Every B2B or B2C eCommerce entity requires mobile applications to keep up with emerging competition and the latest innovations. Most eCommerce mobile apps are developed to make money, but if it is not, then it’s an absolute waste of money. Creating mobile apps for your business with a money-making motive is called Mobile App monetization.
To optimize and generate good income from your mobile app, you need to know everything about app monetization. Generating revenue from your app is no easy task as you require different monetization strategies based on the type of business you own and the app you have created. These strategies have both pros and cons, and selecting the right app monetization strategy matters a lot.
This article is an absolute guide to mobile app monetization and uncovering the latest monetization trends and techniques. It offers a fair understanding of what mobile app monetization is, the different types, how it works and the various strategies associated with app monetization. Read along to learn more about app revenue generation and various tools to monetize your app.
What is Mobile App Monetization, and How Does it Work?
The process of generating revenue from your app is called mobile app monetization. It is a crucial aspect of any business as it adds monetary value to your business and becomes an integral part of your revenue model. This is one of the top reasons why your business should have a mobile app.
Most mobile apps are free at the point of install; however, developers deploy various strategies to generate cash after download. This process involves multiple aspects, and it is essential to implement the right one to reap maximum benefits. There are two main ways to generate money from your mobile app, and they are named as direct monetization method and indirect monetization method.
In the first type, revenue is made via a straightforward way when someone downloads your app or uses your app to buy something. This is the most common monetization method, and the majority of apps fall into this category. The indirect monetization method is not so straightforward because cash is not bound to your app or its usage. There are multiple aspects to monetization, and without the proper monetization strategy, your app will not earn you income. Read along to uncover the popular app monetization strategies and different models.
Mobile App Monetization: Top 6 Models and Strategies for Making Money
There are multiple ways to monetize your app. Broadly speaking, mobile app monetization can be divided into six types. These strategies or models can be simple or complicated and are better suited depending on the category your app belongs to. This also means these strategies or models can be effective and generate the most revenue based on the type of model you choose to implement.
The six app monetization models are:
- Premium models (Paid downloads): Premium models, more commonly known as paid models, are one of the earliest forms of app monetization. It is also a straightforward way of earning income from your app, as you need to pay before using the app. This means each download generates income and can provide significant revenue. Premium models possess a large user base because of their exceptional functionalities.
- Subscription Models: As the name suggests, this model encourages users to subscribe to the app to generate recurring revenue. Simply put, users have to subscribe on a monthly or yearly basis and get charged annually or quarterly, depending on your choice, to continue using the app.
- Freemium model: This is a combination of free and premium models, thus giving it the unique name, freemium. In this app model, users are offered a free version with standard features, and if you want to experience advanced features, you have to pay for the subscription. A good example is the Spotify app which offers unlimited songs but limited features and is full of ads.
- In-app Advertisements: This model offers space in your app for advertisements. In-app ads generate a huge income and are available in different methods such as cost per install, cost per click, cost per view, etc. Payment differs on the type of advertisement models; the more users you have, the more income you earn.
- In-app Purchases: This model is utilized most by the gaming industry. In the gaming world, players can spend money to buy physical or virtual props related to the game, and they make purchases such as weapons, vehicles, lifelines, etc. Here the apps may be mostly free to download, but to experience upgrades, you must make in-app purchases.
- Partnerships: Sponsorships and partnerships are also deemed to be great app monetization strategies. Engaging in partnerships with well-known brands will cost you extra but will also build your brand. You may connect with your target audience better this way and also gain potential new customers.
Latest Trends on Mobile App Monetization
Now that we have learned about different app monetization models and strategies, how do you reckon your app will make you money? Like discussed earlier, one must choose the monetization strategy that best works for your business. Many mobile app development companies provide secure, private and popular app monetization models and guide you through the process. However, you must protect your app’s user experience at all cost; if the UX is not intact, it can further spoil the strategy. This is true vice versa too. These strategies may be applied simultaneously along with one another. Using multiple strategies simultaneously is called hybrid app monetization.
Let’s take a look at some of the latest trends on mobile app monetization:
- Advertising within an app: This is by far the most popular app monetization method: in-app ads. However, when implemented poorly, this strategy may backfire. Therefore, choose your ads wisely and closely observe whether the user experience remains intact.
- Free trials: This trend of offering free trials for a limited period may help your users explore your app and motivate them to keep the subscription at the end of the trial period.
- App data monetization: One of the crucial perks of data monetization is that it doesn’t compromise the user experience. It is secure and private and can be adopted alongside other monetization models.
- White labelling: This method of monetization showcases a product or service adopted by another company. If your business has strong code and a good user experience, then white labelling is for you. It reduces the cost of making new codes and resells your code to other brands.
- Sponsorships: Sponsorship models are a great way to monetize your project effortlessly. Find a sponsor or partner with a similar clientele like yourself and benefit from them and then receive revenue from those sponsors. You may choose to reward customers or offer discounts for services or purchases made within your app.
Every business case is different, so choose wisely when adopting app monetization strategies. Some may work and some won’t, as you cannot guarantee success on any model. Hybrid monetization strategies are also very popular amongst developers, especially in a volatile market. However, you may choose one or multiple strategies depending on the foundation of your business, provided with the fact that revenue generation and user experience are rightfully balanced. This way, users are happy, developers are content, and so are you!