Hi there.
My name is Tamzin Taylor.
I work in the Google Play Apps and Games Partnerships team.
I've been working to monetize mobile content with partners
since 2001.
And I can tell you that Play is a global marketplace platform
for distributing software.
Transactions are vital to any marketplace,
so we take our platforms incredibly seriously.
Our whole job is to enable developers
like you to build and run global businesses.
And we're extremely proud of what we've achieved.
But we're still working incredibly hard
to continue delivering business and spend to you.
Now, monetization is driven by a number of best practices,
including quality, design, and investment
in using the great features that the Android platform offers,
such as alpha beta testing, staged rollouts, and Cloud Test
Lab.
You should also consider strategies
to drive engagement, increase retention, and grow
user lifetime value.
And of course, consider using analytics
to really know who your users are
and be able to create optimal experiences for them.
But in the next 20 minutes, I'm going
to talk to you about how you can increase monetization using
pricing best practices and some of the tools
that we have at your disposal so you can succeed.
There's big money to be made on Google Play.
In fact, we paid out $7 billion to our developers last year.
When you operate on Play, you have access
to over a billion users and hundreds of millions of buyers.
We've had huge teams spend years building gigantic reach
into our commerce platform in more countries with more
ways for users to pay.
And in fact, we see a lift in incremental sales
and new customers whenever we introduce
a new form of payment.
So the faster we unlock new forms of payment, the larger
the pool of users who can purchase your app.
We now support over 100 forms of payment across 152 countries,
and we're constantly working on new payment partnerships,
building more ways for your users to pay you,
and offering locally relevant payment methods
to convert more users.
For example, we recently unlocked direct carrier billing
in India.
We're committed to make it easier and easier
for your users to pay you.
And we're seeing it pay off.
So in Germany, for example, we saw
a 70% increase on year-on-year buy growth,
and more and more developers selling outside their home
market.
We saw a 38% annual growth in developers
with primarily international sales.
So given its increasingly global market,
how should you price your top-quality application?
There are five key points to setting and managing
your process effectively-- matching the model to market,
considering purchasing power, considering price format
preferences, taking into account audience segmentation,
and regularly checking your prices.
Top developers consider the pricing model
for key markets and cultural expectations.
For example, some prepaid markets
have low credit card penetration and are less predictable,
in which cases, models like free, premium, or in-app
purchase might be more relevant for them.
And if considering a subscription model,
your value proposition should give users
a regular, fresh, ongoing contental functionality.
Consider what people can afford.
Last year in November, we lowered the minimum price
in India from 50 to 10 rupees.
Now, consider a can of Coke cost 10 rupees in India, roughly,
whereas in the US, it's $1.
And the exchange rate today is 66 rupees to the $1.
So you can see there's a big difference in how much
people are charged and their purchasing power parity.
So it's important to give the right consumer the right price.
Now, four weeks after we launched this change
in the pricing, we saw take-up from 560 totals
across 220 developers.
After this four-week period, we saw an 800% increase
in revenue.
And interestingly 3/4 of the developers from
were from outside India.
This really highlights the growth and internationalization
of our ecosystem.
One of our partners, Nova, dropped their prices
from 325 rupees to 15 rupees, and saw a big impact.
They saw 136% increase in orders and 27% increase in revenue.
Now, the best way to find out what purchasing parity
differences there are across countries
is to look at the Big Mac index, which you can
find on the economist website.
Many top partners are testing prices in overseas markets.
Learning language app Busuu tested ABCD prices
across Russia and the US to find the optimal price
for those different consumers.
In the USA, it ended up being a 23% reduction, which
resulted in 95% increase conversion and 50% increase
in ARPU.
In Russia, it was different.
The optimal process was 12% lower,
which resulted in 15% increase in conversion and 17% increase
in ARPU.
So the caveat here is, don't take our word for it.
Test yourselves.
Test your different prices to find the optimal point
for increased conversion and incremental revenue
in your different markets.
Consider local price preferences and optimize your price format
for different markets.
For example, in Korea and Japan, they
prefer prices which ends in whole, rounded numbers,
such as 1,000 2,000, et cetera, whereas in Australia, we
prefer 199, 299.
Now, you can do this in the developer console.
In fact, you can customize a price for every single market,
and we'll take care of billing the users
in their local currency.
We think if users see an optimized price and a value
offering that works for them, they're
more likely to agree to purchase or subscribe to your offer.
Now, users are not homogeneous.
And it's best practice to know who they are, their appetite
to pay, and carve out different strategies to help them
on their purchase journey.
And we provide the tools to help you.
There's great reporting in the developer console.
And Google Analytics gives you the ability
to identify and target entirely different offers
to different segments, all to help you increase conversion
and ARPU.
