Mobile app development is not-so-easy. There is so much that goes into it.
However, the question is –
While thousands of apps are being launched every day, how can you expect your app to make high conversions?
Converting a website into an app is the baby step. However, this step is followed by a number of modules, and one of them includes app monetization.
App monetization involves planning and strategising on how to make money with an app. The app monetization techniques are not only confined to the new app. In fact, these monetization techniques work the same if an app is already out in the app stores.
While there are many ways through which you can generate money with an app, but you need to figure out the best of them that rings with your app.
Let’s dive into the structure of app monetization strategies that will help you inflate the return on investment (ROI) of your app:
What is Mobile App Monetization?
It is just a way to make money through an app. Simply put, if you are investing in something, there should be a return for everything that goes into it. And the same goes for mobile apps.
Collecting user’s data and sell it to third parties, like advertisers, is the most common way of monetizing via mobile apps.
However, the majority of the apps are free in the app stores that surprisingly comprise the Google Play revenue. And there is a reason behind it.
According to a study, 51% of people often check apps on their phone one to ten times a day. Moreover, around 25% of people open apps eleven to twenty times a day.
A user approximately spends more than two hours on accessing mobile apps. And it is increasing day-by-day.
The dominance of mobile apps is related to the ease of use and access. Therefore, the easy accessibility of apps pushes people to spend more time on apps.
If you are up with building an app and planning to release it sooner or later, get it made with AppMySite WooCommerce mobile app builder. Moreover, mobile app monetization techniques help you capitalize on every penny that you may invest in your app.
How to monetize mobile apps?
When you are planning to incorporate mobile app monetization techniques in your mobile app, first, you need to know about your target audience. It will help you understand your user’s behavior and the way they may use the app. With users’ insights, you can approach your clear goal of monetizing the app.
Think about your users, their app journey, and then make the most sense to monetize your app accordingly. Well, it also depends on whether the app is free or paid.
A free mobile app can be downloaded and installed without paying any charges. Conversely, a paid mobile app requires the user to pay out some bucks even for downloading it. Use this massive pool of revenue through building a mobile app for your business via a free app maker and considerably add the same to your annual income.
Remember, every mobile app works differently. This is why it is necessary to choose the best-suited strategy that could monetize your mobile app in the best way possible. When it is all about generating revenue for your business, there should be no escaping from opting for the right strategy that could drive you more revenue.
If you are looking further for opting an app monetization strategy, here are the strategies that could bring success, visibility, and increased revenue for your mobile application.
What are the key app monetization models?
Understand the three types of app monetization models before you start implementing them to monetize your app. These models will help you make the most out of the app.
1. Effective Cost Per Mile (eCPM) Model
This is the most preferred app monetization model for the app publisher.
The technique offers some rewards irrespective of the actions taken by the user in a mobile app. It is calculated by using the following formula:
eCPM = Total Earnings/Total Impressions * 100
Here, total earnings are the revenue generated by the app publisher with a specific advertisement. Total impressions are the number of clicks that are registered with that ad for an ad campaign duration.
2. Cost Per Click (CPC) Model
This app monetization model is regulated by a mobile user who is taking action on an ad. Unlike eCPM, this monetization technique attracts a diverse pool of advertisers who aims to deliver a better return on investment (ROI).
However, if this model could not generate a high click-through ratio, it will not be fruitful, and the chances of its failure become high. Even you cannot predict the revenue. It is calculated by using the following formula:
CPC = Total Ad Spend/ Total Measured Clicks
Here, the total ad spend is the sum spent on the ad campaign, and total measured clicks are the number of clicks recorded over a period.
3. Cost Per Action (CPA) Model
An app publisher can generate app revenue only when a user takes a specific action like clicking on the advertisement, downloading the app, utilizing the app, making in-app purchases, and more.
This app model offers handsome returns on such advertisements. Unlikely, it also calls for a variety of frauds that are difficult to detect by the app publisher.
For this reason, you need to choose the best-suited app monetization model for your mobile app to generate high returns. Let us take a look at some of the best strategies –
What are the best Mobile App Monetization strategies?
Here are the best ways to monetize the mobile app that could bring you a handsome return on your app investment.
The best way to monetize a mobile app is the in-app advertising.
In-app advertising trends are simply shaping the mobile industry. However, there are many trends in-app advertising, but this method is more successful. It is because online advertising is huge and carries a massive potential to grow further.
According to the statistics from all across the globe:
- 95% of Google’s revenue comes from advertising
- Internet advertising revenue is expected to increase $200 billion globally
These stats depict that there is enormous potential in online advertising. This advertising promises to bring back the core value of your chosen revenue model.
However, it is essential to formulate a plan on how you will display the ads because no one likes ads. Users do not want a series of ads popping out one after another in their browsing experience. In that sense, you need to seek a way out that does not harm your user’s app viewing experience.
