What Are Software Monetization Models and How to Implement Them

by | Nov 20, 2014 | Monetization

Software <a ” target=”_blank” rel=”noopener noreferrer”>monetization has become a stumbling block to many software developers: the market is saturated with competition, there are many high quality programs available for free, and consumers are less and less inclined to pay for products they have never tried.

To keep up with the ever-changing landscape of online marketing, app developers and software publishers are turning to other monetization models that enable them to both compete and generate revenue. While most of these models operate using advertising or affiliate sales as their essential form of income generation, software monetization models take several forms.

Charging for the End Product

Charging end users for the final piece of software is one of the oldest software monetization models. It has worked since computers became mainstream, and it still works today. In this model, app developers and software publishers simply set a price for their product, and require users to pay for the product before using it.

This approach works well with developers and publishers who have a successful line of products or a recognizable brand. Charging for products can generate a great deal of income for the right product or publisher, but this method also has some drawbacks.

For unknown publishers, or publishers without a great deal of marketing resources, this approach can be quite difficult. As mentioned above, the software market is saturated with software that is free and cheap. Why pay for an app when you can find a similar one for free?

To succeed with this software monetization model, app developers often must have marketing resources, brand recognition, and/or unique product features that set them apart from the competition.

Free Trial with Advertisements

This model can work in conjunction with priced products. By offering users a free trial, publishers can give users either a partial or complete product that can still generate revenue through advertising. One common approach involves reserving certain features for the paid version of the product; another approach involves offering paid versions that come without advertisements.

In either case, this model offers both marketing and monetization benefits. By offering a product for free, users don’t experience the same hesitation over whether or not they should purchase a product. This can increase downloads and market share, while simultaneously putting a revenue-generating piece of software directly in the hands of the target audience.

On the downside, however, a free trial or ad-supported version may not end up generating as much income as a paid app or program. Users have become so desensitized to advertisements that, when done incorrectly, ads can go unnoticed. And users who are satisfied with the features offered by a trial version may never end up paying for the final version.

This model works better with certain types of applications. Games, for example, often work well by hooking the player for free and then requiring payment if people wish to continue playing.

Pay-Per-Install

Pay-per-install (PPI) software monetization models are an excellent way for developers or publishers to generate revenue, reach larger audiences, and partner with other industry leaders. It works by promoting advertisers’ products during the installation process.

Instead of advertising inside an application or offering a partial product such as a free trial, app developers can use this model if they wish to distribute complete products. This can improve the user experience while still generating revenue for the developer. Free software programs can also increase the total number of downloads, which can increase the market share.

Bundling

Bundling refers to packaging multiple programs, tools, or applications together into one suite. Add-ons, application extensions, and plugins are good examples of products that may benefit from bundling. Developers who have developed complete programs or products can also enhance their offer by bundling their products together with those belonging to a third party.

This software monetization model helps increase market exposure by pooling multiple audiences. And if the publishers charge for the final product, the developers and publishers can share the revenue.

Software bundling is an excellent method for developers who have designed tools that work well with other applications. Bundles often offer a higher value to the end user, so end users may be more likely to pay for the final product.

Advertising In Apps

In-app advertising has become one of the most common software monetization models. Developers competing in an oversaturated app space will often choose to offer products for free, but include advertising inside the app to generate revenue.

This can be beneficial from a marketing perspective, since users are more likely to download free apps than paid apps. And in-app advertising does offer a sustainable method of monetizing programs.

Some advertisements, such as tacky display ads, often go ignored, due to “banner blindness.” Done correctly, though, in-app ads can be contextualized and integrated as a seamless part of the app experience.

There are quite a few software monetization models, ranging from a priced end product to advertising-powered approaches. Regardless of which method developers and publishers choose, offering value to the end user will always be the most sustainable long-term monetization model. A successful software monetization strategy is one that offers value and integrates well with the user experience. 

5 Ways to Monetize Your Software

by | Jun 16, 2014 | Installs, Monetization, Pay Per Install, Software

Creating your own software isn’t just a great challenge. It can also be a super way to grow your revenue stream. This is true whether your business is to create software for other businesses, or if you’ve just created a single software package to complement other services. While much of your revenue may come from sales of that software, why not increase your profits by monetizing your software.

Think of it as the cherry on the cake, the whipped cream on your hot chocolate, or the
Much like monetizing your website or app, there are many ways to make money from software. Here are just a few ideas on how you can monetize your software:

Customizable Installer

You’d be surprised. The software installation process presents several opportunities for monetization. For example, you can create or purchase a custom installer that will show your customers different offers during the installation process. These offers could include other software products or special discounts on related products or services.

The installer you create or customize could promote your own products or services, helping you to boost your overall revenue. The installer could also promote other products and services for which you earn a flat fee or commission when customers click on the links or purchase items through the links.

Your customers are just staring at their screens while they’re waiting for the software to download.

Why not take advantage of this opportunity to show them products that might benefit them and earn profit for you? Think of it as a win-win situation, one in which you earn money while your users stave off boredom.

Browser Extensions

One of the things that people can include when they download your software is a browser extension. You have likely such offers yourself many times when downloading new software. In many cases, you have to uncheck a box in order to prevent the download of the browser extension with the software.

You can actually make money with these types of browser extensions, and there are a couple of ways of doing so. Some people will pay you to include their browser extension because it allows them to gain tracking data that they can use for advertising.

Others will simply pay you for the number of clicks the extension generates. Explore your options to find out which makes the most sense for you.

Search Boxes

You can include search boxes right in your software, or you can make them part of a browser extension. Like browser extensions, search boxes can be used to track data for advertising insights, or they can pay you out based on the number of clicks or purchases that they generate.

You can create your own search boxes then install the advertiser’s tracking code, or you can use a box provided by a company that puts you in touch with advertisers. The latter option takes care of all the heavy lifting for you.

Bundle Deals

Including your software in a bundle package creates a better deal for your customers and makes more money for you. Partner with other businesses who offer complementary products, and include your software and theirs in a package deal. Customers will likely save money by downloading both at once. This will encourage more people to buy the bundle, increasing your revenues. Just think of it as a 2-for-1 stall on your installs.

Earn two bundle incomes with one install.

You may also be able to make money from the other business using this strategy. If your site or your business is popular enough, other businesses may pay you for the opportunity to partner with them. They will get more exposure for their product, and you will make money on the bundle deal.

In-Software Advertising

There are plenty of places you can include advertising in your software. And though these ads may not generate as much interest as the annual Super Bowl commercials, they can still boost your bottom line. And really, that’s what we’re looking for here.

Ads can appear during transitions. They can show up when the software is started. They can be placed on a sidebar, a header or a footer. They can even appear in text in the software. Where you place the advertising just depends on the functionality of your software. The ads should be unobtrusive, and they should be relevant to the user.

You can sell ads during the development phase of your software, or you can include code that allows you to update the ads continually. When you update the software, you can update the ads being displayed. This gives you opportunities to continue to present users with relevant ads, no matter how long they have had your software.

Most people focus on sales of their software when they are thinking about the revenue they can make from it. However, this is short-sighted. While software sales can surely bring in a lot of money, there are many other ways to make money from software. You can include browser extensions, search boxes or in-software advertising.

You can create bundles or custom installers. You could even take advantage of all of these opportunities. The only limit, really, is your own creativity. Think about the types of partnerships you can develop and what kind of audience you are targeting. Explore the full range of options to discover which strategies work best for your business and your software.