Monetize Your App - by hristo neychev

MONETIZE YOUR APP

by Hristo Neychev

facebook.com/HNeychev linkedin.com/in/HristoNeychev twitter: @HristoNeychev

So, you have created this amazing, useful app and now you want to

make some money with it!

What is your favorite cocktail?

My favorite cocktail

SEX ON THE BEACH

Now…let’s talk about

SEXY PROFITON THE BEACH

SEXY PROFIT ON THE BEACH

30% analysis

20% forecasting

40% marketing

10% finance

Build it and they will come!

Profit = Revenue – Cost

ProfitRevenue

PROFITABILITY ESTIMATION

Infrastructure Cost Hosting Bandwidt

h Storage

Staffing Support Marketing Development

MarketingBudget

Social Media

Revenue

Number Paying Users

New Paying Users

Total Number of Users

Conversion Rate (to

paid)Churn

Average Revenue per User (ARPU)

Buy the App

In-App Purchases

Subscription Fees

Revenue

Number Paying Users

New Paying Users

Total Number of Users

Conversion Rate (to paid)

Average Revenue per User (ARPU)

Buy the App

In-App Purchases

Subscription Fees

Infrastructure Cost Hosting Bandwidth Storage

Staffing Support Marketing Development

MarketingBudget

Social Media

POTENTIAL REVENUE SOURCES

• Pay-per-download

• In-app advertising

• In-app purchase

• Affiliated web services

• Subscriptions

• Sponsorships

• Promotions

• Lead generation

• Analytics

• Affiliate sales

PAID APPREVENUE SOURCES

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

PAID APP

One time charge

Reduces adoption

PAID APP

One time charge

Reduces adoption

PAID APP

One time charge

Reduces adoption

PAID APP

JUN '10 JAN '11 JUN '11$0.00

THE 300 MOST POPULAR PAID GAMES

www.distimo.com

One time charge

Reduces adoption

PAID APP

PEOPLEEXPECT FREE

UPGRADES

One time charge

Reduces adoption

PAID APP

One time charge

Reduces adoption

FREEMIUMREVENUE SOURCES

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

FREE(mium) APP

Set smart tripwires

FREE(mium) APP

• Conversion rates are in the range 0.5% to 4%

• Look at Pandora, Dropbox, Evernote, Skype, etc.

• Shoot for 1-2% conversion rate

Set smart tripwires

FREE(mium) APPEXAMPLE:MC = $1ARPU = $5CR = 1%

CALCULATION:Freemium users: 1,000,000

Monthly Revenue == $500,000(1,000,000 * 1% * $5)

Monthly Cost: $1,000,000

SEXY PROFIT => UGLY LOSS

Set smart tripwires

FREE(mium) APP

Set smart tripwires

FREE(mium) APP

Set smart tripwires

• Features• Capacity• Effort • Support

• Usage quota• Number of seats• Customer class• Bandwidth features

LIMITATIONS BASED ON:

IN-APP ADVERTISINGREVENUE SOURCES

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

IN-APP PURCHASESREVENUE SOURCES

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

In-App Purchase

FREEMIUMFREE

IN-APP PURCHASES

Several options

An example

IN-APP PURCHASES

Several options

An example

IN-APP PURCHASES

2011 2012E0

AdvertisingRevenue

IAP Revenue

http://www.flurry.com

REVENUE POTENTIAL

82%77%

23% Several options

An example

IN-APP PURCHASES

Session 1 22%Session

2-9 34%

Session 10+ 44%

FIRST IN-APP PURCHASE

http://www.emarketer.com

Several options

An example

AFFILIATED WEB-APPREVENUE SOURCES

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

AFFILIATED WEB-APP

AFFILIATED WEB-APP5 Common Mobile Search Behaviors

http://www.spydertrap.com

1. Fewer keywords

2. Location is key (GPS, Google places)

3. Mobile experience

4. Time (more frequent on evenings and weekends; the opposite of desktop search behavior)

5. Apps vs. Browser searches 27% vs. 73% but growing

SUBSCRIPTIONSREVENUE SOURCES

SUBSCRIPTIONS

Good for content based apps (newspapers…

…magazines, and comics)

Not limited to those

Low conversion rates (1-5%)

Relatively reliable revenue

SUBSCRIPTIONS

SUBSCRIPTIONSSUBSCRIPTION BASED GAMES

http://www.insidemobileapps.com

SUBSCRIPTIONS

Low conversion rates

SUBSCRIPTION CONVERSION

RATE 1-5%

SUBSCRIPTIONS

• Annual subscription• Monthly subscription• Automated recurring billing• Subscribe for a service/feature• Subscribe for support plan• Good/Better/Best account

options

IDEAS:

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

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

…have FUN on the beach!

And last, but not the least…

Thank you!

facebook.com/HNeychevlinkedin.com/in/HristoNeychev

twitter: @HristoNeychev

Monetize Your App - by hristo neychev

Documents

Transcript of Monetize Your App - by hristo neychev

Hristo Botev

Monetize yourself

Pitching for policy impact - INCLUDE Platform · Pitching Skills (Pitching to Investors) - by Hristo Neychev Slideshow Pitching Skills (Pitching to Investors) - by Hristo Neychev

The Hristo Vitchev Quintet (Out and About Magazine)

Hristo Kolev "My Leadership Style"

Hungary Economic Overview Hristo Georgiev Dilyan Dimitrov.

Distribute and Monetize APIs

Monetize Your Facebook Page

Hristo Petrov National Conference Business Management

Chalkboard Challenge Hristo Botev School, village of Sadina.

Mobeye - Monetize Live Events

Monetize Yourself!

Our school – hristo botev high school

Monetize Your Website

Optimize & Monetize Guest Internet

Monetize Your Apps

Market and Monetize Presentation

Three projects in the “Hristo Botev” public school

Hristo Petkov - CV

Hristo Botev school Nova Zagora