Monetizing Android Apps

How I Achieved $15,000 Daily Sales

on Google Play

Katsuaki Sato (佐藤 航陽) CEO of Metaps Inc. http://www.metaps.com/ facebook：www.facebook.com/katsuaki.sato Twitter：@metaps_sato

Introduction

Katsuaki Sato (佐藤 航陽) CEO of Metaps Inc. http://www.metaps.com/ Katsuaki Sato started his first business when only 15 years old. After entering university, he successfully launched a search engine/social media marketing business in 2007. In 2011, he launched a smartphone developer platform business with operations in Tokyo, Singapore, Hong Kong, and Silicon Valley, and strives to help support the monetization needs of developers around the world.

facebook：www.facebook.com/katsuaki.sato Twitter：@metaps_sato

“The 3 Need-to-Knows For Success in the Global Smartphone Market” (pub. Nikkei Publishing Inc.)

http://amzn.to/PhUgLD

Author of the Smartphone Book: ITmedia Blogger Android×Global (Japanese only)

http://blogs.itmedia.co.jp/android/

No.1 “Hit Books” Category Amazon JP

Ranked No.1 in Amazon Japan

“Hit Books”

What Do I Do?

© 2012 Metaps.inc

App Monetization Platform “Metaps” Operates a Reward Ad Network

Advertising

Low-Risk User Acquisition

Monetization

Earn Money Quickly

CPI-AD （Cost per Installation Ads）

Reward Ads (Ads = Payments)

Reward Ad

Network

* Reward ads are used within

applications for monetization.

They provide similar value to the

end-user as an in-app purchase,

and is provided in exchange for

interaction with the ad offer.

The Metaps publisher network for Android apps grew 3,357％ in half a year.

媒体の消化件数

3,357% Growth

over 6 Months

Ad Consumption

by Publishers

Jan Feb Mar Apr May Jun

Publisher Network Grew 3,000％+ during 2012/01-06

Reason: Our publisher clients’ sales have increased

Since reward ads are treated as an alternative method for purchasing in-app content, our publisher network cannot grow unless our publishers sales (in-app purchases) increase.

CPC Ads Reward Ads

Proportional to in-app impressions Proportional to in-app sales

Cost per Click Model Cost per Install Model

Comparison

The reward ads business model grows in tandem with the app publisher’s in-app sales

Revenue Growth Revenue Growth

Publisher Revenue Publisher Revenue

Reason for Our Rapid Growth in Publisher Client Base

Can Apps Actually be Profitable?

Only the top 1% of publishers generate sufficient profit

There are around 40 apps from AppStore + Google Play which generate monthly sales over $125K. Since there are many apps that support both OS and multiple top ranking apps owned by the same company, there are actually only about 25 domestic companies that are generating monthly sales of over $125K. (*excl. sales from in-app advertisements)

Google Play AppStore

Top Grossing

1～5th $500K - $1,250K $750K - $2,500K

Top Grossing

6～10th $250K - $500K $375K- $750K

Top Grossing

11～15th $125K - $250K $188K - $375K

Top Grossing below 15th

Below $125K Below $188K

USD 1 = JPY 80

Actual Attempts to Monetize as a Publisher

One cannot figure out what the mechanics are just by looking at Google Play rankings or App Annie data, or even

through operating an ad network.

It was necessary to put oneself in the shoes of an Android app developer to best figure out the rules for monetization.

With the help from our clients, we decided to completely take care of their monetization needs, burdening the costs

and risks ourselves.

Through trial and error, we accumulated successful (and unsuccessful) case study data by working directly with

developers on their app content

Monetization

Black Box

Finding the Formula for Success on Google Play

There is yet no formula for global success in the Android app market, and therefore profitability is

low despite the large market share. By finding what the formula is (like what is known to work for

AppStore), there is the potential for profitability exceeding that of AppStore.

