Top Mobile App Monetization Strategies You Will Benefit from in 2020
The mobile app market is currently one of the biggest in the world and it seems to keep growing on a daily basis. Millions of people spend at least half of the day on their phones and tablets. Thus, there are countless opportunities for developers to turn their digital products into a solid income.
On the opposite side, there is a high chance for your application to get lost in the rich volumes of the iOS and Android stores. There are literally thousands of mobile applications that enter the market and target the same audience as your product will (or already does). That’s exactly where it becomes hard to compete with cheaper or free alternatives and monetize your app.
In this article, we will unveil the top mobile app monetization strategies you can benefit from in 2020.
Source: Synergy Way
It doesn’t really matter whether you have only started developing an app or have already spent months designing, creating, and testing it. What really matters is that you would want to know how to make profit with your project.
And today, we’ll talk about the most widely used ways to monetize mobile applications.
Mobile App Monetization Strategy #1: In-App Advertisements & Free Mobile Apps
Source: Instagram
The mobile advertising market is one of the fastest-growing ad markets in the world. Evidently, this business model is one of the most attractive for users as they get a possibility to download the full version of your app for free.
How does this work?
- Through selling data-driven advertising space.
Pros: Mobile ad monetization strategy allows you to earn money while keeping your product totally free: users see small banners or pop-ups with ads; you get money without charging app users.
Cons: Using ads affects user experience, as some ad formats can distract from your app or content. Some users find ads too annoying and decide not to use or even not to download the app with ads.
Who: This way of app monetization fits best for news, gaming, entertainment, and e-commerce applications.
Example: Instagram is engaging users with the highly specific targeted ads.
There are a couple of ad networks you can use to display advertisements in your app. Some of them provide a vivid range of options, meanwhile others offer a really low learning curve. Ads, in the meantime, are available in a variety of formats, each of which will be less or more efficient for your app, depending on the app category.
Source: Synergy Way
Mobile App Monetization Strategy #2: In-App Purchases
Source: VSCO
The in-app purchases monetization model has become increasingly popular since there’s always a chance to try before you buy.
How does this work?
- Through selling virtual or physical goods or services within the app.
Pros: It doesn’t actually matter what you are going to sell through your app. It can be clothing, gadgets, accessories, or something virtual like extra boosters and time to complete the mission or in-game money and various bonuses. Providing users with the opportunity to buy virtual goods will help you get better customer engagement.
Cons: You have to pay a commission to the App Store for selling virtual products.
Who: E-commerce apps and games usually approach this method.
Example: VSCO – a free download photo editing app that succeeded in monetizing its 30 million monthly active users.
Mobile App Monetization Strategy #3: Freemium
Source: Angry Birds
This monetization model is similar to the free apps (in-app purchases) model where, basically, the app is available for free but not all the features can be used.
How does this work?
- Users pay to unlock extended (premium) features.
Pros: The free version commonly creates a loyal user base.
Cons: Takes longer for businesses to become profitable. Requires quite a lot of time to help users decide if they want to opt for the full version of your app.
Who: Nevertheless, it’s typically used for monetizing games, the Freemium model is incredibly flexible and suitable for all app types and industries.
Example: The popular game Angry Birds is a perfect example of a huge revenue the brand managed to get using Freemium monetization strategy.
Mobile App Monetization Strategy #4: Subscriptions
Source: Netflix
Subscription-based monetization model, in turn, is similar to the freemium/free-trial model. Yet, instead of the locked features, it opens up the premium content for the user.
How does this work?
- The user has access to a limited amount of content for free. To view more, users are required to sign up for a paid subscription.
Pros: The free content can attract a large number of users that can be then converted to the paid ones and bring revenue on a recurring basis.
Cons: You need to provide the highest-quality content or valuable service to retain customers. It can be difficult to define how much content to offer for free before requiring a subscription.
Who: The Subscription-based model fits best for the content-focused apps such as news, lifestyle, and entertainment.
Example: Music and video streaming apps like Netflix, Spotify, and Apple music use subscription for app monetization.
#5 Paid Apps as your Mobile App Monetization Strategy
Source: Nintendo
This Paid App monetization method assumes that users have to pay for your product before downloading it.
How does this work?
- Users purchase your app from the App Store to install it on their mobile devices.
Pros: You can assign a fixed price to every single app download (the price of mobile app development varies depending on your app and its functionality). Users are more likely to use something they have paid for, so there are better user engagement and loyalty.
Cons: Users mostly don’t like to pay upfront. Persuading users to download your app assume more marketing efforts.
Who: This approach will most likely work if an app is well-known or there are no competitors available for free.
Example: Nintendo released the game Super Mario Run for $9.99 on mobile devices and successfully generated $60 million in revenues.
…or why to say “goodbye” to the paid apps?
Freemium and subscription-based apps are definitely here to stay. Offering apps for free at the point of purchase gives your potential customers an opportunity to try before they buy. When it comes to paid apps, getting downloads becomes more difficult as the trust level is low; especially if you are a lesser-known developer. In the meantime, you most probably will have to say No to all other monetization methods if you make your app paid.
Choosing the right app monetization model can be a challenging task for developers and entrepreneurs. But having an experienced IT partner or effective strategies and tactics at hand, will help you build out the right process.
