Monetizing an Anonymous Social Media App (Hood App)
Some context about Hood
Hood is a new-age Anonymous social network that allows users to share their true stories without the fear of being judged.
Introduction:
Anonymous social media apps thrive by providing safe spaces for unfiltered, genuine communication. While fostering user trust and engagement is essential, it's equally important to implement revenue-generating strategies without compromising the user experience. This case study explores how we introduced monetization into our anonymous social media app through three user-centric features: Paid DMs, Post Boosting and Streak Revival.
Before jumping into the feature, let me give you some context and share a few questions that came to my mind while designing. Eventually, I found my answers through research and conversations with people.
Why Will Users Pay for DMs in an Anonymous App? It's like taking us back to 2007.
Initially, I wondered why users would pay for DMs in an anonymous app. However, users are willing to pay because they want to stand out, signal genuine intent, satisfy curiosity, and connect with influential users. Paid DMs enable meaningful, private conversations, reduce spam, and offer valuable opportunities for personal connections—all at a low cost. After conducting some research, I found a convincing answer for myself.
Standing Out: Paid DMs cut through the noise, ensuring messages are noticed in a crowded, anonymous space.
Genuine Intent: Paying signals seriousness, making messages feel more valuable and meaningful to recipients.
Curiosity: Anonymity sparks intrigue—users pay to ensure their message gets attention and satisfy curiosity.
Exclusive Access: Paid DMs offer a way to connect directly with influential or interesting users. Meaningful Connections: They enable private, one-on-one conversations beyond public posts, fostering deeper interactions.
Quality Assurance: A paywall reduces spam and trolling, ensuring only genuine messages come through.
High Value, Low Cost: A small fee offers the chance for valuable outcomes, like advice, friendships, or connections.
The Value of DMs in an Anonymous App
I questioned why not use comments in Hood, since it’s fully anonymous, but realized DMs still add value, even in an anonymous app.
Personalized Interaction: DMs allow tailored, focused conversations that aren’t possible in noisy public threads.
Avoiding Public Exposure: Even in anonymity, users might prefer not to discuss sensitive topics openly.
Building Trust: DMs create a space for deeper, ongoing conversations that foster trust without revealing identities.
Direct Access: DMs ensure a message is seen and considered, unlike comments that may get lost in a crowd.
(Even with anonymity, DMs enhance the experience by enabling private, meaningful, and direct connections.)
Monetization Strategy
As I mentioned in the introduction above, we planned to monetize the app with three features: Paid DMs, Post Boosting and Streak Revival. We also didn’t want to run any advertisements because they would affect the user experience. Below is the breakdown of the strategy for these three features.
Post Boost
What It Is: Post Boost allows users to increase the visibility of their content within the community for a set duration.
How It Works:
* Users pay a small fee to boost their posts for a specified period (e.g., 24 hours).
* Boosted posts are given higher placement in the feed or tagged as "Boosted" for maximum exposure.
* Boosted posts are seen 3x more often than regular posts!
Why It Works:
* Users wanted an effective way to make their posts stand out without being intrusive.
* The subtle promotion boosts engagement and draws attention to valuable content.
Results:
* 38% adoption rate
* Increased post visibility by 4x, leading to higher engagement
* 15% MAU increase
* Average Revenue Per User (ARPU): ₹600 for monthly paid users
Paid DMs (Superchat)
What It Is: Paid DMs allow users to send anonymous, direct messages to others while maintaining privacy and ensuring quality interactions.
How It Works:
* 1 Credit = 1 Superchat Accepted. (1 credit = ₹18.)
* 1 Credit = Up to 5 Superchat Requests Sent.
* If none of your requests are accepted, the credit will not be refunded.
* Superchat requests automatically expire after 7 days.
* Unlock Chat: When a user sends 5 requests with 1 credit, and 1 chat request got accepted. If the user has no credits left, the chat will be locked with a blurred message. The user can unlock the chat by purchasing more credits; until then, the chat remains locked.
Why It Works:
* DMs provide a deeper, more personal connection compared to public posts.
* The paywall ensures only genuine users engage, reducing spam and fostering meaningful conversations.
Results:
* 5% adoption rate
* 30% reduction in spam, leading to higher-quality interactions
* 8.2% adoption rate for streak revival, including free revival button
At the time, we didn't have any DMs in the Hood app, and the founder had the vision to introduce DMs, but with a twist. We also received a lot of feedback from users to introduce DMs, but as a free feature.