Review Site Promotion

Organic Traffic from Increase

In Ranking

Burst Campaign

App Release

20,000 DL in 24-hour Period

App Release

AppStore

Detailed Process and Numbers are Unknown

With the help of our clients, we looked for any patterns to succeed in the market

Apps that Have Generated Daily Sales in Excess of $15k

Details Notes

Genre Game Main target: Male Users

Free/Paid Free

No account registration required. Minimal interaction

needed to start using the app.

Monetization Model Freemium Model +

Reward Ads Sell virtual items and/or

virtual currency inside app

SNS or Other Platforms None Manage end-users and/or

community without reliance on social gaming platforms

Development Hybrid

(Native + WebView)

Mostly based on WebView but partially native app.

By undertaking all marketing activities ourselves, we compared the cost effectiveness of each

advertising method, and analyzed its effects on ranking. Summarized below are the type of apps

that produced the best results.

***App names withheld (confidential)

What Was Done to Achieve Daily Sales Over $15k

Although there were many different trials, there were really only 2 types of promotions that were

tried at the initial release of an app.

1. Reward Ads

2. Review Site Tie-ups

Leveraged the Metaps reward ad network. After initial release, around 17,000 users were acquired in a week by launching campaigns targeting app publishers only.

After selecting several review sites to publish on, we initiated promotions in sync with the reward ad campaigns. During the initial month, articles were placed at a pace of 1 a week.

Ad Campaigns Targeted to Tap in to Organic Traffic

Google Play Categories

Apps

Games

Top (Paid)

Top (Free)

Top New (Paid)

Top New (Free)

Latest

Top Page

Category

Top Grossing

Top (Paid)

Top (Free)

Top New (Paid)

Top New (Free)

Category

Top Grossing

Top (Paid)

Top (Free)

Top New (Paid)

Top New (Free)

Top Grossing

Top (Paid)

Top (Free)

Top New (Paid)

Top New (Free)

Top Grossing

Organic traffic was acquired by increasing exposure

in yellow categories in the first month, which enabled tapping into more

sustained traffic by reaching higher rankings in orange categories.

If we were to simply advertise based on cost effectiveness, most media options would not pass the

bar – therefore ads were placed on the understanding that they were investments to maintain an

inflow of organic traffic. We especially focused on the display order in each Google Play category.

The First 30 Days in Google Play are Critical

Apps are listed in any Top New categories for 30 days after the initial release.

The success hinges on how many new users can be acquired while it is listed in this category.

“Top Grossing”

“Top Free” “Top New Free”

After publishing the app to Google Play, apps are

listed in this category for only 30 days.

By leveraging the momentum generated with organic traffic in the “Top New” category, it possible to rank higher in the “Top Free” and

“Top Grossing” categories.

30th Day

Data from Actual Ranking Changes and Organic Traffic vs Ad Campaign

In the initial week, 17K users were acquired along with a rise to the No. 15 rank in the Top New (Free)

category. From there, we were able to maintain a higher position in ranking by acquiring 2-3K users daily

through organic traffic. Each week thereafter, we placed tie-up promotions on select review sites, in

order to drive core users to the app.

Appearance on Review Sites

Blu

e =

No

. o

f D

aily

In

sta

lls

Red =

Rankin

g

No. of Installs from Organic Traffic

No. of Acquisition from Reward Ads

“Top New (Free)” Ranking

Day 7 Day 14 Day 21 Day 28

Aiming for Top 10 in Sub-Categories Can Produce Results

If the app rises to around Top 10 in “Top New Free”, the same app will also make Top 10 in its smallest sub-

category (i.e. “Puzzle” inside “Game”). Users from this category are not only highly motivated, the ranking

can remain consistent even after 30 days, allowing anywhere from 500 to 1,000 daily acquisitions.

Ranking tends not to drop

after attaining a higher rank

in the smaller sub-categories

Google Play ranking

increases gradually

compared to iOS

30th Day 60th Day

Notes on Launching Ad Campaigns : Period

If 17k users are acquired in a week, or even if the same numbers are acquired in a day, the ranking will

continue to increase for ~7 days after launch and will attain a rank around Top 15 in “Top New Free”.

