Pricing Strategies for iOS Applications

By: Shailendra SinhasaneTwitter: @sunshail

Mobisoft Infotech Pvt Ltd.

Why Monetize?

• Generate money

• How?

– Compulsion Loops, there are ways to draw user back into the app

– Engagement, does it have engagement elements that could be monetized, i.e. virtual currency?

– Value, is it worth your users’ time?

Some numbers ~

• 40-45% of all iOS revenues are from in-app purchases

• Only 10% from advertising

• Near about 50% of the games downloaded from the app store were free with in-app purchase integrated

• In-app purchases will grow exponentially in coming years

Estimated download volume needed for Top 100 ranking:

App Store Position Est. # Downloads Needed

Top 10 ~50k-150k

Top 25 ~30k-50k

Top 25-50 ~17k-30k

Top 50-100 ~10k-17k

Sub 100 Free 100s-depending on category popularity

Download estimates

-Source: AdMob, Inc.

Models

1. In-app purchases

2. Subscription

3. Ads

4. Location-based offerings

5. Social media sharing and aggregation

To do1. Try various in-app models to find the combination that

maximize your revenues

• Games: Subscription based casual gaming package + premium payment for sending best scores

• E-books for kids: read once for free. Pay to read again

• Security: free trial (30 days) . Paid license for 1 year period

• Video: pay per gallery

2. Freemium strategy

• Strongest marketing play

• Risk reduction

• Developers should be focused on finding consumers who are willing to pay, not trying to completely satisfy free-rider consumers

In-App single purchase

Pros:

• This is probably the easiest path to implementation and launch and it's straightforward and proven

• Virtual goods/currency through In-App

Cons:

• No ongoing revenue stream

• No access to user data - makes selling advertising difficult.

One potential workaround is to build in-app surveys,

which pushes data back.

Subscription - IPros:

• Revenue is sustainable

• Renew just as other web based subscriptions

• Easy extendable as an add-on

Cons:

• Requires user management solution

• Requires users to leave the app and visit the publisher's website to subscribe

• Conversion rate lower than in-app purchases

• Success :

lifetime value of a subscriber > revenue lost from lower conversion

Subscription - IIApple's subscription policy for publishers:

• Apple still gets a 30% cut of any subscription a reader signs up for inside the App Store.

• Publishers can now offer an app subscription for a different price than what they might sell their app for in the App Store.

• Publishers can't link to an external-to-Apple location that sells a subscription within the app.

Advertising

Apple: iAd platform – Adv as an app

Third party : adMob, Medialets etc

Pros: Easier to command advertising premiums and less pressure to live up to metrics

Cons:

• Mobile budgets just aren't well-defined

• Apple changes strategic decision with third party ad integration

Location Based Offerings

Pros: Awesome mobile offerings into a high-fidelity advertising environment

Cons:

• Complexity in integrating these systems

• Requires the device be connected to the internet

Social, Sharing & Aggregation

Pros:

• Cost-effective

• Viral marketing

• Better user engagement

Cons: Getting advertiser support on a product as nebulous as this is challenging

Other payment integrations

• Paypal API integrations

• Carrier billing option – Very easy for users to pay

• Virtual credits

• Google Checkout

other mobile platforms

1 MoVend payment platform

• Easy integration – Supports Android, BlackBerry, Windows Phone7

• Sales Track

• Better user engagement

2 Bango

• Supports all mobile

platforms including

iOS

• Operator billing

Thank You!

Connect:

Email: shail@mobisoftinfotech.com

Twitter: @mobisoftinfo

Blog: mobisoftinfotech.com/blog