What is app monetization?
Nowadays app entrepreneurs have a dime a dozen of ways to increase the revenue generated by mobile applications. And app monetization has become a lucrative option for app development agencies to deploy apps since more users are flocking to mobile screens. More users but still no money is following? The easiest way to cover the app development outlay is to set a proper monetization strategy, but it’s much easier to say than to bring it to life.
The central question “How to monetize the app” remains open for most app entrepreneurs today. Of course, you can charge for an app installation but a paid download is believed to be one of the hardest ways to make an app profitable. In our today’s article, we are going to take you through the most popular app monetization strategies.
Choosing a mobile monetization model
But before finding out what strategy to implement, there are a great many of things to consider. First and foremost, you need to know your app from A to Z. To find a proper monetization strategy, you have to know what value it can provide your customers with.
The second point to consider is your target audience and its purchasing power. To develop a successful mobile app, you should study your market to find out the needs of the target users as well as their preferences. A thorough analysis is a key to your success as an app entrepreneur. Listen to your users to find the right app solution. All right, that’s out of the way. Let’s have a closer look at monetization strategies and what benefits they can bring to app entrepreneurs.
Most-used mobile app monetization models worldwide in 2017 according to Statista
The most widespread monetization models
In-app purchases are proven to be the most popular monetization strategy for apps but not the games. In-app purchase model resembles another widespread strategy – freemium.
To take advantage of in-app purchases, you should turn your mobile application into a sales machine that generates revenue. Of course, the range of in-app purchases isn’t limited to the retail products but a wide choice and well-known brands can boost up the revenue.
The following strategy can do both things – enhance profit margins as well as facilitate the growing monetization.
In-app ads… Everyone heard about them and even came across while using various mobile applications. In-app ads are believed to be the most efficient mobile monetization strategy.
Moreover, such ads are said to replace conventional advertising on TV or the Internet since more and more people are flocking to mobile devices, and hence, apps.
Given these points, mobile ads are a smart way to bring in the revenue. You can try to make it more personalized but don’t forget about the user privacy.
Freemium app model
It was not long ago when the freemium model appeared on the market. Such model allows free downloading but to take advantage of a premium or advanced app, the user has to pay for them.
The basic functions are free to use. As a rule, the basic functions and features are enough for an average user. The app monetization will kick in as soon as the user buys a premium version.
To facilitate users to buy premium, you should provide a flawless user experience with a free app version. In other words, don’t save all the good stuff for premium users.
In order to grow the app monetization, you can add a subscription for your long-time and regular users. Subscriptions will encourage the users to come to your app again and again. There are several types of subscriptions. The users may be billed monthly or annually.
The following billing policy may encourage the users to go for the services you provide. But you shouldn’t forget about the quality of the service since the subscription may be canceled anytime.
A subscription model is a clear winner if your app provides articles, videos or other content. As a rule, subscriptions give access to premium content. Such monetization model is extremely popular for magazines or any news apps.
This monetization model is the newest strategy. Nevertheless, it has stolen the scene. Let’s have a closer look at how it works. When an app entrepreneur goes for sponsorship, he or she becomes a partner of an advertising campaign. And the advertising company shares its profit with an app owner.
Things to consider before going for a sponsorship monetization strategy:
- New and fresh ideas for in-app ads
- Smart reward generation for in-app activities
- Well-thought reward division policy
In a nutshell
As you may see, earning money via an app is not an easy thing at all. There are lots of pitfalls to be avoided while implementing a monetization strategy. One of the key elements is not to force people to buy services but try to deliver the experience they’d like to pay for. A success formula is obvious – know well your target users and work out the strategies that suit the users but not you as an app entrepreneur.
Hi there! Thanks for reading my article on Understanding eCommerce. I’m Helen Morrice. I’m a technical writer at IDAP. Here I write engaging articles about mobile app development. Want to read my entries? Welcome to my blog.