Mobile apps are everywhere and for almost everything. Over time, the sophistication in developing applications for mobiles has evolved. The same is true for mobile app monetization, i.e., the ways in which your mobile app generates revenue for your business.
At present, there are several ways to monetize your mobile app, including in-app purchases, advertisements, sponsorships and partnerships, and subscriptions.
Each has its own set of advantages and disadvantages that we will cover in this app monetization guide. We will also detail three mobile application monetization best practices, but before that let’s know about some mobile app monetization stats.
Let’s take a look at some of the most important statistics related to mobile application monetization:
A business has several app monetization strategies available that it can use. Each has its own set of perks and issues. Before implementing a monetization strategy, it is important to thoroughly understand them.
Consequently, in this section, we will explain the various ways to monetize an app starting with affiliate marketing so that you can decide the best one(s) for your mobile application.
This is a simple mobile app monetization strategy in which you recommend products and services offered by third parties to your audience. Affiliate marketing is the leading way in which blogging websites generate revenue.
You can sign up as an affiliate partner for a business and then promote its products and services on your mobile app. Affiliate marketing is subtle, thus making it easy to integrate with other app monetization strategies.
The affiliate programs that you need to apply for depend on the type of your application. Sign up for a suitable affiliate program and promote products and services that your users find relevant.
Advantages – Subtle, pairs well with other app monetization strategies, passively increases your app’s revenue generation ability.
Disadvantages – Ad fatigue, quality control.
Serving different forms of advertisements on their platform is a common way for businesses to make money via their mobile apps.
Most mobile applications following the free app monetization model leverages ads to generate revenue. Serving in-app ads is how free apps make money, most of them.
Today, there are a variety of ad networks available to choose from. For example, Google AdSense, InMobi, and AdMob. Among the various forms of mobile advertisement models, this trio is the most popular:
Choosing the right ad network is important for businesses, especially when it is the only monetization strategy available to them.
Advantages – Most common way of monetization, excellent for free apps.
Disadvantages – Ad fatigue, requires extensive research.
Almost all mainstream ecommerce and mobile gaming apps leverage the in-app purchase monetization strategy.
Compared to paid apps, in-app purchase is a more reliable monetization strategy as the user has already used the app and has made up their mind on whether to continue using the app or not.
Before implementing this app monetization strategy though, know that driving in-app purchases necessitates a great deal of effort in both mobile application development and marketing.
Developers must make the in-app purchase system easy to understand and use. Marketers, on the other hand, need to use funnels for bringing application users near to buy a product or service.
Advantages – Reliable monetization model, requires less convincing, among the most popular ways to monetize a mobile app.
Disadvantages – Requires more effort in terms of development and marketing.
Most apps are free to use, whether it is App Store (92%) or Play Store (96%). Nonetheless, the market for paid apps is growing as people are now becoming accustomed to paying money for using a mobile app.
This is because users now see mobile apps as long-term assets that help them with various personal and professional endeavors.
Implementing the paid app model is one of the easiest mobile app monetization models. You need to just decide the price that the user has to pay for downloading the app. However, the real challenge is to actually make users pay for the app.
iOS users are more likely to adopt the paid app model than Android. Therefore, it’s advised to think about alternative monetization ways if you’re to implement the paid app strategy for your Android app.
Advantages – Easy to implement, ensures direct revenue, decreases the hassle of monetizing through in-app purchases.
Disadvantages – Not lucrative for Android users, requires a robust customer support system.
Subscriptions serve as a consistent source of revenue generation for mobile app businesses. Comparatively, paid apps only generate a single revenue opportunity.
The emergence of OTT platforms is a perfect example of the rising popularity of the app subscription model. Domain and web hosting services also follow the subscription model, for instance.
The mantra behind a successful subscription model is continuous change and improvement. You need to have a skilled team that continuously brings new stuff to your app’s offerings list.
Advantages – Consistent source of revenue, excellent to grow your ARR.
Disadvantages – Requires continuous updates, adds subscriber churn.
Congratulations! You have successfully optimized your app for generating revenue. It doesn’t end there, however. In the long run, you need to optimize your earnings.
Each app monetization strategy has its own way of approaching revenue generation. Consequently, each one has its merits and limitations. So, how do you ensure optimal revenue generation from your mobile app?
Well, there are certain mobile app monetization best practices that you can follow to ensure that you maximize your earnings all the while tackling the issues that the ever-evolving user requirements throw at you.
Following are three of the most tried-and-tested mobile app monetization best practices that you can follow to optimize monetizing your mobile app:
1.Focus On User Retention
The more users are coming back to your app, the more chances are there for you to increase your earnings. This simply means you should optimize your user retention rate.
Although there are a great number of strategies that businesses can put in place to ensure a steady user retention rate, a range of factors determine their effectiveness. These are:
Many returning users create several opportunities to monetize your app. Irrespective of whether your app features in-app ads or in-app purchases or both, a good number of returning users guarantees more revenue generation for your business.
2.Drill Down Through Mobile App Analytics
Analytics plays an important role in generating revenue from mobile apps. A business has to focus on mobile app analytics. There are several tools available for doing so.
The market competition is high and there is no option for a business to sway away from mobile app analytics. Not every mobile app business, obviously, has the necessary resources to hire a data analyst. So how to do it? The answer is the best mobile analytics tools.
With the right mobile app analytics tools by your side, you can make sense of everything happening with your mobile app. Using data analytics is a sure-shot way to optimize earnings.
3.Use More Than One Mobile App Monetization Techniques
You might have used mobile apps that use a slew of monetization techniques. Sticking only to one mobile application monetization model is a common pitfall that many new businesses fall into. This puts them at the risk of running out of revenue generation opportunities.
Having more than one app monetization strategy reduces your chances of failure as you have several options to bank upon if one or many fail for some reason.
4.Consult an Experienced Mobile App Development Company
Asking an expert about something that you aren’t sure about is a great option. Similarly, you can hire an experienced mobile app development company to know the best ways to monetize your app.
An expert mobile application development company like Apptunix has experience not only in building mobile apps but also in doing mobile app marketing. Therefore, it can provide sound and actionable advice on how to optimize your app’s monetization strategies.
Monetizing mobile apps is crucial for any business looking to profit from one or more mobile applications. You need to analyze your audience to know their preferences and then serve them accordingly.
You can run A/B testing campaigns to know which monetization models and strategies work best for your mobile app. Hiring a data analyst to help you with analytics is a great way to understand the needs and preferences of your users.
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Akhil has been writing content since 2014. Although he has written content across various niches, his forte is technology writing. Throughout his tenure he has worked in various capacities. He is presently working as the Marketing Manager for Apptunix.
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