After the 8th day, increase in ranking tends to slow down or hover in the same position. At this point, it is

likely that the average number of acquisitions, user ratings, and user activity numbers come in to play to

determine ranking. The overall lack of fluctuation in Google Play ranking can be explained if data averages

are used in its algorithms.

Common Phenomena Observed

• Ranking tends not to rise or fall sharply over time. • Initial climb in ranking will change pace around the 8th

day from release.

Possible Theories Based on Observation

• Data is likely processed over a 1 week period. (not 24hrs) • The averaged number of acquisitions for the past week are

likely used. • The reliability of the numbers (which is a reflection on the

reliability of the content) is made using averages.

Unlike AppStore, it is evident from the way Google Play ranking fluctuates that not only the “quantity” but

also the “quality” of users are taken into account. With this knowledge, we placed ads in publisher

apps that have users who are familiar with and use native Android apps on a daily basis. Since

users from the web are generally not app users, there was a significant difference in retention rate.

Native App WEB

[Main Publishing Media] Game / Entertainment related apps

[Main Publishing Media]

Point sites / Major SNS

Lead users from web to DL

Difference in “quality” of user

Most users do not end up using the app

Ads were

placed here

• Ranking fluctuates based on

short term DL numbers.

• Quality is not as important.

User retention rate

is extremely low

Notes on Launching Ad Campaigns : Media Placement

Android

iOS

Comparison of AppStore and Google Play

Short Term (24 hr period)

Rating Period Medium to Long Term (7 - 10 day period)

Total Downloads Reference Score Average User Acquisition score

Apps that are trending are displayed in real time.

Display ranking Apps that are trending AND being used are displayed.

Scrutinized by Apple users opinions

Quality of App Calculated through algorithms based on user appraisal

Frequently Fluctuates Ranking Fluctuation

Fluctuates Less Frequent

Number of Acquisitions and Ranking Fluctuation

Through trial and error, we found that app ranking will increase to a certain point based on the number of

user acquisitions and ad placement. Also, depending on app presentation (icon, title naming, etc.) the

amount of organic traffic generated was found to differ by up to 1,000 downloads.

Ranking / Category Apps Games Game Sub-Categories

“Top Free” 155th 45th 4th

“Top New Free” 15th 12th 1st

Rankings when 15K – 20K users are acquired in the initial week from launch

Average Daily Organic Traffic： 2,000-3,000 DLs

Notes: • Of all game sub-categories, “Casual” is the most difficult to get high rankings on.

• Ranking can vary greatly depending on competitor app releases.

• Daily organic traffic numbers can differ by over 1,000 DLs, and depends on

presentation of the app icon, screenshots and title naming.

Pros & Cons of Review Sites

• User incentive/motivation is high

• High possibility of acquiring core users

• Cost efficiency is hard to measure

• Results vary greatly depending on

how apps are introduced

Pros Cons

Important points when working with review sites

• Brand awareness of the site vs cost efficiency often does not correlate.

• There are many famous sites that do not generate sufficient ROI.

• In contrast, there are many small/medium sites that generate good results.

• Carefully check app category compared with the review site’s user base.

• Depending on how the app is reviewed, the results can vary by over 5 times.

• Best results can be had when synced in time with events or campaigns.

Aim to Tap More Organic

Traffic from Increase in

Ranking

Aim to Enliven App Community

Through Increase in Fan Base

Acquisition of Active Users

from Similar Target Segment Acquisition of Fewer

Core Users

Launch App by Mixing Reward Ads + Review Sites

Reward ads are good at acquiring a large number of users in a short time, but if the media it is

displayed in is not selected carefully for its user base characteristics, incentive towards the reward ad

will be low. On the other hand, review site users are highly motivated but the potential number of

acquisitions is comparatively low. So in the first month, campaigns were launched in a way so that

either method would reinforce the weakness of the other.

