Presented at CASE25 developer conference. Abstract: Although the mobile applications are everywhere and even if you have a brilliant idea, the monetization of a mobile application is not an easy task. On the other side, there are examples of companies and individuals which make an enormous amount of money on their free apps. How is that possible? Well, obviously, they have chosen the successful business model/s. Thus, this paper will present trends and possible models in monetization along with the practical insights in implementation in Android and Windows Phone mobile applications. Having the broad and complete picture of different possibilities, it should be easier to define and choose an appropriate business model for any specific mobile application.

1. Monetizing mobile applications
Zlatko Stapić, Marko Mijač, Boris Tomaš
University of Zagreb
Faculty of Organization and Informatics
Pavlinska 2, 42000 Varaždin, Croatia
http://www.foi.unizg.hr/
CASE25 – Developers conference - 11.06.2013. – Zagreb, Croatia

2. Agenda
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20132
Introduction
Major objectives
Distribution channels
Business models
Implementation example
Discussion

3. Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 2013
Introduction
• Monetizing mobile apps is not an easy
task
• Ability to create good app ≠ ability to
sell app
• Success stories (Rovio Mobile)
• Two main approaches:
 Make money by selling the app
 Make money after the user has
installed the app
• Payment methods should not be
neglected
3

4. Major objectives
• Regarding their mobile applications, developers and businesses
have four major objectives:
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20134

5. Distribution channels
• Currently, app stores are the most common way of app distribution:
 Platform specific (iPhone App Store, Google Play, Market Place…)
 Operator owned (Sprint App Store, VZAppZone…)
 Independent (GetJar, Opera Mobile Store, Handango…)
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20135

6. Business models: pay per download, B2B
• Pay per download model
 Simple, frequently used model
 The user is charged before the app is installed
 App store takes it’s share
• B2B Sales Model
 Traditional software sales model
 Selling mobile apps directly to the customers
 Suitable when making mobile apps for a specific customer
 Open vs closed platforms
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20136

7. Business models: freemium
• Freemium model
 Distribute basic functionalities
for free
 Charge the users for the
additional functionalities
 Example 1: Games (additional
levels, maps, weapons…)
 Example 2: Dictionaries
(additional words, languages…)
 Predecessor of in-app billing
model
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20137

8. Business models: Advertising based revenue model
• Advertising based revenue model
 Creating revenue from ads within applications
 Enabling in-app advertising using 3rd party SDK’s (share revenue)
 When placing ads keep in mind user experience
 Mobile advertising should reach 3.1 billion $ in 2013.
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20138

9. Business models: Advertising based revenue model
• Displaying 3rd party apps
 Visual ads (impressions)
 Click ads (clicks)
 Install ads (installs)
• Client campaigns
• House ads
• Advertising mechanisms
 Implementation approaches: notification, roll, display
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 20139

10. Business models: In-app purchasing
• In-app purchasing
 Potentially the best way to
earn money through app
stores
 Offer free application, earn
from in-app purchases of
upgrades, additional services
and functionalities
 Platform APIs usually have
built-in functionalities for fast
and secure in-app purchase
 Android example
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201310

11. Business models: In-app purchasing
• Various in-app models:
 One time purchasing
 Micro transactions (example: buying poker chips)
 Subscriptions (example: Skype, news apps, science journal apps)
 Applications for shopping (users use application to buy other
products)
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201311

12. Implementation example
• Existing advertising
platforms and SDK’s simplify
advertising process
• Example: AdMob (Google) –
monetizing
Android, iOS, Windows
Phone applications by adding
ads (banners)
• XML – prevailing approach
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201312

13. Summary of monetization models
Model Downloads Income rate
Income
volume
Revenue
User
experience
Free Large None None Shared Positive
Ads Large Continous Small Shared Negative
Paid Small One time Large Shared Positive
In - app Large Multiple Large Shared Positive
Subscription Large Continous Medium Not shared Indifferent
Proprietary
in - app
Medium Multiple Medium Not shared Negative
Proprietary
ads
Large Continous Medium Not shared Negative
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201313

14. Model combination matrix
Free Ads Paid In - app Subscription
Free x x x x
Ads x x x
Paid x
In -app x x x
Subscription x x x
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201314

15. [1] M. Newlands, “Mobile App Monetization: 4 Hottest Ways To Make Money With Free
Apps Today,” Murray Newlands - Marketing Blog, 2011. [Online]. Available:
http://www.murraynewlands.com/2011/10/how-to-monetize-mobile-apps/.
[Accessed: 03-May-2012].
[2] V. Hirsch, “The joy (and cost) of Freemium,” Volker on Mobile, 2010. .
[3] C. Foresman, “Developers still divided on mobile app monetization, but love the
cloud,” Ars Technica, 2011. [Online]. Available:
http://arstechnica.com/apple/news/2011/08/survey-developers-still-divided-on-
mobile-monetization-love-the-cloud.ars. [Accessed: 03-May-2012].
[4] Mobinex, “Monetizing Mobile Applications,” Smartface Developer zone, 2010.
[Online]. Available: http://developer.smartface.biz/monetizing-mobile-applications-
n86.html. [Accessed: 02-May-2012].
[5] Appcelerator Inc. / IDC, “Q3 2011 Mobile Developer Report: A platform interest
survey of 2,012 Appcelerator application developers from July 20-22, 2011.,” 2011.
[6] T. Miller, “App Store Tops 40 Billion Downloads with Almost Half in 2012,” Apple
Press Info, 07-Jan-2013. [Online]. Available:
http://www.apple.com/pr/library/2013/01/07App-Store-Tops-40-Billion-Downloads-
with-Almost-Half-in-2012.html. [Accessed: 01-May-2013].
References
15 Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 2013

