pricing mobile apps

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