Reward Ads Review Site Promo

Increase user activity through acquisition of

organic traffic and increased fan base

Actual Results from Mixing Reward Ads + Review Sites

In the end, we were able to acquire around 19K users by using both reward ads and review sites, but also

40K users from monthly organic traffic; and an daily active user ratio of ~25% of the total user base.

At this point, we were able to achieve daily sales of $15K on Google Play.

DL : 60,000 DLs

30th day of Campaign

Result

Acquisitions from Campaigns

DAU：15,000 users

Organic Traffic: 40,000 / month

Daily Sales：$15K

Reward Ads: 17,000 users

Review Sites : ~2,000 users

Total Acquisition: ~19,000 users

Reached Top 15 in “Top Grossing” and Top 10 in “Games” categories.

Monthly organic traffic of 30,000 - 40,000

Tapping in to the Organic Traffic Cycle Makes the Next Month Easier

If the app is able to maintain a position within the Top 20 of “Top Grossing”, even after the app disappears

from the “Top New” category (after 30 days) and even without additional advertising, there is a constant

inflow of around 1,500 daily users from organic traffic, which effectively generates a positive feedback cycle.

Ranked in Top 10 of “Top New Free”

Ranked in Top 20 of “Top Grossing”

Daily organic traffic of 2,500 - 3,000

Monthly organic traffic of 40,000

Daily organic traffic of 1,000 – 1,500

30 days from Launch

After 30 days from Launch

What Was Done After the First 30 Days

Although new users can be acquired through sustained organic traffic, once user churn starts to overtake,

overall sales numbers cannot be maintained. Therefore, we started to tackle the issue of maximizing LTV

through active user engagement and retention strategies.

1. Minimizing Existing User Churn

2. Advertising on CPC Networks

A number of measures were implemented such as improving user app launch frequency through push notifications, integrating reward ads to mitigate churn of free-to-play users, updates for events and new app functionality, and improving SNS posting functions.

Rather than just aiming for large acquisition numbers, ARPPU and expected LTV from several ad networks were calculated focusing on efficiency vs cost in order to acquire users over the long term.

Overall Sales Did Not Decrease as Much

Even though user acquisition through organic traffic + CPC remained, the ARPPU did not change much

and overall sales did not to decrease as much as was originally expected. This is likely due to a lack of

competition and the number of apps that are strong enough to launch themselves high into the Top

Grossing categories.

Once the app reaches the Top 20 in

“Top Grossing”, sales remain level

30th Day 60th Day

Google Play

“Top Grossing” Ranking

• Competition is not as fierce as AppStore

• User acquisition strategies have not yet

become common knowledge

Reasons why sale do not fall:

Android Campaigns Need Coordination with Content

Before launching your promotion, there is one important point that needs to be addressed; There must be a

user content engagement strategy, and a promotion campaign coordinated to run in sync. Unless the

content leaves a favorable impression with the users, it will lead to a high amount of churn, and ultimately

reduce the money available to invest in your next round of advertisements.

Further

Increase

In Sales

User Base

Shrinks: EoL

Re-Invest

With More Ads

Reduce Ad

Expenditure

Due to Low

ROI

Users Increase

and

Sales Increase

Sales Fall

Due to

User Churn

Start

Promotion

Campaign

Start

Promotion

Without

Preparation

Content

Strategy

In Place

No Content

Strategy

Content Engagement and Promotions

Positive

Cycle

Negative

Cycle

Example of Failed Projects and Campaigns

There were just as many failed cases as successful ones.

The following cases did not achieve decent results.

Requiring users to login / register account at start of app

Since most users expect to be able to use an app straight away after downloading, many users simply uninstalled the app and did not return when registration was required. Due to this, the calculated cost of acquisition increased to the point where none of the advertising options remained cost effective.

App file size was too large (50MB+) and only downloadable by Wi-Fi

Many users just gave up, if were forced to download apps with file size of over 50MB or took longer than 30 seconds to launch. As with the case of account registration above, the cost of acquisition increased due to this hurdle.