16. [7] ABI Research, “45 Million Windows Phone and 20 Million BlackBerry 10
Smartphones in Active Use at Year-end; Enough to Keep Developers Interested,”
ABI Research technology market intelligence, 31-Jan-2013. [Online]. Available:
http://www.abiresearch.com/press/45-million-windows-phone-and-20-million-
blackberry. [Accessed: 01-May-2013].
[8] BlackBerry, “Frequently Asked Questions,” BlackBerry Developer. [Online].
Available: http://developer.blackberry.com/devzone/blackberryworld/faq.html.
[Accessed: 01-May-2013].
[9] “App Store Frequently Asked Questions,” Support Apple. [Online]. Available:
http://support.apple.com/kb/HT2001. [Accessed: 01-May-2013].
[10] “Windows Phone Marketplace,” Windows Phone Marketplace. [Online]. Available:
http://www.windowsphone.com/en-us/store/overview. [Accessed: 15-May-2013].
[11] S. Chettri, “Great Ways to Monetize Your Mobile Apps,” NetChunks: Webmaster
and Blogging tips, Nov-2011. [Online]. Available:
http://www.netchunks.com/great-ways-to-monetize-your-mobile-apps/.
[Accessed: 26-Apr-2012].
[12] C. Anderson, “A revizualization of the four kinds of free,” The Long Tail, 2008. .
References
16 Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 2013

17. [13] Z. Stapić and O. Ribičić, “Unutar-aplikacijska kupovina uz primjer implementacije
na Android platformi,” in Razvoj poslovnih i informacijskih sustava CASE
24, Zagreb, 2012.
[14] M. Newlands, “Mobile App Monetization: 3 Great Ways,” Small Biz Bee, 2011.
[Online]. Available: http://smallbizbee.com/index/2011/11/11/mobile-app-
monetization-3-great-ways/. [Accessed: 03-May-2012].
[15] R. Woodbridge, “9 Mobile Business Models that you can use right now to generate
revenue | UNTETHER.tv,” Untether.tv, 2010. [Online]. Available:
http://untether.tv/2010/8-mobile-business-models-that-you-can-use-right-now-to-
generate-revenue/. [Accessed: 03-May-2012].
[16] “Google Mobile Ads SDK,” Google Developers, 06-May-2013. [Online]. Available:
https://developers.google.com/mobile-ads-sdk/docs/admob/fundamentals.
[Accessed: 20-May-2013].
References
17 Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 2013

18. Looking forward to your questions 
18 Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 2013

19. Information on authors
Zlatko Stapić, M.A.
zlatko.stapic@foi.hr
Faculty of Organization and Informatics
Pavlinska 2, 42000 Varaždin
tel: +385 42 390 820, fax: +385 42 213 413
Zlatko Stapić, M.A. works from 2006 as a Teaching assistant at the Information
Systems Development Department at Faculty of Organization and Informatics in
Varaždin, and attends two doctoral programs: Information sciences at the same Faculty
and Information and Knowledge Engineering at the Computer Science Department at
the University of Alcalá in Spain.
Recently, Zlatko is intensively engaged in developing applications for mobile devices,
which is also the subject of his research in the dissertation, and it is particularly
important to notice that he is developing for multiple mobile platforms, including
Android, Symbian, Windows Phone 7, Nokia Qt etc. Zlatko's more detailed resume, a
list of all papers, projects and awards, and other important information can be found
on his personal website: http://www.foi.unizg.hr/djelatnici/zlatko.stapic.
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201319

20. Information on authors
Marko Mijač, M.A.
marko.mijac@foi.hr
Faculty of Organization and Informatics
Pavlinska 2, 42000 Varaždin
tel: +385 42 390 853, fax: +385 42 213 413
Marko Mijač, as of July 2011 works at the Faculty of Organization and Informatics in
Varaždin as a project KI Expert 2012 associate and as a teaching assistant on courses
related to software engineering and information systems. Prior to his current
employment he worked as a developer of intranet production planning system at
Boxmark Leather d.o.o. He is interested in web, desktop and mobile applications
development in various platforms and technologies.
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201320

21. Information on authors
Boris Tomaš, M.A.
boris.tomas@foi.hr
Faculty of Organization and Informatics
Pavlinska 2, 42000 Varaždin
tel: +385 42 390 853, fax: +385 42 213 413
Borist Tomaš, M.A. is a Junior researcher and Teaching Assistant at the Faculty of
Organization and Informatics, University of Zagreb where he works at the Department
of Information System Development. Boris' assignments at the Faculty are laboratory
sessions delivered on the courses Geography Information Systems and Software
Engineering. Fields of interest are: software development, mobile technologies,
geoinformatics, bioinformatics, artificial intelligence, application marketing, Internet
marketing. During his work career he worked on several projects in various positions.
Boris is currently a doctoral student at the Faculty of Organization and Informatics,
University of Zagreb. For his academic achievements he received Faculty Dean's award
and University Rector's award.
Stapić, Mijač, Tomaš: Monetizing mobile applications - CASE25, 11th June 201321