The word ‘monetization’ is used a lot in the software world, but what exactly does it mean? Aside from making money with software, it’s now an umbrella term for a whole new language of how to talk about the software business. Well, to help out, the folks at CodeFuel have delved deep into the labyrinth of tech terms to create the ‘ABC of Monetization’. So the next time someone talks to you about ‘increasing their eCPMs by optimizing their download funnel’, you’ll know just what they are talking about. Enjoy…
A is for apps.
Well, not just apps, but app stores, in-app advertising, app lifecycles and app upgrades. With the major app stores (Apple’s App Store and Google’s Play) now offering over a million apps each, the marketplace is crowded, making it harder for developers to make money from their creations.
B is for bundles.
A well-trodden path for many companies looking to monetize was to distribute their software with a range of other products, creating a software bundle. But the times they-are-a-changin’ and bundles are becoming less common as users shift to downloading via app stores.
C is for cross-platform.
The ability to customize software for different devices including PCs, smartphones and tablets is a major plus for any software developer. Today, to truly monetize, developers also need to create software that is compatible with all the major web browsers, as well as mobile operating systems.
D is for data.
Are you data-driven? Without analytics or metrics, even the best software cannot improve performance. To optimize campaigns and increase conversions, developers need to constantly monitor traffic, revenue and installs. But with all the big data available today, developers need an expert analyst who can see which apps, solutions and geos are working for their business and which are not.
E is for eCPMs.
Developers and advertisers often talk about eCPMS, which stands for Effective Cost per Mille. Still unclear? ‘Mille’ in Latin means 1,000, so in mobile advertising, eCPM translates to the advertising revenue generated per 1,000 impressions. It’s become the universal way of measuring how well your app is monetizing from ads.
F is for freemium.
As the vast majority of us don’t pay to download apps, many developers have turned to the freemium business model. It’s a way of offering a basic version of your app for free but withholding certain enticing features only for paid subscribers, encouraging users to upgrade.
G is for geo.
Or geeks, of course. Geo is of vital importance to software developers, publishers and advertisers. To distribute your software in a specific country, developers often need to tailor their products to that market in terms of language, design and the types of features. Geeks? Well, they’re considered cool today.
H is for hosting.
Hosting is an important, but often overlooked, aspect of monetization. Today, users can download software that is installed, hosted and accessed entirely from a remote server or location. Sometimes the hosting is managed by the software manufacturer or a third-party vendor such as a software as a service (SaaS), a cloud computing service, allowing the user to receive updates instantly when connected online.
I is for installers.
Sometimes called smart installers, download managers or download wizards, installers are a powerful monetization tool. By using a smart installer, developers can make money by displaying secondary offers to users during the installation process and even after download. This innovative form of advertising works best when it utilizes recommendation engines. Good installers can also accelerate download times, thus increasing conversion and completion rates.
K is for kit.
Developers can now choose from a range of SDKs (Software Development Kits) available on the market. An SDK is simply a set of software development tools that allows the developer to create applications for a certain software package, framework, platform, operating system or similar development platform. Well-known kits include the Android SDK, iOS SDK and Windows SDK. But there are also special SDKs for monetization, where developers can pick and choose the solutions they want. Quite simply, the SDK gives the clay back to the developer.
L is for LTV.
Often misquoted as Long-Term Value, increasing the LTV (Lifetime Value) of customers is the goal of all monetization platforms. By keeping customers engaged with your software, you’ll likely increase your LTV, that is, the net profit attributed to the entire relationship with a user.
M is for mobile.
We all know that the world went mobile a long time ago but the trend has been slow in the world of advertising. Some marketers still prefer to spend the majority of their budgets on traditional channels but all that is set to change and in-app advertising overtakes other forms of advertising. Other mobile monetization solutions include in-app search feeds, freemium offers and sponsored ads on lock screens.
To be continued…