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Mobile Monetization

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Mobile Monetization

  1. 1. Mobile Monetization May 20, 2015 Founders Network Mentoring Session
  2. 2. Agenda ● Overview of monetization models o Best practices o Examples ● Q&A - Member discussion
  3. 3. Monetization models ● Paid ● Freemium ● Free-2-Play with In-App Purchases ● Advertising ● Referral network
  4. 4. Paid You charge a pre-determined fee for downloading and using your app When to use this: ● Offer superior content, tools or experiences that users covet and are willing to pay for ● Typically productivity tools, high quality entertainment or experiences powered by proprietary content/tech/data Examples: MS Office, Adobe Photoshop, Monument Valley, Minecraft, HBO Now
  5. 5. Paid Best Practices: ● The key to finding success with this model is in your ability to showcase the perceived value of your app with a killer app listing (which includes screenshots, five star reviews, etc.) that differentiates it from similar free apps. ● Pricing should be based on value to your customers and their willingness to pay ● Determine One-time vs. Subscription model based on your product consumption pattern and expected customer support
  6. 6. Subscriptions This model is best suited for service focused apps and allows brands to earn revenue on a recurring basis - eg. news, lifestyle, and entertainment apps since they can limit content like articles read or videos watched. Freemium Subscriptions (Paywalls) - business model is similar to the freemium model except that it focuses on gating content, not features. Paywalls allow an app user to view a predetermined amount of content for free and then prompts them to sign up for a paid subscription to get more. Example: Umano - allows users to listen to a limited number of stories until they sign up for a premium subscription
  7. 7. Freemium You provide a subset of your features or capabilities for free and charge for the others When to use this: ● You user needs and willingness to pay vary from feature to feature ● You expect your user needs to grow over time ● You can slice your product by feature bundles or levels of capability Examples: Evernote, Parse, Slack, BitBucket
  8. 8. Freemium Best Practices: ● Segment by capabilities instead of features to give users a taste of your entire feature set o Example: BitBucket offers all the features for free for a limited number of users, vs. Evernote offers limited number of features in free tier ● Have no more than 3 tiers for simplicity https://bitbucket.org/plans https://evernote.com/pricing/ https://gamecommerce.slack.com/pricing
  9. 9. Free-2-Play with In-App Purchases You offer your full-featured app for free for everyone to use. When to use: ● Your app has broad appeal but willingness to pay varies significantly across your users ● You need network effect to drive growth and retain your core audience Examples: Most games - Clash of Clans, Candy Crush
  10. 10. Free-2-Play with In-App Purchases Best Practices: ● In-app purchasing should be optional and not necessary to derive full benefit of the app ● Typically 90%+ of the revenue is generated by <5% of the users - Understanding and balancing the needs of these diverse segments is key ● Promote purchases that reinforce and tighten emotional appeal of the app to your core audience Examples: Crossy Road characters
  11. 11. Advertising Free, But With Ads (In-App Advertising) - You make money by selling data- driven advertising space in your app. You can do this independently or work with a mobile ad partner. When to use: ● There are no organic opportunities for in-app purchases in your app ● You regularly collect preference data about users ● Ads won’t take away from your app UX Examples: Most apps
  12. 12. Advertising Types (1 of 2) ● Search o Keyword intent based o CPC/RPM/CPI models o Best in monetization o Providers: Google, Bing, Yelp, etc. ● Display o Brand-awareness primarily o CPM/CPV/CPI models o Quality & monetization varies widely o Providers: Google, iAd, MoPub, etc.
  13. 13. PlayAds™ from GameCommerce 15 sec game-like ad experiences where users interact with brands and products ★ Fun ★ Engaging ★ Rewarding ● 5-10x higher user engagement ● Platform to generate ad-creatives at scale ● Available on iAd www.gamecommerce.com
