Ask HN: What are your app monetisation strategies?
Hey guys - I've been an Android developer myself for over 4 year now. One of the biggest pain points has always been the monetisation part - which I've always felt is out of my control.
I've been focused mostly on free apps with ads - mostly Admob - but the little control over what ads are displayed, their format, etc always seemed to bother me. That's why I've started working on an ad network for mobile apps - where the advertisers buys directly from the app publisher the ad spot - and the publisher has full control over which ad is displayed and when.
I wanted to ask you what monetisation strategies to you have for your apps and if you've ever felt the same way when you added ads in your app.
107 comments
[ 4.7 ms ] story [ 307 ms ] threadI like the idea in concept, but as an advertiser this intuitively tastes like a strictly worse product.
Doesn't this model mean I now have to vet the inventory (users) of the app -- another cost, as well as structure my campaign around the publisher's willingness to serve my ads -- additional variance and risk? This is no doubt great for app publishers on paper, but why is this better for customers? That is, advertisers?
Also - I don't see the publisher's willingness a risk factor if the product, service or brand you want to promote is a relevant one for app user base.
If you're curating for your idea of quality, you're controlling which ads publishers can display where. This isn't a bad thing; it's how virtually every ad network operates. But then what's different about this approach?
The risk factor is that with a traditional ad network, I know I'm buying a certain number of impressions in a certain period of time, with analytics. But if inventory is doled out whenever my publisher partner (or their algorithm) feels like it, then my holiday promo campaign is a crapshoot and I might have wasted both money and (worse) time. I'd pay a premium to get rid of this risk.
I feel like the TinyAds network is more about buying influence and exposure and not a fixed number of impressions (that basically translates to the number of times an ad was loaded and that's it).
Also - I'm not sure why would you think your inventory is doled out since the app publisher accepted your ad and you have the guarantee of the ad being displayed on their app?
With this network - if an advertisers wants to buy an ad slot - but you don't agree with the product or service for some reason you're just going to decline the ad.
> • Facebook and Google have the most inventory and are still growing in terms of both users and ad-load; there is no temporal limitation that works to the benefit of other properties (and Facebook in particular is ramping up efforts to advertise using Facebook data on non-Facebook properties)
> • It is cheaper to produce ads for only Facebook and Google instead of making something custom for every potential advertising platform
> • Facebook and Google have the best tracking, extending not only to digital purchases but increasingly to off-line purchases as well
0. https://stratechery.com/2016/the-reality-of-missing-out/
1. https://stratechery.com/2016/how-facebook-squashed-twitter/
> That's why I've started working on an ad network for mobile apps...
I think that high-quality apps have a loyal and passionate audiences - a smaller one for sure - but advertisers can rest assured they have access to the best audience money can buy.
I've never thought in terms of Facebook or Google's scale and I actually want to take a more anti-Facebook/Google approach where the amount of user tracking is inexistent. Just track the ad performance and that's about it.
My understanding is that larger companies with bigger ad spend don't have time to hand-pick each app or web page. (Using human labor to pick apps and pages can significantly raise the cost I presume.) Perhaps there is a marketplace for smaller advertisers here.
I was thinking in terms of a more human approach where advertisers are actually looking to connect with their potential users.
App publishers don't sell impressions - they sell influence by allowing the advertiser to get a spot from their app real-estate.
It's certainly possible, but not scalable. If your goal is to support your own work and you have the hustle and editorial eye, you can make money.
Keep in mind that the big players can wipe you out in a second. Overcast exists because Apple's benign neglect of podcasts. They can wake up at anytime and wipe the app and ad market out.
I'm not sure I've understood - what's not scalable? Selling ads by yourself or using a network that helps you sell ads?
No, it can still be done, if you're in a niche for which it doesn't make sense to have a more automated approach (either because it's too small to justify the investment in building an ad network, or because it requires higher-touch interactions).
It sounds like what you want to build is a niche ad agency. It wouldn't be a software/technology business, but a sales business. Your first step should be to get high-quality apps to agree to place high-quality ads that you've sourced - that will be infinitely more difficult than building an ad network (if that's what you're doing). And if you can do that, you can probably run the business at first using Excel, without writing any code.
The audience will be more open to ads as well if delivered right. For e.g. A sports app with a limited audience will be interested in knowing more about a particular sport equipment or a sports drink.