You can include online advertising in a variety of ways, and they are:
- Displaying ads on mobile apps or company websites.
- Be definite with your ad network, including Facebook, Google, LinkedIn and Twitter.
- Go for a marketing strategy that is similar to marketplaces, such as Amazon.
In-app advertising is of many types that can be exercised in an app monetization model.
Here are some of the best:
Video Ads: You will be paid when the user watches an in-app ad video. As per the Google insights, an increase of 22.6% is expected mobile video ad spend, which is around $15.93 billion.
Offer Walls: Users are being rewarded with virtual content or additional in-game features if they are completing an action. You can offer this advertising with an effective cost per mile model.
Banners: App screen full of banners help you consistently display the leading products and services of your business. However, putting up banners doesn’t generate much traffic.
Notification Ads: These ads are popped up in the notification bar to make the app user aware of the ad’s presence.
Playable Ads: This advertising allows users to experience the app before downloading it. Also, this helps you cut down on unnecessary downloads.
Generate leads through affiliate marketing
Affiliate marketing is another app monetization technique that could bring visibility and the revenue back to your business. This kind of marketing majorly depends on how third parties can promote another company’s products and services. These third parties can then earn a piece of the profit for selling others’ products.
Affiliate marketing can earn you the following advantages:
- A referral for praising others’ services or products
- A new sales medium for the company
With Affiliate marketing, both the company and the clients get something in return. Therefore, it is such a marketing that is liked and praised by the users.
When users buy a product or service by following a link posted within an application, you can earn a commission. This way, if you host advertisements on your mobile app, it could bring additional traffic to your brand. Also, this helps you generate leads for your app.
One of the most excellent ways to monetize mobile apps is in-app purchasing. This strategy has proved to be a boon for marketers as well.
It is a simple strategy with the apps that come for ‘free to play,’ but in actuality, it is a ‘pay to win’ model.
Let’s understand this strategy with an example:
Niantic, the developer of the famous Pokémon GO app, exercised in-app purchasing strategy to make the game viral among youngsters. This strategy helped and got over 550 million registered downloads and helped the company to make $470 million worldwide. The game was never about winning, though.
Sooner, the company has outdone its monetization strategy by introducing an egg hatching option. To use this option, users need to buy incubators to hatch the eggs. The company’s strategy worked again and users started buying incubators to hatch as many eggs as they can.
The game still generates $2 million in revenue daily.
In the same line, if you want to get high revenue, make your app available for free. Add more functionality, sooner or later, and ask your users to pay for it.
If you have introduced your mobile app that does a specific task regularly for your customers, you can monetize your app by offering the subscription.
The subscription model works best for mobile apps that deliver content only. If you are running a mobile blogging app built with WordPress mobile app builder, you can offer the content to your users for free of cost. However, to continue receiving the content, users will need to pay a subscription fee.
An excellent example of the subscription-based app monetization model is here:
A mobile application owned by Forbes, the globally-renowned business magazine, opted for a similar strategy to monetize it. The mobile app offers different subscription plans to users. Moreover, the users can choose any of the plans as per their needs.
These subscription plans are strategically developed with several promotional activities. The longer the period a user chooses, the less they will have to pay. Conversely, selecting a shorter subscription plan will cost them more.
The freemium model
Another excellent way of collecting revenue from users is the freemium model. Digital mobile apps generally follow this model.
In this model, you can offer the app for free at first and then ask users to pay for unlocking a more advanced version. If users are impressed by the app’s functionality and features, they are sure to pay a little more for it.
With the advanced versions of the app, that is always more-feature rich, you can quickly generate money through your app.
If you are unable to get success with the ads, you can get sponsors for your mobile app. It is a great option that can be experimented in partnership with advertisers.
With this monetization model, you can offer relevant rewards to your users when they complete any designated action within the application. Earned revenue can then be shared between you and your advertisers.
This sponsorship model helps you take ad-personalization to the next level altogether. Ad-personalization further helps in enriching customer engagement and monetizing the mobile app by offering real value to your users.
You can opt to earn revenue for your mobile app in many ways, some of them are:
- Sponsor banner: This brings strong visibility to the app as they are evident, increase revenue.
- Sponsor tweets: Tweeting is a great medium for you to encourage users to converse on social media.
- Sponsored polls: Introducing pooling within the app holds the capability to bring the traffic right.
Users need to pay once for downloading the application with paid downloads. You can sell your mobile app in the app store, which is one of the different ways of generating revenue.
It is essential to embedding brand-new features and functionalities into your app to monetize it. If your mobile application offers much more valuable to the users that other apps fail to deliver, it will get extended visibility.
While there are many apps available free of cost, it becomes difficult for the users to convince them to download the app and pay for it.