  14. 14. Advertising Types (2 of 2) ● Video o Suited for long-form or MM content o CPV (some CPI) o Better monetization than display o Providers: Google, AdColony, Vungle, etc. ● “Native” o UI Native vs. Truly Native o CPM/CPC/CPI o Monetization still nascent o Providers: Facebook, Outbrain, Twitter, Amazon, Yahoo
  15. 15. Advertising Best Practices: ● Relevance is the core of successful advertising. Better revelevance -> Better conversion -> Higher Prices ● Quality > Quantity ● Localize your advertising to make it more relevant using technologies like beacons, Wi-Fi, and GPS - allows real-time mobile ad targeting that connects to real-world customer experiences. ● Clearly mark ads as such ● Don’t let advertising wreck your app - don’t use intrusive ad formats that interrupt the core user experience
  16. 16. Referral network Sponsorships (Incentivized Advertising) You partner with advertisers, who provide your users with rewards for completing certain in-app actions. In this model, brands and agencies pay to be part of an incentive system. Your app earns money by taking a share of the revenue from redeemed rewards. This way, you can incorporate advertising into your app that actually enhances your app’s ability to engage users. When to use: ● Potential advertisers would benefit from funding rewards for your users, who earn these rewards by engaging more with your app. Examples: RunKeeper uses incentivized advertising to motivate its users to track their running activity with their app to unlock exclusive rewards and promotions.
  17. 17. Referral network Pros ● Innovative app business model which can be adapted for many verticals ● This advertising strategy will likely be better received by app users because it is relevant and related to an app’s purpose ● App developers and marketers earn revenue, advertisers get more ad space, and users benefit from free promos ● This form of advertising can be aligned with your app’s conversion funnels Cons ● Mobile marketers need to be careful about what actions they incentivize within their app (Apple has been cracking down on incentivizing downloads and social sharing) ● This app business model has not been as thoroughly tried and tested as the other ones (results and success may vary)
  18. 18. Out-of-app Advertising The Lock Screen is the only screen users see 35-100 times /day How it works: ● Users opt-in from within the app ● Award virtual goods daily to users who opt in ● Users can opt out at any time ● Publishers earn up to $0.25/user/week
  19. 19. Lock Screen User Experience New content every time device is put to sleep Users swipe right to unlock as usual Or swipe left to engage the content and deep-link into app
  20. 20. Statistics ● Apps Are Trending Towards Blended Models ● Advertising is now the most popular revenue model for apps ● Subscriptions are the most profitable
  21. 21. iOS vs Android For Mobile Monetization, Choose Android for Ads and Apple For In- App Purchases ● iOS users are 32% more likely to make a purchase, and spend 10% more than Android users. ● iOS users spending 45% more the Android users on in-app purchases. ● Android typically generates more engagement per app - users will start more app sessions per month (on average by 17%).
  22. 22. Summary As the app landscape becomes more sophisticated, we should expect to see a trend towards more blended models. For instance, you can start with a “free, but with ads” model and then offer users a paid upgrade to an ad-free version, which is a “freemium” approach. The end lesson here is: don’t just do what others have done before, adapt and iterate on each app monetization strategy to make it work for your app.
  23. 23. Resources http://www.phunware.com/blog/11-steps-getting-money-mobile-app/ http://www.forbes.com/sites/ewanspence/2014/05/21/for-mobile-monetization-choose-android-for-ads-and-apple-for-in- app-purchases/ http://venturebeat.com/2014/10/24/4-app-monetization-strategies-for-free-apps/ http://startupgrind.com/2015/03/the-top-6-mobile-ad-monetization-models/ http://info.localytics.com/blog/app-monetization-6-bankable-business-models-that-help-mobile-apps-make-money
  24. 24. For questions or comments, feel free to contact: Nagesh Pobbathi - nagesh@gamecommerce.com Kateryna Sytnyk - kateryna@fract.com Francis Doumet - francis.doumet@adendamedia.com Ramesh Padala - rpadala@gmail.com Jessica Holmes - jessica@foundersnetwork.com

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