But let's not just throw banners here and take them to new links / apps; show them meaningful info in the app itself, when users click on the banner.
I am planning to implement this approach in my app cricheroes.in - will update on how that is working.
contract work is not a monetization strategy, it's a different job.
Sympathies for the struggle, but I'm not sure why you're convinced "survival" "starts with doing the right thing", discarding "monetization strategy" and cursing "advertising bullshit". That's not the path to "somewhere that matters", it's just the path to a failed business venture.
Its unlikely the then young Adobe would have needed to do much if at all any marketing to get companies behind PostScript, because it was ahead of any other solution of its time. Many people welcomed it with open arms, and it became the de-facto standard quickly at the time.
Adobe just built a superior product. And then they all showed up to get some.
You can say the same of Netscape in the 90s before Internet Explorer, you could say the same of MySpace in the early 200s as the superior social network to what came before it. (Of course, this is before FaceBook, which through targeted marketing at first to college kids, proved to usher in a different era, on many fronts, in 2006). There are other numerous examples.
Fast forward to post Web 2.0 hay-fever of the mid 2000s into the Gold Rush stage of the App Economy, by 2010, there was a clear shift. Apple & Google consolidated on mobile. The Desktop, a traditional stalwart of Microsoft, began its small but inevitable decline of mindshare (and eventually, real dollars) in the minds of consumers and businesses alike. Web apps made the desktop OS less relevant (but not irrelevant, mind you). The field became crowded. Quality wasn't the only measure of success anymore. The economy of software shifted, in large part due to the internets inherent reliance on gaining users first for services (like FaceBook, which at one point was being hailed as the 'the gaming future' https://www.forbes.com/2010/02/27/videogames-farmville-zynga..., see these other anecdotes as well: http://www.adweek.com/digital/future-social-gaming-facebook/, https://arstechnica.com/gaming/2010/02/big-names-tiny-games-... notice that FaceBook rarely charged a dime for any of its endeavors. The same happened in email, and other services)
What become clear as these platforms began to take assertive positions in the market place is that it no longer became about just quality. The quality, or I should say the minimum viable quality, became easy to achieve. Xcode, through quite a few iterations, made it easy to go with default values that make most apps look and feel relatively native. You didn't have to be the best coder to have a slick working app and publish to the app store. The 'quality' of the product increased its minimum bar substantially. iOS 7, for all it garnered, enforced a design paradigm that adapted easily to most apps by default. Google with Android is achieving this, albeit more slowly, with Material as well.
Not mention toolkits published by Unity, FaceBook has their own frameworks as well for publishing things to their platform (not so much games anymore, as m...
So called 'donation' or 'tip jar' type is pretty old too.
Shareware was the original free trial. Then we just started calling it a free trial!
Advertising is old as hat, been funding not just software, but many things, for a long time.
I'm having a hard time thinking of the different ways you can actually sell your software to someone, and in an app store dominated economy, where its idea of how software is paid for really has a cascading (and I would argue detrimental) affect on how all software is sold/distributed/licensed/modeled.
Am I missing something? I'm all for high ideas. I just don't see anything short of revolting against platforms that even come close to difference.
I'm all about options. In fact, i'd love to hear some.
Well, we've been told that software is eating the world. We forgot that Silicon Valley and all it represents still draw their breath from the world that's getting eaten up. :)
Here's the thing: most consumers don't know enough about what "great software" means to care much about it. They just want software that works to solve a problem they have. They don't care if it never crashes or is written in language X or written by a process with rigorous QA and design, etc.
I think that for app publishers being featured on the TinyAds network will increase your exposure to advertisers and help you find new monetisation opportunities.
Also - the advertisers can get access to a loyal and passionate audience that this high-quality apps have. I think it's easier to target this type of audience since you know exactly on what app your ads are running.
Running an ad on Facebook or Google is too opaque to know exactly where your ad was displayed and if it's of any relevance for your product.
I don't think that a big number of users is the only answer for advertisers.
What we've found is that we can price that product relatively high ($5) because the kind of person who's willing to put $1 in your tip jar to turn off ads is also willing to put $2.
But this strategy works for us because our games are "consumable" products. Our customers will play one of our games for a while, have a good time, and then they'll be "done" with that game; hopefully, they'll then go on to buy one of our other games.