There were so many screens that I couldn't fit them into the correct screen size. Because of that, I had to reduce the screen size. If you're interested in seeing how the screens look, please try zooming in or open the image in another tab for a better view.
Streak Revival
What It Is: The Streak Revival feature allows users to revive their activity streaks by paying a small fee within 24 hours after breaking it.
How It Works:
* Users are notified when they break their streak, and a 24-hour timer starts.
* Users can quickly revive their streak by paying 1 credit = ₹18.
Why It Works:
* The streak feature drives engagement by creating a sense of achievement.
* Users value the ability to "save" their streak, making it a gamified incentive for consistent app usage.
* Initially, when we launched the Streak Revive feature, we gave a free Streak Revive to everyone as a token of appreciation. This might be one way to view it.
Results:
* 32% (old users), 23% (new users)
* Increased engagement with 2x more frequent logins for users with active streaks
* 79% of users felt more motivated to maintain their streaks
If you are more interested in Streak, you can find more detailed information about it in the link below.
https://dribbble.com/shots/24849094-Streak-Gamification-in-Hood
App Store and Play Store Revenue Policies
If you're selling digital goods or services (e.g., in-app purchases, subscriptions, virtual items), the App Store and Play Store take a 30% cut (sometimes reduced to 15% in specific cases). However, for physical goods or services (e.g., e-commerce, food delivery, ride-sharing), no commission is required since users receive something tangible in real life. To address this, we devised a solution that is working in our favor. I can't share the exact details here, but if you're interested, let me know!
Apple has it’s own guidelines for in-app purchase, which you can check here: https://developer.apple.com/design/human-interface-guidelines/subscriptions/overview/.
Opting for a Third-Party Service for Cost-Effective DM Feature
Creating the DM architecture for both the Backend and Frontend would take more than a month. Since it was an experiment, dedicating that much time and tech bandwidth with limited resources to a single feature didn’t make sense. So, we decided to partner with Sendbird. Sendbird provided all the necessary input section APIs, and only users who paid for the DM feature are able to use it. This means Sendbird will only charge us for the paid users. If we pay Sendbird ₹50, we earn approximately ₹85, which means we are still making a profit after giving Sendbird its cut. With this approach, we cover Sendbird's fee and our server costs. If we had built the input feature in-house, the server costs would have spiked significantly, exceeding what we currently pay Sendbird. Additionally, we would have needed a dedicated engineering team and ongoing maintenance.
Conclusion: In cases where building a feature in-house is uncertain and involves significant financial implications, opting for a third-party service proves to be a more cost-effective and scalable solution. It allows us to leverage external expertise and resources while keeping costs predictable and manageable.
Business Impact Key Metrics
Engagement Growth: Increased daily active users (DAU) by 15% MOM due to the streak feature
Post Boost MAU: 15%
Average Revenue per User (ARPU): Approximately ₹600 for monthly paid users
Streak Revival Adoption Rate: 32% (old users), 23% (new users)
Challenges & Learnings
* Users do not want to pay for DMs because they are generally free on other platforms.
*However, there is a certain percentage of users who use DMs regularly, and due to this, we still have the Paid DM feature.
*Users wanted more credits; currently, our highest option is 10 credits for ₹90, and we are now considering introducing 25-credit and 50-credit packages.
*Balancing pricing to avoid over-commercialization was key to maintaining user trust.
*Users needed clear communication on the benefits of streaks and the revival options.
Potential Enhancements:
* Introduce tiered boosting options or analytics.
* Explore other monetization ideas like subscriptions, premium features, or virtual gifting.
* Offer rewards for achieving long streaks (e.g., free boosts or DM credits).
* Add streak analytics to track milestones.
* Bundle streak revival offers with post boosts for value-driven monetization.
* Launch a referral program to reward users for inviting others.
* Create a premium user tier with perks like unlimited DMs, exclusive badges, higher post visibility, and advanced analytics.
* Reward high-quality content creation with credits, badges, or other virtual rewards.
* Offer time-limited promotions with discounts or bundles for DMs, boosts, or streak revivals.
* Introduce something like Hood Premium similar to Twitter, but with a twist.
Conclusion
The integration of Paid DMs, Post Boosting, and Streak Revival demonstrated how user-centric design could drive monetization without compromising trust. By aligning features with user needs and app behavior, we successfully balanced revenue generation with a seamless user experience.
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Get in touch: souravsrivastava123@gmail.com • Linkedin