revenue models & monetization strategies for early-stage social apps
DESCRIPTION
The goal for most early stage companies should be to focus on building the product, not on optimizing to get the most money out of current traffic. Without a successful product and active users, a finely-tuned revenue model doesn't amount to much. In the long run, decisions that drive product growth and user engagement are what will drive more users, more user engagement, and ultimately more money. Dan uses the 80-20 rule to talk about how to split up time and evaluate revenue opportunities; in most cases, you can optimize your current revenue to 80% of its potential using 20% of your time.TRANSCRIPT
Monetization Strategies & Revenue Models
for Early-Stage Social Apps
Dan Greenberg
Founder, Sharethrough
7.8.2009
I have a small Facebook application... ...how much money should I be making?
If your CPM’s are in the $2-3 range for 728x90 banners, you’re already doing really well.
Don’t you have more important things to worry about, anyways?
Focus on consistency, not maximization.
Putting out 20% effort making more money gets you 80% of the way there.
You don’t need complicated tools until you’re big.If you want to make more money, you need to scale your product.
More users, more user engagement = more money!
Once can justify hiring a full time employee to manage monetization, then you’re ready to start maximizing. Until then, focus on building your product & proving revenue models.
Create new revenue models for your apps.
Finding a viable revenue model early helps you scale later on.The Virtuous Cycle:
In the best case, you can make enough $ per user to justify buying more users for your apps with your revenue.If so, double down on marketing!
Think about incremental revenue streams and monetization opportunities, not fine-tuning existing ones.
Create new advertising models for your apps.New Revenue Models.
Virtual Currency (let your users give you money) Sometrics, Offerpal, Gambit, SuperRewardsVideo Integrations (make money when your users watch videos) Sharethrough, RockYou, VideoEggIn-App Interstitials (integrate an ad impression as part of the flow) Sharethrough, Cubics, Do it yourself
Brand Takeoevers (pimp out your whole app with a brand campaign) Appsavvy, Direct relationships
Sponsored Content (inject sponsored items into the app) Viximo, AdNectarOr..........Invent Your Own!
Measure ad revenue against user engagement.
Make sure your ads aren’t stunting your growth.How?
A/B test your invite rates, time on site, pageviews/visit, visits/month
Cut out revenue streams that are hurting long term performance
Going Direct: Brand your apps into a niche that advertisers actually care about.
Apps with well-defined user segments get premium CPM’s.And they often get to work directly with brands and ad agencies, even if they don’t have that much scale.
Circle of MomsMesmoTV
Advertisers don’t care about advertising in “fun quiz apps,” they care about marketing to “30-40 year old soccer moms with time to spare.”
Working with Partners: Choose a limited set of hands-on, trusted partners.
Align yourself with the leaders in innovative social marketing.Pick a few to work closely with, and innovate with them.
Some of our favorites: Sharethrough, Gambit, RockYou, Appsavvy, SocialCash, VideoEgg, Sometrics