Monetizing Archives -

Every mobile developer out there is worried about the business model that will follow.

Creating a cool app is only the first step in creating a successful application that can be monetized. Mobile developers are looking for more revenue without compromising the user’s experience and the quality of their app and as a result this tradeoff makes choosing the appropriate monetization model for an app a painful experience.

A lot of developers have to find the revenue that works best for their app the hard way. That is why we will highlight the most important mobile monetization models that exist , focusing mainly on mobile advertising models, which seem to be quite popular among mobile developers nowadays.

Mobile Advertising

Mobile app developers are fully aware of the big, ongoing debate regarding ad methods and tactics, compromising user experience level, revenue effectiveness, intrusiveness, and user drop-off among different mobile ad platforms. Developers are usually overflowed with terms such as eCPMs, fill rates, CPI, CPA, CTR, and others.

But what are developers actually looking for? Can a current mobile ad platform bring enough revenue to a developer? Many developers usually try different mobile ad platforms or even a combination of them to find which ones monetize better their apps.
What a developer is actually looking for:

1) High and efficient revenue

2) Not compromising app’s user experience

3) Easiness of SDK integration

4) Reduce app’s users’ drop-off

The above aspects are immediately affected by the methods and techniques ad platforms use to deliver ads to the users and that is why we choose to outline the most popular in the following sections.

Banner Ads

Banner ads are one of the most widely used mobile advertising methods. A banner is placed somewhere in the UI of the app (therefore it usually requires change of the app’s UI). There are different kinds of banners and sizes according to the monetization platform used. It’s up to the developer to place them in a place within the app that will deliver better conversion rates. Their content varies from text to rich media. Some types of banners include expandable, floating and interactive banners. A few of the top players in this category are AdMob, iAd and Millennial Media.

Interstitials

Interstitials are usually placed between transition points within or while entering or exiting a mobile app (e.g. the change of a game level, app launch, app exit and others) and are usually rendered as full screen or big popup. Some of them render videos, images, or other rich content. They are usually used to drive downloads of another app, visit a website, show a video, and others. These kinds of ads are usually more expensive for the publishers, deliver higher revenue when used appropriately by the developers, and get more attention by the users. Well known players at this category are TapJoy, Flurry, LeadBold, RevMob, and AdColony, while Chartboost enables developers to cross-promote directly with other apps, providing them this a way an option to drive installs on their own apps.

Offer Walls

Offer walls is a monetization model where users are prompted with a landing page, which is a full screen wall of targeted offers that provide users virtual items, credits, features, or levels unlocks in exchange for registration, downloads or other. Some of the key players in this area are Tapjoy, StartApp and {FIKSU}.

Notification Ads

Notification ads are one of the most intrusive models widely used nowadays. Users receive a notification for an ad even without having the app open. This kind of model usually pays better for the developers. However, the excessive use can really end up with a lot of unhappy users of the app. Some of the key players in this area are Airpush and LeadBold.

Surveys

Surveys as a monetization method for mobile is a new and emerging trend with very promising features. Surveys are rendered as an overlay within the apps and, therefore, developers do not have to change anything in app’s UI and flow. Since surveys are rendered as an overlay, integration ends up as a drag and drop with just one line code activation. Developers are paid for each completed survey through their app and users are prompted to take a survey in order to participate into draws and win prizes. The key player in this area is Pollfish, which claims that surveys deliver revenue up to 20 times more than classic ad clicks and has been working well along with traditional ad networks.

Lock Screen Ads

Another emerging trend in mobile ads is having ads on smartphone lock screens. Users can choose either to engage or not with the ad and if they do so they get paid with real money. One of the downsides of this approach is that these platforms can focus only on Android. Some of the key players here are AdLatte and Locket.

Virtual and Real Gifts Rewards

Reward app users for achievements, tasks completed or even for using apps with virtual or real gifts. Some of the key players in this area are Kiip and Avocarrot.

Other

There are other monetization models for ads that are not listed in this article, such as audio ads, capture forms, app icons, caller ads, widget ads, etc.

Paid Applications

Developers often choose to simply set a price for the app that users will have to pay upfront. A higher price for an app does not reflect more revenue. With a paid app, a developer gains a new customer, with much higher expectations than a regular mobile app user, who also expects free lifetime updates. Usually, for the majority of the apps users get disappointed easily since bug free operation or quality app experience and updates frequency do not reflect the purchase expectations. Another notable fact here is that users do not pay for apps from new developers and tend to buy them from well-established ones. In addition, crossplatform wise this is a model more successfully used on iOS rather than on Android platform, where users seem to prefer staying on free applications. Finally, it is worth mentioning that app stores keep a percentage of developers’ revenue for each purchase.

Premium Models / In-App Purchases

The developer provides the basic features of the app for free and then requests a price to unlock the rest of the app functionality or provide enhanced features. In-app purchases are a flexible model that can be used with free (premium) or paid apps. Different types of in-app purchases exist. Users are taking advantage of in-app purchases to unlock/proceed to new levels, receive new features, use new weapons in a game, or just receive updates. Only quality, useful or engaged apps can be used with this model.

Subscriptions

Subscription model works by distributing the mobile apps for free. The user has to login into the app using an account that is usually charged for the provided service. The model works either for delivering live-feed data to the user in exchange for a monthly payment (e.g. newspapers subscriptions, magazine subscriptions etc.) or for using software as a service. This kind of model is usually used in combination with web solutions, something that often requires much more effort both on the developer’s side and on customer/user’s acquisition.