If I were to launch a non-consumable long-term app today and wanted to monetize it, I'd do it as a subscription with a generous free trial. Once I had at least 100 paying subscribers, I'd start raising the price until the churn rate tells me it's too high.
That said, I need to do some machine learning to figure out the optimal free trial length.
After one year a competitor showed up at less than half the price and the party was over.
My strategy: find a niche app so you can charge a lot more
I'd love to be wrong but I tend to think any semblance of an app store gold rush passed by 5+ years ago.
http://developer.amazon.com
If they don't, I can't see them sustaining this business model forever.
Our free apps make money by promoting paid 'pro' versions of themselves, by offering an IAP to remove ads, and by promoting other Windows apps, either through the Microsoft affiliate network or private arrangements.
We manage these ads with in-house tech to get around the "little control over what ads are displayed, their format, etc." you mention - we had the exact same problem. (Lots of really scummy ads on the bigger networks.)
Enabling direct deals between app developers would be super cool, it's basically what we find ourselves having to do anyway. Curious what you'll do with your unsold inventory, especially when you're starting off? (Maybe fall back to the platform's affiliate program, like the iTunes affiliate program on iOS?)
Edit: not promoting, but I like it when people show links to what they monetize in these discussions so I am going to follow my own advice: https://family-fortune.ridgebit.com
For business-focused products I usually do a free time-limited full-access trial + paid subscription. For consumer-focused products I usually do freemium (limited version for indefinite use + paid subscription to remove limits).
I'm working on my next, which provides business analytics for Google merchants: https://www.simonmweber.com/2017/03/18/google-payments-cente....
My SaaS adds autoreplies to Google Chat and Hangouts: https://gchat.simon.codes.
You can find the business details in https://www.simonmweber.com/2017/01/09/side-project-income-2....
Also, can you change the paid subscription cost yet? It seems once you set it there isn't a good way to experiment with different subscription fees except creating multiple subscription types with different costs.
You're able to change the subscription cost on the fly (I think; I haven't actually done it). The bigger problem is there's no easy way to do price segmentation. This is fine for my consumer product, but I may end up rolling my own payments setup for an upcoming business product.
- free download with unlock IAP: just a hack to provide a "try it" demo. really a derivative of up-front payment
- subscription based: most sustainable model, but difficult to push depending on the niche. it is, however, the most sustainable model. an app requires ongoing work, so at some point up-front single payment model caps your revenue unless you manage to grow your customer base forever
these are the only strategies I consider seriously. I regularly think about IAP (consumables for games, sounds for music apps, etc…) but it's not clear yet how/if I can do that effectively and without compromising my integrity.
The subscription based model is definitely the Holy Grail of app monetisation but it's also the hardest to achieve especially for mobile apps.
From the comment you're responding to.
It worked well until Google removed our main app from search results and it all went downhill from there.
It was some kind of penalization for some general terms like "video chat app". Before the app was in the first 10 or so and after it disappeared completely from results. But searching for the app by full name works. Also it disappeared completely from the "social" category listing.
They tols us that "search algorithm is secret and complex" but we had a previous experience like this one with an app that had unallowed content in Google Play (unreviewed images from users showing erotic content) This one was penalized with some months of disappearing from general terms search results and listing.
But now no explanation. At least they should give you an answer if there is some kind of infraction of content policy.
Vetting the apps you want to advertise can also mean time spent - but knowing what are the apps where you are displaying your apps and even who are the type of users being the ad - I for one feel this is a more powerful approach.
But yet again - I'm not a big advertiser spending huge money on it.
And still - you could have more control and info regarding your app than just "you had x number of impressions in the last y days".
Regardless, I think you're not really solving a problem. You're giving more information that involves more labor.
It seems like you're describing more of a labor/service company rather than a tech company, which is fine. But the more information and control you're giving the customer, the more labor/time you're expecting out of them.
Trialpay https://www.trialpay.com/
Ironsource http://www.ironsrc.com/
Typically you reward in virtual currency, but you can reimburse them in cash if you want to go through all the work of a cash-out policy with real money
Peanut Labs (Surveys) http://web.peanutlabs.com/monetization/ Offer Toro https://www.offertoro.com
I have a 5 ⭐️ app, 7 Second Meditation, that has fantastic retention numbers, but I didn't design it around monetization from day 1, so the LTV is too low to do paid user acquisition.