Not enough testing before app release There are quite a few developers who do not perform adequate testing before publishing to Google Play, and start their debugging + verification on actual handsets after release. The critical period while listed in “Top New” categories during the first 30 days will be wasted by fixing bugs. Additionally, if a bug is found by users they will tend to give a low “1” star for its rating. Even if marketing activities are launched after bugs are fixed, it becomes even more difficult to reach organic traffic at higher rankings, due to the low ratings.

80% of Companies Fail to Choose the Right Partner

Proposals only contained “number of user acquisitions” & “acquisition cost” of CPA/CPI →No advice or suggestions about app content were given.

Past results are described ambiguously like “Best Seller” or “No.1 Overall Ranking”

→The process of how they increased sales is not explained.

Proposals focus on maximizing their own revenue, instead of optimizing results for client.

→Be weary of recommendations to target channels that offer maximum consumption

rates or best volume for your advertising budget

The important point is that your partner should not only be able to provide simple media-planning and acquisition numbers, but also be able to give direct advice and strategies related to the content. Depending on the type of freemium app content, the LTV, DAU and ARPPU can vary greatly, and strategies will differ appropriately.

You should always be critical of actual sales and revenue results. There are in fact numerous high brand value apps out there in the market that have failed to monetize. If the partner is not able to explain in detail the process required to increase sales, you have the right to be suspicious. Don’t forget to ask which apps they are basing their results on as well.

Caution is advised if a company is not thinking on your behalf for the long-term, and starts proposing campaigns to maximize their insertion order volume in the short term. There is a high possibility that the company is not trustworthy when it recommends a plan that focuses on using up the budget, rather than focusing on its cost performance.

We found monetization was difficult to achieve when we partnered with companies (such as ad agencies and

consultants) that behaved in the ways listed below. The important thing is to look for trustworthy

companies regardless of size or brand.

Companies that are Successfully Monetizing Android Apps

After working with numerous developers, the companies who successfully generate sales in the Android

market have the following things in common.

The point of contact is a heavy app user and well versed in Android apps

We often see successful companies who have representatives that are frequently using not only their own apps but their competitor’s ones – often they will even be carrying both iPhone and Android handsets. On the other hand, if they are not touching Android apps and rely solely upon industry news on the internet, they tend to be from unsuccessful cases.

Company specializes in their strengths and makes good use of external partnerships

A company that focuses on their strengths while leveraging other vendors will often produce good results. In contrast, when companies try to do everything internally they tend to spread resources too thin and projects often fall apart.

The point of contact is proactive about getting their own data in real-time

Not only do they rely on news from the internet or from publications, they will personally attend events and make appointments to get real-time information on the ground. As the smartphone industry trends tend to change quickly, the information you acquire while sitting in front of your PC is likely to already be old.

-Offices-

Metaps Inc. （Japan）

FORECAST SHINJUKU AVENUE 5F, 2-5-12,

Shinjuku, Shinjuku-ku, Tokyo 160-0022

Metaps Pte. Ltd. （Singapore）

100 Cecil Street, The Globe #05-01,Singapore 069532

Metaps Hong Kong （Hong Kong）

Suite 1008 Prosperity Millennia Plaza,

663 King's Road, Quarry Bay, Hong Kong

Metaps International （U.S）

10 South 3rd Street, Suite 209, San Jose, CA, USA

95113

Metaps Inc.

URL: http://www.metaps.com/

Founded: Sept. 2007

Capital: 447.52 million Yen

CEO: Katsuaki Sato

Audit Cooperation:

KPMG AZUSA LLC

Metaps International Metaps Inc.

Metaps Pte, Ltd.

Metaps Hong Kong

China Europe

Africa

South Africa

Challenging the global market, and aspiring to

be a leader and role model for the next

generation of Japanese industries

An Overview of Metaps

For any inquiries related to

Android App Monetization,

please contact us at:

sales@metaps.com