Mobile App Monetization
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Transcript of Mobile App Monetization
Content!
Revenue Sources!
Downloads!
Rankings!
Revenue Sources!
Revenue Sources!Processed through app stores!
• Paid downloads!
• In App Purchases (IAP)!
• Subscriptions !
Outside of marketplace!
• Ad networks !
• Private placement ads!
• Other!
Paid Downloads!• Direct correlation to
downloads!
• Fast revenue recognition, viewed in daily reports!
• Subject to refund based on quality & expectations!
IAP Revenue!• Dependent on downloads & purchase
conversion rate!
• Delayed revenue - users need to appreciate app before purchase!
• Refunds still possible, but generally lower rates!
IAP Revenue (cont.)!• Conversions are a function of demographics, app
type, quality of app, etc.!
• Infinite purchases skew mean conversion rates - Clash of Clans gems can be purchased forever by outliers!
• IAP on paid download apps generate higher conversions [those willing to pay were filtered], but downloads will decrease compared to freemium !
Subscriptions!• Recurring revenue!
• Increasing revenue, depending on subscription attrition rate!
• Compelling content additions!
• Aided by laziness to unsubscribe!
• Refunds for recent payments possible based on store, geography and time of request. !
Ad Networks!• Multiple advertisers!
• Admob (Google) - arguably the leader!• Chartboost - games only !• Dozens/hundreds of others: iAd (Apple), Millennium, Flurry (Yahoo!),
Leadbolt, TapJoy!• Private exchanges, real-time bidding, or black box algorithms!• Multiple impression formats!
• Banner - less intrusive, lower click through rates!• Interstitials - pop ups can annoy users, higher click through rates!• Video - captive audience, highest click through rates!
Ad Networks (cont.)!• Revenue is a function of numerous parameters:!
1. Downloads!
2. Usage or average session time!
3. Network’s ability to source (fill rate)!
4. Pay per click or pay per install!
5. Demographics of your users matching demographics of advertisements!
6. Accidental clicks!
7. Placement - app open/wake generally do better per impression!
Ad Networks (cont.)!• Revenue recognition in pseudo
realtime, seen via dashboards!
• Payment schedule varied!
• Many networks allow you to allocate inventory for cross promotion!
• Likely to lower app rating and complaints may show up in reviews!
• Caveat: drives traffic AWAY from the app!!
Private placement!• Have to form partnership on your own!
• Most likely done if your app sits in a niche!
• Should generate higher revenues!
• Steady revenue, but at liberty of your partnership!
• In most cases, ad networks will be a better option!
Other!
• App’s value is derived from product or service outside the app itself!
• Examples: Uber, AirBnb!
• LTV (Lifetime Value) of customers likely to be greater than acquisition costs!
Downloads!
Low Impact Downloads!• Word of mouth - rarely impactful!
• Social media shares - needs to go viral or have large conversion % to be impactful!
• Web search - needs to be unique!
• Cross promotion - perhaps valid for app launch, otherwise there is more value elsewhere for the effort!
Advertising Downloads!!
• Relatively easy to drive large number of installs via mobile advertising networks (see revenue section)!
• Cost dependent on network and numerous other factors!
• Free apps cost $.50 - $2 per download, higher in large quantities. !
• New network channels (eg. vine promotions) may generate lower cost per install (CPI)!
• Can track installs for Lifetime Value (LTV) via IAP, ads, etc.!
App Store Downloads!• Roughly 60% of all downloads from these
sources:!
• App store featured - Huge driver, but need to convince apple folks. Need top notch design and usability. Helps greatly to be unique.!
• Top charts - Big driver, need to rank high!
• Keyword search - Big driver, need to rank high and optimize keywords !
Rankings!
Rankings!• Exact formulas unknown but
probably based on:!
• Ratings and reviews!
• Downloads (dependent on total and recent)!
• Revenue (dependent on total and recent)!
• Keyword rankings likely dependent on downloads after discovery via that keyword!
• User engagement metrics!
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