This presentation provides a quick overview of the main mobile monetization techniques with examples of: - Freemium apps with in-app purchases - Subscription based apps - User data selling - In-app advertising: -- Display ads -- Native ads -- Video ads -- Interstitials -- Incentivized installs -- Playable ads - Mobile Surveys By Pablo García Montes (@pabgarm)

1. Quick Overview of the
Main Mobile Monetization
Techniques
Pablo García Montes- @pabgarm
Barcelona – 07/2014

2. “
”
The majority of app businesses are not sustainable at current revenue
levels.
50% of iOS developers and 64% of Android developers are below the
‘app poverty line” of $500 per app per month.
At the top end of the revenue scale there are just 1.6% of developers
with apps earning more than $500k per month.
Developer Economics Q3 2014: State of the Developer Nation
http://www.developereconomics.com/reports/developer-economics-q3-2014/

3. Mobile Monetization Techniques
 Paid apps
 Freemium apps / In-app purchases
 Subscription
 Anonymous statistics
 Advertising
 Display Ads
 Interstitials
 Video Ads
 Native Ads
 Incentivized installs
 Playable Ads
 Surveys

4. Free
84%
Paid
16%
Android Free
90%
Paid
10%
iOS
Paid Apps
Users pay to install an ads-free app.
Pros
 App monetization from the beginning
 Guaranteed revenue with every user
 Less distracted users (no ads)
Cons
 Lower volume of downloads
 Limited revenue/user (Price of the app)

5. Users download a free basic version of the app, which is
monetized with extra paid functionality, in-app purchases
and/or virtual currencies.
Pros
 Removes entry barriers
 Higher volume of downloads
 Allows upselling
Cons
 Value perception of the product may be lower
 May not generate revenue from every user
 Difficult to set up (can give away too much or too
little)
Freemium/In-app purchases

6. Users download a free app which requires a subscription to access the
content. It is usually combined with a trial period.
Pros
 Removes entry barriers if the user gets a trial version at the
beginning
 Allows upselling
Cons
 May not generate revenue from every user
 Apple gets 30% of all subscription transactions via the app
Subscription

7. The mobile application is distributed for free, trying to reach and engage
as many users as possible, so all the usage/location data is sold to 3rd
party companies interested market data.
Pros
 Market data can be very valuable if it is properly segmented
 Monetization via in-app advertising may not be needed if the
volume of data gathered is enough, providing a better user
experience
Cons
 This approach requires a high volume of data to be worthy
 It may create discomfort and mistrust amongst the users
Anonymous Statistics

8. Users download a –usually- free app, which is monetized with advertising.
There are different approaches to show in-app ads:
 Display Ads
 Interstitials
 Video ads
 Native Ads
 Incentivized installs
 Playable Ads
Advertising

9. Pros
 Easy integration of ad networks
 Predictable income generation
Cons
 Reduces available space on the screen
 Reduces user engagement, as the ads are
usually interruptive or block the user’s
interaction with the content
Display Ads

10. Ads that are displayed full screen taking over the mobile
screen after the user either lands on the site or makes
any action.
Pros
 More visible ads, since they take over the whole
screen
 Users are forced to interact with the ad, either
to close or click on it, so better CTRs
 Tend to be better appreciated than banners
Cons
 They are very intrusive, so they have to be
implemented carefully and shown in strategic
points
Interstitials

11. Similar to interstitial ads, a full-screen video pops up and is
automatically played. For 15-30 seconds. Some allow the
users to skip them after 5 mandatory seconds.
Pros:
 More engaging than regular banners
 Can be entertaining if placed during pauses or long
waiting times required by the app
Cons:
 Can make the user to leave if the timer is too long
and blocks the regular user-app interaction
Video Ads

12. Ad units aligned with the design of the
organic content.
Pros
 Better user experience, as these ads
are less intrusive
 Better ad performance, since users
are becoming more aware of
traditional formats
Cons
 Users can be confused or deceived.
They may think they’re being tricked
 Requires more effort to integrate
with ad networks, as the formats
aren’t standard
Native Ads

13. Users of a free app download another mobile
application in exchange for something else, usually
in-game virtual currency or goods.
This approach is not allowed by Apple.
Pros
 Better perception from users compared to regular
banners
 Users can get something out of interacting with
the ads
Cons
 Interrupts the user’s activity as they are redirected
outside the main app
Incentivized Install Ads

14. Similar to video ads, a full-screen video pops up with a trial version
of a game for users to test it before downloading it. These interactive
ads usually run for 15-40 seconds.
Pros
 More engaging than regular banners or videos
 Can be entertaining if placed during pauses or long waiting
times required by the app
 These ads deliver a better performance than regular ads
Cons
 They may not work in all kind of apps, as they interrupt the
regular usage of the main application.
Can work with apps that require a long pause by design.
Playable Ads
Image Source: Inmobi Playable Ads

15. While running the main application, users get the option to fill
in a survey in exchange for a reward. For each completed
survey, the developer gets paid.
Pros
 The user gets something for participating, which can
increase the conversion
 Depending on the implementation, it can be not very
intrusive, as the user decides whether to fill it or not.
 These ads deliver a better performance than regular
ads
Cons
 Users can lose focus on the main application by
interacting with the survey
 It is a technology at a very early stage, which means
there may be a low volume of demand, being too
repetitive for the users
Surveys

16.  There’s a growing trend of share of freemium business compared to paid apps.
 Free apps with in-app purchases generate the majority of the revenue in app stores.
http://www.distimo.com/download/publication/Distimo_Publication_-_January_2014/EN/archive/
Summary

17. Summary
 In terms of popularity of advertising formats:
1. Display ads are the preferred format in most of the apps/mobile sites
2. Interstitials and video ads are becoming more common
3. Native is the big bet, but it is still in a very early stage
4. Incentivized installs aren’t allowed in iOS and most of the advertisers on Android platforms aren’t
allowing publishers to use it. This approach is loosing traction.
5. Playable ads could be the next big thing for mobile game advertising, but it is still at a very early stage
6. Monetization via surveys is starting and is not offered by too many companies yet.

18.  Developer Economics Q3 2014: State of the Developer Nation
 http://www.developereconomics.com/reports/developer-economics-q3-2014/
 The History of App Pricing, And Why Most Apps Are Free (Flurry)
 http://www.flurry.com/bid/99013/The-History-of-App-Pricing-And-Why-Most-Apps-Are-Free
 Distribution of free vs. paid Android apps (AppBrain)
 http://www.appbrain.com/stats/free-and-paid-android-applications
 How the most successful apps monetize globally (Distimo)
 http://www.distimo.com/download/publication/Distimo_Publication_-_February_2014/EN/archive/
References

19. Who am I?
I graduated from Universitat Politècnica de València in September 2008, where I completed a
bachelor in Computer Engineering.
After that, I started working as a Program Manager at Microsoft Ireland for the Mobile
Advertising Platform in September 2008.
After almost 2 rainy years, I moved to Seattle in April 2010 to join the Microsoft AdCenter
Mobile Business Intelligence Team as a Program Manager too.
Missing the Spanish sunshine, I joined Softonic, in Barcelona, as a Product Manager in May
2011 leading the native advertising platform.
I’ve recently completed a Master in Direct and Digital Marketing at the Barcelona School of
Management.

20. Contact me if you have any comments, feedback, or if you’re in Barcelona and want to
grab a coffee.
 Twitter: @pabgarm
 Linkedin: http://es.linkedin.com/in/pabgarm
Let’s talk!