In-App Purchases are the New Black

Friday 8/12/11 08:56am
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Posted By Adam Riggs-Zeigen
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If you’re in the business of developing mobile apps, by now you have undoubtedly read about the powerful and profitable nature of using in-app purchases within your apps.

In-app purchases are certainly all the rage as a business model these days and for good reason.

Last month, Flurry analyzed the top 100 grossing games on iOS and compared the revenue generated by freemium vs. premium titles. They found that revenue from free games has overtaken revenue generated from premium games within this segment.

Zynga, which makes the popular social game, FarmVille, recently filed with the Securities and Exchange Commission for an initial public offering and showcased just how much money they are making from virtual goods (nearly $225 million in the first quarter of this year alone).

With in-app purchases you can gain significant benefits, such as:

  • Reducing the initial purchasing risk for your customers, by offering your app for free
  • Generating more revenue per user, by not limiting sales to a single transaction. By creating an app that uses in-app purchases, revenue from a small percentage of transactions, can make up the bulk of your revenue.
  • Monetization opportunities outside of the traditional shopping experience, where you have more control over the terms of the transaction

However, that does not mean that apps built using this model are all sunshine and roses. As a developer using this model, your entire thinking around user support, features, your content roadmap and customer value are all turned on their head.

Not only that, you also have to be smart about how you use your in-app purchases. Some users need to be saved from themselves so they don’t rack up a whole bunch of charges and then complain. All that will do is create headaches for your company, your app and the industry as a whole.

Without proper planning, expectations and controls, your in-app purchases can backfire, resulting in at best an unpopular, poorly performing application and at worst the subject of a carrier or legal inquiry.

For those of you ready to take the leap or fine-tune your current strategy, here’s something you don’t want to miss.

On August 17th we will be hosting a one hour live webinar, Using In-App Purchases to Generate Revenue on Brew. The webinar will be split into two portions:

First, I will cover the business case for in-app purchases and why you should consider creating a Brew app using this model. Despite the stats we’ve seen so far, some developers I’ve talked to have been hesitant to embrace this model because it’s new and less predictable. I’ve got some interesting data to share and even some case studies on Brew apps already using in-app purchases, to help with your decision. I’ll also share some caveats, gotcha’s and best practices so your app doesn’t run into issues.

During the second half of the webinar, Dale Aoto, from our training team, will discuss how you go about getting started with the Application Value Billing (A-VB) extension – which enables you to build in-app purchases into your Brew apps. While he won’t be covering actual application development, he’ll give an overview of the things that you need to know when creating and submitting A-VB enabled apps for distribution.

Brew offers you a number of ways to monetize apps, including one-time downloads, monthly subscriptions, demos or use-based models. Now with the A-VB extension, you can take advantage of the latest business model to generate revenue from your Brew apps.

Register for the webinar