The strategy of offering paid downloads is a challenging one. Therefore, you need to re-think on how to monetize apps with this model, when:
- your app provides value over free apps
- you do a robust app marketing
- you want to link revenue directly to the app downloads
- you are marketing your app under a brand name
Give your users guaranteed exceptional app features to increase app downloads.
Provide your products or services to your users that are specifically designed to suit their subscription approach. In that sense, Software-as-a-Service (SaaS) is proven to be an attractive option for your business.
It will help you lock your users in the long-term payment commitments. This way, your users’ commitments further contribute to a valuable lifetime relationship with your brand.
If SaaS suits your business, it can help in increasing the revenue along with assisting you in securing an income stream.
SaaS has many approaches that help you bring revenue to the business. The most popular ones are:
Pay as you go: You can charge your users as per the specific plan to generate revenue. Companies like Amazon rely on the same that helps them to grow their revenue scale.
Tiered pricing: You can divide your services into different levels based on the usage amount that a particular customer pays. It is one of the most common monetizing strategies used within SaaS.
White labelling is the practice of selling a product or service under the brand name of a company who markets it, instead of the company who have manufactured it. Simply put, a company produces a product and sells it to another one for further marketing. To the users, the product shows under the brand name it is marketed by.
This monetization model generally suits the ecosystem of mobile app development. It is proven to offer certain benefits. For instance, an app is developed for providing the best user experience and then sold to other companies having an excellent marketing model that can take the app to the final user.
Many brands prefer getting a ready-to-use mobile application to market it under their brand name. It means another company does not need to build an app from scratch, saves high development cost.
In the white labelling model, both sides can work on their expertise. The mobile app builders can focus on actual product development while another company can take care of the promotion, distribution, and advertising.
Listing emails are an excellent medium to get more engagement from your users.
You may be wondering how emails can help you generate revenue through an app? But the fact is, it is an exceptionally effective way of app monetization strategy. People generally do not change their email addresses regularly, and it becomes accessible for email marketing campaigns.
In email marketing campaigns, promote your app to make people aware of it. Users today usually communicate through emails, which increases the chances that the email sent will be read.
Attaching an email subscription form to your app is bound to work exceptionally well while users download your app.
App marketing with SMS may sound like an old-school technique. However, you canno overlook this strategy to monetize your app.
Well-proven strategies, like SMS marketing, at times, perform far better than the new ones. SMS marketing sits atop all other advertising techniques as it doesn’t require any special preparations.
Today, everyone has a smartphone. Therefore, SMSs can be exchanged at any moment. You only need to have the database of smartphone users contacts to market your app via messages.
The final step is to create compelling content that should be appealing enough that users get encouraged to read the text. Try to keep the tone of the message polite and humble.
Last but not least, crowdfunding is one of the best app marketing and monetization strategy. It is a process where a project is funded publicly over the internet. However, the method can become dicey when you can not be sure of the amount the public will fund for your project.
According to startups.com, crowdfunding is expected to reach $300 billion by 2025. They have also claimed that the success rate of a crowdfunding campaign rises to be around 50%. Even about 78% of the crowdfunding campaigns will exceed their goal.
Some of the best-known crowdfunding platforms that can generate funds for your app are Kickstarter, IndieGoGo, GoFundMe, Patreon, RocketHub, Razoo, and crowdfunding channel.
The crowdfunding channel is highly unpredictable. Thereby, the revenue generation cannot be stable over it. Crowdfunding can also be considered as a proven strategy to draw some extra income for the app.
How to monetize apps in the future?
Mobile apps are here to stay. Therefore, with an expected mobile ad spend, which is estimated to hit $70 billion this year, the buzz has become louder.
Every app is different and works differently. Therefore, all the mobile app monetization strategies listed above may not suit every app. For this reason, you need to keep experimenting with your strategy to the time your app revenue does no swell exponentially.
No wonder with time, many of these app monetization strategies will fade away. For instance, ad blockers may not be a good idea in the long run. But if the native apps will be in trend, then it won’t affect app monetization because ad blockers do not work within native apps.
The ever-increasing competition can also hamper the ways of mobile app marketing and monetization. It may also encourage users to shift their focus towards in-app ads.
App monetization strategies explicitly unfold the manner you can connect with your users and how it can be evolved and transformed in a way that suits the audience, rather than following the herd of sheep.
These were the best mobile app monetization methods you could opt for your app’s success in the year 2020. Every practice explained in the post has its advantages that may or may not suit a particular app marketing strategy. Thus, the trick lies in choosing the best monetization strategy depending on the type of app business you have.
Remember: you should employ the best app monetization strategy for your app. Also, you need to understand that there should be separate planning for deploying the monetization strategies for the Android app and iOS app.
Furthermore, it is crucial to figure out the benefits of each of the above discussed strategies to make high profits out of these app monetization methodologies. You can monitor all of these strategies with Google Ad Manager and Google’s Ad Mob, once you go with the process of building an app with AppMySite mobile app builder.