So the app is doomed to putter along on organic installs.
An app must nail both retention and monetization to succeed.
(shameless plug: I did boost the LTV by 45% using https://improve.ai)
NPV calculations, used to determine the value of the entire pipeline, include them.
(Edit: to be clear on definitions, NPV is "Net Present Value")
What is "paid user acquisition"? How would a higher "lifetime value per user" enable you to do it? How is your app monetized to arrive at this LTV? What would it imply for you to have "designed it around monetization from day 1", what would be different? Why can't you change it now?
Paid user acquisition is spending money, usually on ads, to get people to install your app.
The app business is now a ruthless winner-takes-all market and the game is all about spending $3.00 to make $3.05.
When you see pervasive ads for Mobile Strike or Game of War it means that these games are doing a better job of monetization than anyone else so they can buy the users and dominate the top spots in the charts.
Anyway, to advertise for your app, you're competing with every other advertiser out there with products that earn at least a couple dollars per clicking user. If your app only earns $.15 over the lifetime of the person that clicked, you can't afford to take out ads.
As to "Why can't you change it now?" - I haven't figured out a design that would ever allow it to be a high LTV product. So what I do going forward is think very carefully about potential apps through the lens of whether or not they could possibly be high lifetime value. If not, I won't waste my time writing that app.
In closing it is a really really damn hard craft to master, but the multi-dimensional aspect of it keeps it fun.
Lets assume you decide that you want to either make the app profitable or kill it, and the assumption world is simple so there are no other concerns (like eg. you are having fun running a 5 star app): its profit or die.
Given that assumption what would prevent you from changing the app into a subscription based app ("service")? You could notify all your users that from date x/y there will be a monthly fee to use the app. You put it into effect and 99% of your users leave the app. The interesting question left is if remaining useres*monthly fee > monthly cost of app.
Why would that not be an option for you?
Instead I've been experimenting a lot with one off & subscription approaches, here are two things I noticed:
1. When I had a subscription model, most users would sign up & almost instantly cancel their subscription (though very few ever requested a refund).
2. Adjusting the one off price didn't change the monthly revenue. For example when I changed the price from $7.99 to $10, the sales decreased a little but at the end of the month I ended up earning about the same.
(Shameless plug: https://chrome.google.com/webstore/detail/livepage/pilnojpmd... )
The best trick I can give you is start with a really low price then slowly raise it until downloads slow down but your revenue is intact from your start price.
I don't believe you need to ever introduce ads unless your product provides no real value.
Then you want to do the split. Admob has high fill rates and good numbers for most countries. The top competitors usually only have high fill rates for countries like the USA. Usually their numbers (click through rate, payment per click etc.) is less for those countries as well. I usually send most traffic to Admob and let a little dribble over to an Inmobi or AOL One (Millennial Media) or whatnot.
Aside from spending $150 on a few things initially (A few months of a VPS, $25 for a Google Play developer account etc.), all the money I have spent on my apps - advertising, translating, icon art, VPS charges etc. - have come out of revenue. That was easier up until 2014, when people were getting their first Android phones, and their weren't a lot of apps and Android programmers out there. Now there are a lot of good apps, Android programmers etc., so getting traction on an app costs more and/or takes longer.
I get e-mails all the time for some new ad network and ignore almost all of them. Admob towers over most of the other ad networks for people building standard Android apps with Android Studio. I use the major second tier ad networks just for redundancy purposes.
Some people here are recommending you charge for your app right off the bat. Here is some advice which I think might save you a lot of time and headaches. Think of an app which you can write in a few days/weeks, but which has some roulette wheel chance of reaching your monetization goal. An example for me would be this Stopwatch app ( https://play.google.com/store/apps/details?id=com.unwrappeda... ), which I worked on for two weeks, after which I released version 1 of it. Then - promote it however you would have promoted your paid app. Then sit back and see. What's the response to it? Not that much in the way of free downloads? You're giving it away for free. Think how much higher the bar will be if people have to ante up to use the app, even if it's 99 cents. People will also have higher expectations - it's not some free thing they tried - they're customers who paid for it.