Allen Lau is the CEO and co-founder of Wattpad, a social platform for readers and writers. He discusses challenges with monetization on the Android platform, including its open nature encouraging free apps, billing issues, and Google's unhappiness with paid apps. However, mobile advertising and in-app purchases are becoming more viable options. To succeed, developers need great products, large user bases, and to treat Android as a business rather than just an app. While monetization is difficult, traction and engagement are most important, and large audiences open many monetization avenues.

1. Android and Monetization
Allen Lau
wattpad.com/allenlau
@allenlau
Unlimited Stories

2. WHO IS THIS GUY?

3. WHO IS THIS GUY?
• CEO and Co-founder, Wattpad
– Community of readers and writers to discover and share stories
– Wattpadders were spending 2 billion minutes on Wattpad in Q3
2011, most of them coming from mobile
– Investors include Union Square Ventures, Golden Venture
Partners, W Media Ventures
• CEO and Co-founder, FeedM8
– Mobile advertising company, sold to Upstream Systems
• CTO and Co-founder, Tira Wireless
– VC backed mobile content publishing and deployment company

4. CURRENT MARKET

5. CURRENT MARKET
• Number of apps = 500,000+
• Number of downloads per month = 1 billion+
• % of paid apps = 66%
• Payout to developers = $3 billion
• Number of apps = 500,000+
• Number of downloads per month = 1 billion+
• % of FREE apps = 66%
• Payout to developers = 2% of iOS (2010)
Google is downright “not happy” about the purchases of paid apps
– Eric Chu, Group Manager Android Platform Manager, Jan 2011

6. WHY?

7. WHY?
• Openness encourages
– Free apps
– Copyright infringing content
– Spam
• Billing methods
– Google Checkout vs iTunes
– Billing reliability

8. IT’S GETTING BETTER!

9. IT’S GETTING BETTER!
• Mobile advertising is becoming a viable option
• In-app purchase
– Very important when competing with LOTS of free apps
• Operators Billing
– AT&T, T-Mobile, Sprint
– Vodafone UK, Vodafone Germany
– NTT DoCoMo, KDDI, SoftBank, SKT
• 3rd Party payment provider
– Urban Airship, Zong, Boku, Payfone

10. PREREQUISITE

11. PREREQUISITE
• Great product
• Lots of users
– It is a volume game
– Don’t build apps for small niches (app for Mongolian food lover living in PEI
won’t work)
– Some exceptions (more on this later)
• Build a business, not an app
– Apps can be commoditized really quickly

12. ADVERTSING

13. ADVERTISING
• eCPMs can be a few times HIGHER than iOS
– Mostly CPC ads
– CPM ads are few and far between
• Advertising is a (high) volume game
– eCPM is a step function of traffic
• Using multiple ad networks and mediation are VERY important
• Geography matters
– Ad network is a local business
• Other ad formats
– Video and other intrusive ads generate higher CPMs
– Don’t sacrifice your UX

14. PAID APP/IN-APP PURCHASE

15. PAID APP/IN-APP PURCHASE
• Paid app
– Hard to make it work when there are so many free apps and a suboptimal
payment system
• In-app (freemium) is the preferable model
– At least you are on equal ground with all the free apps!
– Treat “free” as your marketing expenses
– As long as you have enough “mium” to convince users to pay up
• Small niches, business apps, where price sensitivity is not an issue,
is also a possibility

16. DO I NEED TO MAKE MONEY?

17. DO I NEED TO MAKE MONEY?
• Remember - build a business, not an app
• Can Android be your loss leader and make money elsewhere?
– Especially true for network effect based business

18. ONE THING TO REMEMBER

19. ONE THING TO REMEMBER
• Traction is king
• Engagement matters
• When you have a billion users, you have a million ways
to make money
• When you have no user, you have no way to make
money

20. Thank You
p.s. we are hiring ;-)
Allen Lau, CEO and co-founder
Suite 801-B
4950 Yonge Street
Toronto ON M2N 6K1
wattpad.com/allenlau
@allenlau
allen@wattpad.com