Choosing the right monetization model for an app is one of the key decisions towards success. The right choice depends heavily on app’s content, quality and engagement potential. In most cases traction plays a significant role in app monetization. Capitalizing on this traction the right way is one of the major decisions in a mobile app’s monetization strategy.

Giannis Zaoudis

2392

Anatomy of a Startup Pitch

You can find some great pitches on the internet, but what I wanted to know is how those pitches evolved to become what they are. Since I couldn’t find what I was looking for, and having just come back from Mind the Bridge Bootcamp, I’ll write about our personal experience.

I’ll talk about our initial pitch followed by the one we had after the weekend of intense mentoring sessions. Special thanks goes to James C. Roberts III, who generously took hours from his time to help us.

Tagline – what does your product do?

You can compare your product to another that people are familiar with. For us it’s something like Dropbox meets Mailbox meets Document Management System or even GitHub for documents. But once you do this, you’ll be recognized as the copycat. We didn’t want that and went with: “Collaborate on documents more efficiently.”

While opening with your product, you can inform the audience about crucial information about you and your startup. We said the following: “Let me tell you 4 important things about my company – we’re incorporated, we have seed funding, we’re in private beta and our team has already done this before.”

How does your product do that?

After the introduction, provide a statement of the most important aspects of your product — a thesis statement of sorts.

Here’s what we said: “We help you focus on what really matters when collaborating on documents and that’s writing. We’ll take care of everything else.”

What Problem Does It Solve?

The next slide should be the problem or the pain point your product solves. In our case there were several problems we’re addressing so we decided that we should skip it all together for now because it would take too much time. After all, we had only 5 minutes to do the presentation, so spending more than 15 seconds on the problem wasn’t an option.

Product Features

We had five slides in version one of the presentation. We jumped straight into the key features, with each slide showcasing one of the key features of the system, and the last one is a summary of all of them. But this didn’t help the audience understand what the product does. Most of them thought of Google Docs, but couldn’t see the difference. The thing with DoxBee is that it’s a little different from other products in the sense that it’s a combination of key features that makes document collaboration more convenient, and we needed to point that out.

Hence, we changed it to this.

Only when the audience became familiar with it, we got into the specifics of each key feature. Since we noticed that most of the mentors associated DoxBee with Google Docs, we used this slide to explain the differences between the products in one sentence, before getting into explaining ours.

We ditched the slide with the list of features entirely since it only confused the audience.

Now, after explaining the product, we told them where we were.

Where are you?

We’ve included a word or two about the possible future milestones. This is very important. First, you need to tell them that you’ve thought of the future of the startup and where you want to go with it. You will need the money for getting from milestone A to milestone B. So, think hard about this one.

Market size

We’re targeting a broader audience and that’s not a good thing in investors’ eyes. Try to focus on your niche and provide numbers. Aim to a total market size of billion dollars.

Competitors: Who are they and what are you doing differently?

When you establish the fact that there’s a huge market potential, you need to explain the obstacles to reaching that potential. Usually, this is a comparison table between your startup and the competitors. That’s OK, but, in our case, there are lots of competitors and the audience is familiar with this fact. That’s why we pointed out two key differences: “There a number of companies in the space. Tens of them. But they all have two crucial differences – they make users learn new workflows and they keep them in a closed system.”

How will you make money?

The next part is about how you will monetize. For us, it’s from subscriptions from enterprises of all sizes. This is one of the key slides for potential investors. Remember, they know it’s still early to know this, but you need to prove that you have some ideas. Here’s what we’ve said: “It’s still early to talk about pricing but we’ll have SMEs and large enterprise packages. We’re going to test them and determine the prices once we have a product market fit.”

If we had a price and a little more data about users, then we’d follow up with the finances. There should be a hockey stick graph with revenues and expenses for the next five years. The numbers should be rounded. Make sure that you have at least some ideas on the KPIs.

Team: Who are you and why should we trust you with our money?

As many of our mentors said, the team is one of the strongest parts of a startup. I’ve also read and heard this numerous times before, the team is what matters most. Ideas can change, but teams rarely do.

Here’s a quote from one of the mentors: “Do you know who gets funded in Silicon Valley? Serial entrepreneurs, even failed ones.”

That’s why we have two slides for the team. The first one is with the individual accomplishments or impressive facts about a person. It should be one sentence summary. The second slide consists of the credentials. There’s usually text here with smaller fonts. But, on these slides, that’s OK. I even asked, if I should I put a university that nobody knows about onto these slides. The answer was: “Yes, nobody cares.” So, go ahead and put your credentials even if you didn’t study in Stanford.

At the end, remember that pitching is about reducing the risks for potential investors. If you can convince them that you thought thoroughly about your business although you don’t have all the answers you’ll get much better terms and close the deal faster.

Kiril Jakimovski

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Category: Monetizing

There are 2 posts published under Monetizing.

Can You Really Make Money Out of Apps?

Every mobile developer out there is worried about the business model that will follow.

Anatomy of a Startup Pitch

You can find some great pitches on the internet, but what I wanted to know is how those pitches evolved to become what they are. Since I couldn’t find what I was looking for, and having just come back from Mind the Bridge Bootcamp, I’ll write about our personal experience.