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.
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Monetization Still A Mystery
- 1. App Monetization, still a mystery ?Praveen Alavilli@ppalavilli 1
- 2. “chase your dream, money will follow” 2
- 3. Still a mystery ! 3
- 4. History of Monetization at YouTube 2 Billion views a day 3rd most visited website Localized in 23 countries across 24 different languages 15 The average number of minutes people spend on the site each day 24 Hours of video uploaded to YouTube every minute 45 Million home page impressions in the U.S. every day. 70% of YouTube traffic comes from outside the U.S. 100 Years of video scanned by copyright management technology every day 1700 Years it would take you to watch the hundreds of millions of videos on YouTube Founded in February 2005 Aug 2006 - First advertising concepts launched: Participatory Video Ads (PVA) and Brand Channels Sep 2006 - Underground music contest with first major advertiser: Cingular Aug 2007 - InVideo Ads (overlays) launched Dec 2007 - YouTube Partner Program launched Mar 2008 - YouTube Insight (analytics tool) launched Oct 2008 - Click-To-Buy e-commerce platform launched Nov 2008 - Promoted Videos launch Nov 2008 - Pre-Roll ads launch Jan 2009 - Homepage ads expanded from 1 to 7 formats (IMAGE: Homepage ad grab) Aug 2009 - Individual Video Partnerships launch Nov 2009 - Skippable pre-rolls test Dec 2009 - Video Targeting launch Mar2010 - YouTube mobile ads launched Source: https://sites.google.com/a/pressatgoogle.com/youtube5year/ 4
- 5. What is monetization ? 5
- 6. 6
- 11. Relies on Unique impressions
- 12. Consumers do not
- 14. want to view advertizing
- 15. need advertizing
- 16. High supply – low demandhttp://techcrunch.com/2009/03/22/why-advertising-is-failing-on-the-internet/ 8
- 18. Relies on popular partner offers
- 19. Consumers do not
- 21. want to view advertizing
- 22. need advertizing
- 23. want to stop what they are doing9
- 26. Not reselling10
- 28. e/m-commerce Selling of goods and services Oldest of all (since 1970s) Reseller platforms Marketplaces Social commerce Merchandise in social apps and games P2P Better returns/commissions Have to deal with shipping, returns, etc. Merchant on-boarding 12
- 29. Freemium Free + Premium Popular monetization model Free up to certain thresholds (usually usage) or free basic service or for non-commercial use Charges for additional usage or premium service Typically Ad supported Better customer acquisition Direct revenue Flickr/skype/Box.net/Vimeo/… Free cannot be forever 13
- 30. Pay as you use One of the popular monetization models for Cloud No fixed base price Customer gets charged only for the resources/services utlized Combine with Freemium AWS/Google App Engine Usually an economical option for customers 14
- 31. Premium Content/Memberships Content available for an extra fee E-books, research, articles, brand, photos, video, etc. Typically micropayments Wall street journal Forrester research Kindle Ooyala LinkedIn 15
- 32. Subscriptions Fixed/variable amount recurring payments Less friction Better user experience Popular in physical world – TV/Telephone/Internet/Magazines/publications/etc… Suitable for both content and service based use cases Salesforce, Netflix, Apple Developer Program, etc. 16
- 33. Digital Goods/Virtual Currencies Non-physical or digital items Popular in Games, Social Apps, etc. Virtual Gifts, in-game currency, virtual goods Higher conversion rates Lower fulfillment expenses Helps in customer engagement, retention and acquisition Zynga (farmville) Playspan SocialGold Facebook Credits 17
- 34. 18 Roughly 12% of Americans, or more than one in 10, have bought a virtual item at some point in the last 12 months – according to a study by analyst firm Frank N. Magid Associates
- 36. engagement is the key !
- 37. able to accept and process payments efficiently
- 38. enable consumers to be able to pay quickly, securely and easily19
- 39. many players… 20
- 40. a quick look at what Online Payment Services Provide 21
- 41. Payflow Authorize.net CyberSource BrainTree WorldPay Recurly Spreedly Chargify Zuora Freshbooks Services Google PayPal Amazon PayPal Amazon 22
- 43. Provides PCI Compliance, Fraud and Risk detection & protection
- 44. Secure and Privacy enabling
- 45. Provides flexibility to support new/non-traditional use cases
- 46. API vs Cookie cutter solution based on your needs
- 47. Provides best user experience
- 48. Economical 23
- 49. Where do payments fit in ? Service Payments (rent, parking, …) Expense Sharing Social Commerce P2P / Social Payments (group gifts, registry,…) Healthcare Digital Goods Virtual Currencies Multi-Merchant Marketplaces Mobile and Device Payments (NFC) Games B2B Invoicing Govt. Mass Payments – Affiliate fees Bill Pay 24
- 50. Chase your dream and monetize along the way For more info @ppalavilliwww.x.com@paypalx 25
Editor's Notes
- Every developer and entrepreneur follows the principle
- But unfortunately it’s still a mystery on how to monetize or build a continuous revenue stream to help you understand here are a few monetization models that I am sure would help most of the use cases
- According to wikipedia “Monetization is the process of converting or establishing something into legal tender”
- Really falls into 2 categories – while indirect has been popular not many actually make any money out of it. Having a direct monetization model helps you in building a continuous revenue stream that not only help in sustaining your app for long time but also might make you rich Causium: http://www.forbes.com/2010/09/07/atlassian-software-facebook-technology-freemium.html?partner=yahootix
- CPM means cost per thousand impressions and refers to the amount you are paid for showing 1000 ads.A cost per click (CPC) ad pays you a certain amount—typically between a nickel and fifty cents—each time a user clicks on an ad. As with a CPM ad, you may only be paid for the first unique click from a particular user, and your ad agency may take a percentage.CPA (cost per action) ads require more of a commitment from the user. You are paid each time a user completes a particular action—for example, completing a survey, signing up for a subscription, or buying a product.Which ads you choose to run depends on your audience, and you'll need to spend some time experimenting to determine what works best for you. In general, you should run as many CPM ads as possible—assuming they are not priced too low to bother—and experiment with CPC and CPA ads to fill the remaining ad inventory.
- An affiliate program is one in which you earn a commission for items sold through your site. Normally, you put a badge or text link or some other advertisement on your web site. When visitors to your site or blog click through the ad to the site and make a purchase, you receive some of the money from that purchase. This can be either a percentage of the sale, or a flat fee for each sale made. Most affiliate programs, though, offer a percentage of the sale.
- Virtual goods are non-physical or digital items used in online communities or online games. Virtual goods have become popular recently with the rise of social games, which are played by more than 200 million people each month on Facebook and other social networking sites. Popular titles include Farmville, Bejeweled Blitz and Happy Aquarium. Virtual currency is payment used within social games and applications, usually for upgraded features. The most common is Facebook Credits, which are accepted at hundreds of popular Facebook games and applications, including Farmville, Bejeweled Blitz and Pet Society.
- but we know it can and will be done – there are a lot of good examples – Netflix, Amazon web services, Zynga, playspan, SocialGold, etc.
- A very important result of this is that a developer has to learn, code and deploy different integrations with each and everyone separately. It’s just painful.
- if you want to chat more about monetizing your apps or if you want to find more about what PayPal provides.