You really should use analytics to better understand
your audience engagement, using KPIs like last visit, loyalty,
and average tenure.
To really help you improve purchase flows,
develop user segments based on predictive lifetime value,
and start targeting different segments with optimal offers.
WYSH did this, and saw a 10% uplift
from presenting different offers to highly-engaged
versus less-engaged user segments.
Finally, developers should regularly
review and adjust prices, primarily for two reasons.
Number one, to ensure you're still
competitive with similar apps, and secondly,
in response to changes in foreign exchange.
For example, a developer who set their price in February 2014
and didn't change it for a year would have seen in February '15
that their gross revenue from Russia had dropped nearly 50%,
severely impacting margin, just from an exchange rate movement.
So to recap the five best practices
I've mentioned so far, they were matching
the model to the market, considering purchasing power,
consider user price format preferences,
use audience segmentation, and regularly check your prices.
Now, a running theme here is that not all users
are the same.
They have different price sensitivities.
So how can you do with this and increase monetization?
I'll now touch on how you can use
AdMob to monetize across different types of users.
And then, I'll talk to the power of subscriptions
before wrapping up.
AdMob is our industry-leading ads and mediation platform
that's earned over 650,000 developers over $1 billion
in the last two years.
The growth statistics are impressive.
This tells us that not only does AdMob work well,
but it tells us something about the ecosystem.
Advertising is a significant part of app monetization,
and is growing every year.
In fact, Gartner predicts that by 2017, there'll
be nearly 270 billion apps downloaded, the majority being
free of freemium.
Now, with this growth in free and freemium apps
comes growth in mobile advertising.
Now, I mentioned earlier that consumers
differ between markets because of income
or cultural preferences.
And a monetization strategy might work in one market,
but not in another.
We believe that a developer shouldn't
be forced to choose between advertising or in-app purchase
only.
In fact, the best apps focus on users first.
And you should be able to build monetization around the user.
AdMob can help you find the right monetization opportunity
because it has a smart monetization engine.
And this is a feature called In-App Purchase Ads.
It helps promote in-app purchase items to users
so you can grow your in-app purchase
revenue by automatically knowing which users are buyers
and which are less likely to spend.
It looks at spend behavior in your app,
and only shows ads to those less likely to buy,
freeing up valuable impressions for you.
Plus, it's integrated with Google Analytics.
In-app purchase and ads are two great ways to make money.
And with AdMob, you can automate the presentation of the offers
to match the users likely spend behavior.
Another model which works well for generating recurring
revenue is subscriptions.
Users and developers love subscriptions.
They have become widely accepted and adopted
across the music, movie, and TV industries.
And this adoption is being seen in apps.
For users, subscriptions mean no unforeseen chargeable events.
They remove the fear and increase trust.
The app is always there for you when you need it.
For developers subscriptions mean recurring revenue,
which is great for cash flow.
And did you know that subscriptions
are the fastest growing business model on Play?
Last year, they showed 2 and 1/2 times growth year-on-year.
But why is this?
First of all, users are getting used
to paying for digital content.
And secondly, the overall standard
of quality in Android apps is increasingly
leaps and bounds, led by industry-leading developers
like yourselves.
And many developers are seeing success.
Busuu recently redesign their onboarding flows
and app designed to better communicate
their new subscription value propositions.
After optimizing their subscription offers,
they found their Android retention beat
all other platforms, and their subscription revenue
increased 125% and the ARPU increased 86%.
The New York Times implemented Google Play Billing,
replacing the traditional news publisher paywall.
This resulted in user' sign-up flow
shortening from two minutes to three seconds,
and a 125% increase in subscription conversion
after the first month and 254% increase year-on-year.
Pandora also saw a 397% revenue increase
through optimizing their conversions
by offering a trial period.
It's really important with subscription model
to allow users to try before they buy.
You can decide the length yourself,
but show them the value to increase
their likelihood of converting.
Google offers heaps of functionality
to build a successful subscriptions business.
There are upgrades and downgrades
to help ease the barrier for entry
by offering multiple plans to users.
There are grace periods for helping people
when their payment's declined.
And there are goodwill credits, which
can be used for promotion or complaints.
And of course, it's all supported
by deep financial metrics available in the developer
console.
And last year, we even added additional time periods,
which now allow you to really create interesting, compelling
offers based on weekly, monthly, quarterly, six-monthly,
and annual recurring billing periods.
Google Play is a huge, growing market.
And pricing is one lever for better monetization.
But it must be executed in combination
with improvements in quality and by having a deep knowledge
about your users.
You can achieve success by following
the five processing best practices I mentioned today.
Be flexible about your monetization model,
consider using AdMob to reach nonpaying users,
and utilize the new range of subscription models
to grow your revenue annuity.
Thanks for watching.