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Slides from presentation at #MobDevCon where I talked about pricing strategies and ideas for mobile apps
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A practical guide to pricing mobile appsMany developers think that they only have two options when it comes to monetizing their apps: either charge the smallest amount possible; or make it free and add adverts.This is wrong. There are many ways to monetize your apps. In this session we’ll take a practical look at a variety of the monetization options that are available. Plus we’ll dig deep into pricing strategies and ways to make the most of in app advertising for when they are the most appropriate options for an app.
Matt Lacey @mrlacey http://mrlacey.com/
why?• not a new area: don't expect any magical insights• collection of ideas others have had in and about this
subject• developers often struggle and avoid this subject• there are answers: want to point people to them,
not leave them navel gazing• move from repeatedly asking these questions to
building awesome, sustainable apps• you probably know or have heard some of this
before… • but you may not have applied them to mobile apps
I want you to create awesome, financially sustainable, apps
A story – you’ve been told
Build something quickly
Get loads of downloads
Make millions
Bubble ball
xigxag interactive
A story – expectation
Build something
Then a miracle happens
Make millions
A story – common reality
Build something
Get few downloads
disappointment
reality
no
2/3rds of apps lose money
“the app poverty line”
high costs and low sales
making money
it‘s business
not about coding
"I prefer free apps with adds [sic], cause they target all categories of people. But payed [sic] apps just target well off people"
"For larger business apps, or larger games, maybe it’s better to go with paid options, in order to cover cost and make profit."
“I’ll earn more if I can just get a higher ePCM”
“I’ve got a great idea for an app but I don’t think people will pay for it and I do want to do adverts”
start with the app
build what people will pay for
value
inform entertain provide a service
solve a problem
solve a hard problem
quality matters
crash reports, bug tracking & analytics
monetization
business models
indirectbusiness supported
ad supported
sponsored
loss leader
merchandising
directcharge directly
subscription
trials and upgrades
virtual goods & customizations
additional functionality
charging
fixed costs
what you need
great app updates support
variable costs
fixed + variable + margin
dev + recurring + margin
how much?
what impacts price?Availability of substitutes
Price of substitutes
Necessity
Who’s paying
Brand awareness and respect
Relative cost to buyer
Perceived production value
Culture
Device
OS
Perceived value
Perceived lifespan
Payment options
Seasonality
experiment
IAP
freemium
freemium – 1 app or 2
IAP - easy to experiment
engagement & IAP
x18
IAP – beyond the app store
paying more than once
vary price by platform
Yes,support multiple platforms
vary price by location
piracy
piracy – accept and embrace
phone v tablet
170%
vary price over time
trials
trials – help sales
types of trial
time limited
functionally limited
other?
subscriptions
most effective revenue model
A lesson from charities
retention is key
build in retention and engagement from the start
enterprise pricing
indirect monetization
advertising
most popular revenue model
“If you’re not paying, you’re the product”
If you’re users aren’t willing to pay, perhaps someone
will pay for your users
seen as simple
balance
attention encourage clicks
not impact experience
when to show
placement matters
effective integration is key
Full screen ads generally generate the more engagement and ultimately more revenue
Be prominent but at appropriate breaks and between content
banner ads
cost per A/C/E/I/L/M/V
AcquisitionClickEngagementImpression InstallLeadMilleView
don’t:
optimize for accidental clicking of ads
get in the way
have lots on screen at once
assume it’s a silver bullet
fallback networks
cross promotion
smart targeting
affiliates and referrals
sell your own
sponsorship
games
3 types of player
with time with skill with money
promotion
5 downloads per month
ongoing
“good marketing will make a bad product fail faster”
acquisition
App store promotion
halo effect?
how to get promotionWho you know
Good app
Use latest SDK features – early
Good ratings
High rankings
Good user retention
Good reliability (no crashes)
merchandising
cameos
how to make more revenue?optimize price
more users
more platforms
more marketplaces
more languages
more [positive] reviews
new verticals
other income sources
http://flic.kr/p/9vhF4E
obligatory clichéd image
summary
• Think before you build• Remember it’s a business• Build software to meet a need and don't become a commodity• Build something awesome• Consider multiple monetization strategies