It’s impossible to live long without generating revenue for any business today. Whether you sell a service or a product, it’s fundamental to build the right monetization process for any mobile app. We know that you’ve already created a strong product and now it’s time to develop its app monetization strategy for longer success. Let's see how!
What is app monetization?
App monetization is the mechanism of generating revenue by implementing different methods in your mobile app. You probably heard the terms of in-app purchasing, in-app ads, or paid downloads. In this article, we’ll look at each method and hope you’ll find the best working method for your app.
The methods vary from each other since the target audience will require different demands. That’s why it’s important to understand what are the payment habits of your target audience in your category. After this, you can build the best strategies to make your app profitable.
Why is app monetization important?
Generating revenue is challenging especially in the mobile apps competition. When you provide a service, the other app may be providing a similar service without charging anything. That’s why it’s important to adjust the monetization process with the right strategies. As competition gets challenging it will be harder for you to stand out between all the apps. There are already too many free apps in the mobile app market and most people are more likely to pay for apps. That’s why it’s getting critical to sustaining the right monetization cycle.
To do’s before monetizing your app
Preparing your app for monetization is needed. Before you decide which method you want to use, get ready with plans & strategies that will help you.
- Work on a strong value proposition: What are unique values that you can provide to your users and make them understand it’s worth paying for your product? Brainstorm which are the best features you can present that differ your mobile app from others.
- Understand your users: Listen and analyze your current users' behaviors to implement the monetization process in the right place and time. You wouldn’t want to provide a weak experience.
- Analyze competitors and their methods: Check out what are the methods, values, pricing that your customers present in their apps. It will give you an idea to know where to place your mobile app in the market.
- Be aware of your marketplace differences: Apple App Store, Google Play Store, and Huawei App gallery are all different marketplaces with various users tendencies. Know the differences and be aware that you may have to apply separate strategies for each of them.
How does mobile app monetization work?
There are several methods and strategies that app publishers apply for mobile app monetization and some of them work really well. Here is a list of app monetization strategies you can use.
Freemium: In-app purchasing
With a freemium model, you can make users download your app free but limit some of the features or content with a paywall. Users will see that your app has in-app purchases from the product page. The advantage of this model is people can try your app and decide to pay or not after that. On the other hand, it may be hard to convert users since people tend to use free apps more than paid ones.
The optimal way of making users freely use your app is to place various ads on your app. You can implement ads as Banners, Interstitial, or Rewarded.
- Banner ads can be placed at the top or bottom of the mobile apps and are very small. It may not bring tremendous results but since they are very small to ignore, it will not make people get uncomfortable with them.
- Interstitial ads are the image or video format of ads. They may be used when the app is loading or at the end of a game.
- Rewarded ads are the format of rewarding users after watching an ad until the end of it. It’s a win-win strategy for all parties.
It’s possible to make users pay while downloading your app. You can use a one-time fee for app download and generate revenue. However, it’s very hard to make people pay for an app without using it first. Sure this may be your method but starting with a free version will make many things better.
Upgrade for no ads
In this strategy, users may use the free version with ads or pay and use the full version with no ads. Currently, the leaders for this model are Spotify and YouTube music.
Things to keep in mind:
Implementation is more important than providing cheap pricing, with the right revenue model, user experience can also get better
- Choosing the right app monetization method is important for longer success, don’t apply a method that will cost you your users
- Use app intelligence to track other apps’ ratings and reviews so you can understand users’ pain points and most-liked strategies
- Always spy on competitors to develop your strategy and not stay behind them, there may be new implementations that are working and you can easily make your benchmark!