In-App Purchases
4. Webapp Subscriptions
5. Subscriptions
6. Sponsorships/Promotions
7. Lead Gen
8. Affiliate Sales
9. Analytics
10. Super-Secret Way

5. #1 - PAID
• Simple: You set your price, people buy
• Apple keeps 30%
• Don’t
forget about ongoing costs:
support, hosting, etc
• Customer for Life - People Expect
Free Upgrades
• Higher Price != More Money
Day One

6. PAID
•A 0.99 cent app makes you 0.70 cents
• Some Math
• Price_of_App - Apple_Cut - Your_Costs = Your_Profit
• (0.70 - costs) * app_sales = your_target_number
• Considerations:
• Is your target audience big enough
• What is your competition priced at?

7. #2 - ADVERTISING
• Typical with Free Apps
• Is Your AppUsed One-Time or Does
it Have a Long Lifespan?
• Need a lot of downloads to make any
sizable money
• Expect
pennies per day for each 100
downloads per day
Airplane Quiz

8. ADVERTISING
• Different Ad Types
• Traditional Banner Ads
• Full-Page Interstitials
• Referral/Action Ads
• Earn $ per display and/or per click/action
• Easy to Implement SDKs
• iAds is built-into iOS SDK
• Google Adsense, Tapjoy, Millenium Media, Lift Media - there’s hundreds!
• Aggregators: Mobclix, Adwhirl

9. Verbs & Jamie’s Recipes
#3 - IN-APP PURCHASES

10. #3 - IN-APP PURCHASES
• Lots of Flexibility
• Free + In-App (“freemium”)
• Paid + In-App
• Different In-App Purchase Types:
• Tokens (consumable) - think Games
• Upgrades (non-consumable) - Free-to-Pro Upgrades,
Additional Levels/Content
• Expect 1-5% conversion rate
• If 100 people download app, 1-5 people will make in-
app purchase
Tattoo You

11. #4 - WEBAPPS
• Users
Pay for Services through
Webapp
• Distribute Your Mobile App for Free
• Reach More Customers
• Requires Double Work: Mobile App +
Webapp
Evernote

12. #5 - SUBSCRIPTIONS
• In
Order to Get New Content, User
Must Subscribe
• Typically Magazines
• Not Widely Seen Yet
• 1-5% conversion
Kids-In-Mind

14. #6 - SPONSORSHIPS / PROMOTIONS
• “Brought to you by XXXX”
• Like Advertising- Companies Pay You
to Feature their Product or Service
Twitter

15. PROMOS
• Do Your Own Promotions
• Make a Free app that has marketing to
your paid app
Plant Pictures

16. #7 - LEAD GEN
• Companies Pay You to Get them Sales
Leads
• High Trust is Required
• Sometimes viewed as “slimey”
• Super Low Conversions
• Volume, Volume, Volume
Zillow

17. Chomp & iRecommend
#8 - AFFILIATE SALES
Earn a % on Purchases User Makes Through Your App

18. AFFILIATE SALES
• Apple Pays 5% on Purchases
• http://www.apple.com/itunes/affiliates/
• Amazon: Up to 15% on Purchases
• https://affiliate-program.amazon.com/
• Lots of Others: Clickbank, Commission Junction, ShareASale
• Usually Low Margins - 5% on 0.99 = 4 cents

19. #9 - ANALYTICS
• People will pay for anonymous
analytics data from your app
• Not Against Apple’s Standard TOS to
collect
SimpleNexus

20. #10 - DON’T
• Not All Apps Need to Make Money
• Banks, Marketing, etc
• You Can Still Make Money
• Build Them for People
• Invest in Them
• Work for Them
Chase

21. GETTING PAID
• iOS Contractors are earning $75+ / hour
• Little Experience Salaries: $75+
• Experienced: $100k +

22. REVIEW: 10 WAYS TO MONETIZE YOUR
APPS
1. Paid
2. Advertising
3. In-App Purchases
4. Webapp Subscriptions
5. Subscriptions
6. Sponsorships/Promotions
7. Lead Gen
8. Affiliate Sales
9. Analytics
10. Don’t

23. MONETIZING CONSIDERATIONS
• User Expectations
• Your Costs
• Market
• Do Some Math
• Mix & Match

24. USER EXPECTATIONS
• There is a race to the bottom - $1 is almost too much for some users
• Monetize and Price According to Category Expectations
• Simple Games = Free + In-App Purchases or Paid
• Niche Apps = Paid w/ Higher Price?
• News App = Advertising

25. YOUR COSTS
• One Purchase == Customer for Life
• Lifetime-Value of Customer == 0.70 ?
• Support, Infrastructure (Hosting, Bandwidth), APIs, Partners
• Instagram’s Monthly Hosting Bill: 2 nice cars each month!

26. MARKET
• How Many People are in Your Target Market?
• Now, How Many of those People Have iPhones?
• Next, How Many of those People with iPhones will Purchase Your App?
• Rule of 1%
• 1.5m gardeners, 15k w/ iPhones, 150 will buy my app

27. DO SOME MATH
• 100 apps downloaded each day at $0.99 = $70 or $2,100 per month
• $2,100 per month is $25,200 per year (just above poverty)
• Thinking
of Doing Adwords? $0.25 per click + 25% conversion rate = cost $1.00
to make $0.70
• Even worse with realistic 1-3% conversion rate
• Typical Apps will Cost > $10k for v1.0

28. MIX & MATCH
• Monetization Methods can (and should) be Combined
• Paid App + In-App Upgrades
• Free w/ Advertising + In-App Purchases/Upgrades
• Free w/ Lead Gen + Advertising
• Affiliate Sales - Anytime You Have Links to Outside Content

29. PARTING THOUGHTS
• Each Monetization Strategy May Have Different Business & Marketing Strategies
• Paid and Advertising are Easy to Dip Into
• Just remember to watch your costs
• Freemium will be the most interesting space to watch

31. GOOD LUCK!

32. THANKS!
• web: http://www.stevensonsoftware.com
• email: dave@stevensonsoftware.com
• twitter: @dnstevenson