* The Business of Software

A former community discussing the business of software, from the smallest shareware operation to Microsoft. A part of Joel on Software.

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Moderators:

Andy Brice
Successful Software

Doug Nebeker ("Doug")

Jonathan Matthews
Creator of DeepTrawl, CloudTrawl, and LeapDoc

Nicholas Hebb
BreezeTree Software

Bob Walsh
host, Startup Success Podcast author of The Web Startup Success Guide and Micro-ISV: From Vision To Reality

Patrick McKenzie
Bingo Card Creator

In app purchases or ads for desktop apps?

Does such a model exists for Windows desktop apps?
Like displaying banners or videos or let users purchase something through the app?

In general, what is a good model to monetize desktop apps?
Mike_ Send private email
Wednesday, September 17, 2014
 
 
Sell users a utility to unlock their PCs and get their files back?

(Sorry, couldn't resist.)
Dmitry Leskov Send private email
Wednesday, September 17, 2014
 
 
"In general, what is a good model to monetize desktop apps?"

Create something that people are willing to pay for, then you don't need to worry about advertising, videos/banners in apps, etc.
Scorpio Send private email
Wednesday, September 17, 2014
 
 
I've looked into this a lot and never found anyone who provides in-app advertising for desktop apps.  The market must just not exist for it.

In-app purchases would be easy to implement but I think the market is different to phone apps and people buy what they need up-front.

The main way free programs are monetized currently is via installer bundling.  Basically getting the user to install a crapware app alongside your own. You get a small fee per install.

The other and best way to monetize is to sell the desktop app upfront.  It worked for me :)
DV Send private email
Wednesday, September 17, 2014
 
 
I think Trialpay are now offering in app offers. This might not be exactly what you are looking for, as this allows the user to purchase your app for free by following up an offer in the program. You then get paid by Trialpay.
Andrew Gibson Send private email
Wednesday, September 17, 2014
 
 
>In general, what is a good model to monetize desktop apps?

Make a product people want.  Let them try a crippled or time limited version for free. Charge them them for a fully functional version.

Ad based is picking up the crumbs from someone else's table. Why would you want to do that?

See also:
http://successfulsoftware.net/2011/08/04/selling-software-vs-selling-eyeballs/
http://successfulsoftware.net/2012/07/12/ads-vs-toolbars-vs-charging/
Andy Brice Send private email
Wednesday, September 17, 2014
 
 
I expected guys like Andy to write that idea off right away.

Don't just take his word for it. Test it. You may just have a product where it would work.

Try uTorrent or BitTorrent. They have in-product ads in their free versions. Must work for them.
Jaywalker Send private email
Wednesday, September 17, 2014
 
 
To make ads worthwhile you need a good amount of "traffic".

Do you have a highly popular application that has the needed daily users to make a click through rate of ~1% and click prices in the range of 5 - 15 cents worthwhile? Can you earn any nontrivial amount of money with that?

Ads is a big numbers game. Desktop software usually doesn't play in this league.

So if you don't have a highly popular file sharing client or audio player or something like that you probably would be better off with just selling your software.
Jeremy Morassi Send private email
Wednesday, September 17, 2014
 
 
Andy, you make advertising sound like a bad thing and according to it  Android apps that use in-app purchases or are ad-enabled (which is most) are foul too.

Why do you disregard that business model? Android proves that it's sustainable.

The question should be , why can't the same happen for Windows desktop apps too ?
Mike_ Send private email
Thursday, September 18, 2014
 
 
>Why do you disregard that business model? Android proves that it's sustainable.

Sustainable for who though?

My understanding is that most mobile app developers are making very little money. Not enough to cover their development  costs in many cases.
http://successfulsoftware.net/2010/07/11/iphone-app-store-economics/
Andy Brice Send private email
Thursday, September 18, 2014
 
 
The typical model for Android Apps is that the developer makes a free version that is "ad supported". In reality the developers doesn't make any money from the ads. The ads help sell the full version by acting as an intrusive annoyance, that drives the user to upgrade to the full version to get rid of them.

How many children playing Flappy Birds do you think click on ads for Car Insurance?
Andrew Gibson Send private email
Thursday, September 18, 2014
 
 
Also, in-app ads provide very little value for the advertiser in many cases.
http://successfulsoftware.net/2014/06/25/are-you-wasting-your-adwords-budget-on-in-app-ads/
When advertisers realize that, the value of ad clicks is going to fall still further.

Sorry about all the links to my own blog. But I wanted to back up my point with some data,

Anyway, its your business. You can take whatever approach you think will work best for your market. Let us know how you get on.
Andy Brice Send private email
Thursday, September 18, 2014
 
 
and what about in-app purchases, isn't that part of Androids monetizing scheme ? what's wrong with that?
Mike_ Send private email
Thursday, September 18, 2014
 
 
I think it depends on how the in app purchases are implemented. I've seen some hideous implementations of these, as well as some very good ones. I think the key difference is that on Android, purchasing in app is so seamless that it literally only takes a couple of clicks to complete or a little longer if you configure it to require a password to purchase.

Unless the same thing was was possible with downloadable PC software, then I don't think it would work. Especially, as these are likely to be micro-payments.
Andrew Gibson Send private email
Thursday, September 18, 2014
 
 
To the OP:  I asked the same question here:

http://discuss.joelonsoftware.com/default.asp?biz.5.857377.21

So you can read more discussion.  :)
PSB136 Send private email
Thursday, September 18, 2014
 
 
Personally, I can only bear with two types of in-app purchases:

- Feature unlocking and upgrades implemented as IAPs, mostly because there is no other way to implement them, at least in the iOS App Store. Example app: Paper.

- IAPs that are totally optional, though these are just donations in disguise. Example app: (the early versions of) Dots.
Dmitry Leskov Send private email
Friday, September 19, 2014
 
 
> The ads help sell the full version by acting as an intrusive annoyance,

Maybe they do in the short term. But in the long term they just condition people to expect software to cost nothing and degrade its value to "website" level.

How well that goes we already see on the mobile market where $2 is considered expensive and $5 a major investment.

I think the mobile market is lost. It's a big numbers game where you have to put insane amount of money into marketing to get a little return. Independent/small shops can't compete there where you need to put $2 million upfront for promotion to make $100k.

Just let's not go there with desktop software.
Jeremy Morassi Send private email
Friday, September 19, 2014
 
 
>Make a product people want.  Let them try a crippled or time limited >version for free. Charge them them for a fully functional version.

Andy, I don't think that this rule could apply universally
People most often these days, pampered by freeware, expect their software to be free.

In an already convoluted market, i.e. look at the System Utilities category , the user would choose the free alternative of a paid app, even if its functionality would be lesser.

So what would be the conversion ratio if you force them to get the paid version? and why wouldn't bundling with a toolbar, like for example Softonic or Download.com already do, deem as an alternative?
Mike_ Send private email
Tuesday, September 23, 2014
 
 
> In an already convoluted market, i.e. look at the System Utilities category , the user would choose the free alternative of a paid app, even if its functionality would be lesser.

Don't enter that market then?
Jeremy Morassi Send private email
Friday, September 26, 2014
 
 
I agree with Andy Brice.  Create an app that people are willing to pay for.  Either provide a timed trial or lock some of the better features. 

I have tried both models.  In my experience direct ALWAYS beat the advertising model by at least a 5x ratio.  I have seen results of as much as 100x better when the product converts well.

Also, being ad sponsored usually makes your margins so tiny that it makes it impossible to buy advertising or build a content marketing budget to promote your product.
C. Stark Send private email
Saturday, October 04, 2014
 
 

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