How do you monetize your product? Here are 3 channels to help you sort out

How do you monetize your product? Here are 3 channels to help you sort out
As dividends disappear and capital returns to rationality, investors pay more attention to ROI , the monetization of traffic becomes increasingly important, and big data is repeatedly brought to the forefront. Everyone has different opinions on how data can empower traffic monetization, and many people have different understandings. However, it should be noted that the data here refers to behavioral data rather than transaction and statistical data . In the PC era, bank deposits and credit and government demographics all require data registration, and transactions and statistical data have long existed. High-value data is personalized and can record a person's series of behaviors and help companies provide point-to-point personalized services. For example, if a user regularly buys rice in an online supermarket, the company can analyze the user's rice needs based on the user's rice buying behavior data, and push rice-related information before the user's rice runs out, thereby reminding and guiding the user to place an order to buy rice. Compared with statistical data such as user gender, behavioral data appears to have more extended value. So, in this era where data empowers traffic monetization, what are the effective ways for mobile applications to monetize? 1 Product extension - e-commerce When an application gathers people with specific attributes, the company can extend to the upstream to develop and sell hardware, which is a direction for monetization. For example, after having a large number of users, Meitu created the Meitu mobile phone. By the first half of 2016, the revenue share of Meitu mobile phones had reached 95%. Similarly, after trying advertising monetization, Moji Weather also developed the smart hardware "Air Fruit". Of course, companies will face greater challenges when entering the hardware field by relying on the single-point functional advantages of applications. After all, for enterprises, product selection, quality control, supply chain, sales chain, etc. are all new areas. They not only have to face competition from similar products, but also have to add new value to their products. Otherwise, users can rely on application software to meet their needs, so why bother buying hardware? Therefore, it is difficult to extend the monetization method from applications to hardware sales. Even if there are outstanding ones, they often only win applause, and the actual monetization benefits are relatively limited. In addition, there has been a phenomenon in media application platforms in the past one or two years, that is, self-media are trying to transform into e-commerce . The current situation is that there are not many investments and successful cases of self-media transforming into e-commerce. To do e-commerce, there must be transaction conversion . The key to transactions lies in the number of users and product gross profit. Community alone is not enough to attract investors to inject capital . Kuaishou and Meipai can help self-media try e-commerce monetization and are favored by investors because they have a sufficient user base as platforms and have an obvious long-tail effect.  2 Value-added Services Value-added services generally refer to virtual services grafted on a free basis, which is the monetization method adopted by many applications. Game apps mainly use "acceleration" to encourage users to pay, allowing users to buy time with money. For example, in Tencent's Tiantian series of games, playing a game requires consuming "hearts". Tencent only provides a certain amount of "hearts" every day. When the "hearts" are used up, users can either share the game to earn "hearts" or buy "hearts" with money. Social applications mainly promote consumption through virtual goods such as emoticon stores, such as QQ Show. Tool applications mainly provide more advanced functions and privileges to promote consumption. For example, Evernote accounts have three types: free, standard, and premium, corresponding to 60MB, 1GB, and unlimited storage space as well as other privileged services. If users want to use high-level services, they have to purchase them with money. The monetization of value-added services is undoubtedly a more ideal monetization model, which can encourage users to make upfront payments and make users have very good stickiness . However, many developers will try to place some basic functions into value-added services to encourage users to pay, which will inevitably lead to a large number of user losses. Of course, relying on value-added services to realize monetization is a test of the company's operational and maintenance capabilities. Generally speaking, a company's product department and operations department are separate. The operations department bears the KPI requirements and has a heavier responsibility for monetization. In addition to exploring user needs and connecting with product departments , the operations department also needs to be able to grasp user psychology and continuously improve user psychological expectations . The experience of Tencent’s membership product department is worth learning from . At the beginning, they divided QQ members into 6 levels according to different growth values, and matched them with different privileges to make the levels sufficiently different. When many users reach level 5, they immediately launch level 7 and provide level 7 growth tasks to ensure the health and continuity of the level, thereby extending the monetization space for traffic. The Gold V level launched by Weibo has the same effect . 

 3 Advertising Services There is a line in "Iron Man of Silicon Valley": It's too bad that the smartest minds of our generation are thinking about how to get people to click on ads. This was said by Jeff Hammerbacher, an early Facebook engineer. As an entrepreneur , businessman and science fiction enthusiast, Musk makes my blood boil, but I personally have other thoughts about the above sentence. Advertising is valued because it accounts for half of Internet revenue and is the most mature business model . Advertising has made a significant contribution to promoting the scale development of the Internet and creating social value. 

 A report from Analysys International shows that the size of China's mobile marketing market reached 163.39 billion in 2016, with a growth rate of 80.5 % . By 2019, it is expected to double to 355 billion. It can be seen that the value of advertising is still growing and will continue to be an effective means of app monetization. The main types of advertising services for apps include e-commerce shopping guides, brand activities , and app distribution . Most apps can support e-commerce shopping guides and brand activity advertising, but app distribution is more inclined towards super apps that are must-haves. As long as users can get the apps they want more quickly, the monetization potential of app distribution is undoubtedly huge. At present, the competition in the domestic application distribution market alone is extremely fierce. Baidu, Wandoujia , Tencent App Store , and 360 Mobile Assistant are showing a trend of division , and there is no oligopoly. The reason why super APPs that are not must-haves are not successful in application distribution is because “whoever controls the entrance controls the world”. If it is not a super app that is a must-have for installation, but you want to monetize it through app distribution, then it will be stretched in terms of conversion scale and sustainability. For example, applications such as Toutiao , Baidu, and Youku Video all have built-in application markets and game centers, but they have always found it difficult to grow big. Didi had previously tried to do distribution, but ultimately failed. In addition, if we observe app advertising as a whole, we will see a change: in the past, app advertising was mainly based on selling ad space , but now advertisers are gradually purchasing user groups instead of single ad space, and purchasing behavior has become more programmatic. Why is there such a change process? This is mainly because technological advances have supported the three core values ​​of advertising: accurate target audience positioning, quantifiable analysis of advertising effects, and efficient advertising delivery , which in turn has spawned many DSPs , DMPs, SSPs, Ad Exchanges, and Ad Network platforms.  Application monetization can be achieved through the mainstream methods of product extension, value-added services and advertising services . A small proportion of applications can also be achieved through financial payments. However, from a practical perspective, advertising services are still the most efficient method. Today, advertising has clearly entered the digital age. So, how can we better utilize advertising to monetize our apps? How to balance the relationship between advertising monetization and app experience? How to find more opportunities in the field of advertising monetization...these are questions that app developers should think about.

The author of this article @孙良Jedi compiled and published by (Qinggua Media). Please indicate the author information and source when reprinting!

Product promotion services: APP promotion services Advertising

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