10 Proven Strategies to Monetize Mobile Apps
So, you have built a mobile application that you believe will take your business and company to the next level. However, there are thousands of such apps struggling to gain some limelight in the crowded digital world. Making your mobile app stand out from this crowd is never a walk in the park. Thus, you need something to help your mobile app make money while you sleep.
You can employ a couple of mobile monetization strategies to increase the revenue stream. But there is no single strategy that works for everybody since mobile apps are built for different functionalities and industries. Therefore, if you decide to monetize your application, you need to do extensive research first.
In this article, we’ll try to make it hassle-free for you to monetize your mobile app. Here we’ll mention some of the best and proven strategies you can employ to monetize your mobile application.
What is Mobile App Monetization?
Before taking your app to the market, you should know what it means to monetize your application.
App monetization is a process of transforming your mobile application into a money-generating tool. In simple terms, it is the process of collecting profits from an app by converting all its users into a substantial source of revenue.
For example, a music streaming app can charge its users for every download. Alternatively, you can collaborate with other businesses to advertise their brands in your mobile app and generate revenue from these partnerships.
The digital world offers immense opportunities for app builders to make money. According to the global app publisher survey of 2019, it is established that global consumer spending on mobile apps hit an all-time high of $120 billion. Your mobile app can also be part of this outstanding growth and make you money.
10 Best Strategies for Mobile App Monetization
If you are thinking of transforming your newly launched mobile app into a money-making machine, you have to make your hands dirty a bit. But to make it easier for you, here are the best models and strategies you can employ to monetize your mobile application.
1. Freemium Model
One of the common app monetization strategies is the freemium model. The goal of this monetization model is to offer the users an option to use your app free of charge. However, they will still have to pay for premium features.
The freemium model is one of the best strategies you can use to monetize your mobile application because it does not force your users to subscribe to the application upfront. And, if the user wants to enjoy other advanced features of the application, they might consider subscribing to the premium.
Also, you can offer a free version of the application that comes with some limited features. And, to enjoy more advanced features in your app, users will have to subscribe to another premium version.
That being said, a premium version of the app should provide add-free and full access to the app features. The users pay to have a premium version of the mobile app to get rid of the pop-up adverts.
2. In-app Advertising
At least 47% of successful mobile applications are using in-app advertising as a main source of revenue. Nowadays, most app publishers are shifting from the premium model to mobile advertisement to make revenue. Mobile ads also make up 75% of all the media adverts spent in the last decade. It means that an advertisement plays a significant role in app monetization.
Advertising companies understand the significant impact of app ads in cyberspace and the ad revenue they can drive. Therefore, they have come up with different options and networks that app owners can choose based on their applications’ unique features. Pay-per-view is one of the most preferred options by most app owners.
Although this option may sound like an effective way for free app owners to get app revenue, most users prefer not to see adverts while using their favorite apps. Therefore, when choosing in-app advertisements as a strategy to monetize your app, you have to ensure you do it in moderation.
Too many ad formats, such as video ads, banner ads, and pop-ups, will make your app boring to the users who can decide to uninstall the app from their phones. You should also drive a substantial number of users to sign up for your app before using this strategy to earn profits.
3. Data Collection
When users subscribe to a mobile application and install it on their phones, they usually enter some information on the app like name, age, address, or sometimes their social media credentials on the subscription forms. Every detail on the subscription form is useful data that most businesses can use in analysing consumer behavior.
This kind of data helps your business understand how active users behave when they go online and use your app. It is also useful in helping you establish users’ intent to install the app.
You can easily get insights into what your target audience needs in a mobile app by simply gathering user data and quantifying it. Personalize your mobile app for a target audience, improve your app features, and drive more users to sign up.
To collect data, keep in mind that you would need to take care of online form designs to make it beautiful and easy to use.
4. In-app Purchases
An in-app purchase is another popular app monetization method. A recent survey has established that close to 47% of non-game app owners incorporate in-app purchases as a strategy for generating revenue.
For instance, Clash of Clans and Candy Crush are using this strategy to make money from users. In Clash of Clans, users can transform the app’s features by buying new accessories like weapons and clothing for their favorite characters. E-commerce businesses can benefit from in-app purchases too.
This strategy balances out the free and paid resources the application offers. While the users are guaranteed free access to the application, they have to pay to improve the app and get more advanced features.
When people use your app for free, they are more likely to pay to get more features. Most game apps are very addictive, and users can often pay to advance to the next level.
5. Paid Subscription
A paid subscription is another popular app monetization model. Your users can pay monthly or annually. Marketers can also use this strategy to generate leads.
The subscription model offers app users more options. Most apps use this strategy to combine different features and pricing mechanisms to convince users to subscribe to premium versions. When users subscribe to the app for a longer plan, it is much easier for the app owners to allocate the budget for product development.
Stats also confirm the effectiveness of paid subscriptions as an app monetization method. According to the 2019 report by App Annie, 97% of consumer spending in the top non-gaming apps in the Apple Store was driven by subscriptions.
The only thing you should remember when choosing paid subscriptions as an app monetization strategy is to retain your existing users and focus on converting them into loyal subscribers. However, most users are likely to shy away from your app if you force them into paying for what they are used to getting for free. So, before shifting from the freemium model and adopting the paid subscription model:
Research widely and establish if your users are willing to subscribe.
Inform your existing users what they will get if they subscribe to the app’s paid version. Focus on adding new content to the app and making it more user-friendly.
The only advantage of this model is that you can attract many users to the app before converting them to paid subscribers. On the flip side, it is not easy to determine what content to offer to your users for free and what they will have to pay for. Some users are also likely to unsubscribe from paid apps if you don’t update more features.
6. Partnerships and Sponsorships
You can also monetize your mobile application by collaborating with other advertising companies. Advertisers can reward your users when they complete certain actions. For example, an ad can appear on your mobile app asking a user to buy some product and get a discount.
The concept of a partnership works on the principle that your app has a huge user base, and advertisers can take advantage of it to reach more target consumers. When advertisers sponsor your app, they pay you for advertising their brand.
Additionally, you can also partner with other mobile applications that are almost similar in use to yours. Co-promotional partnerships are among the most popular channels to market an app. This is a mutually beneficial way of helping you and your partner drive more users to your mobile apps.
The best example of sponsorship and collaboration is between Headspace and Nike. Through this partnership, athletes can learn how to use mindfulness and meditation to improve their recovery and success and enjoy workouts.
7. Content Marketing
Content is the basis of digital marketing, and most advertisers know this as a fact. When you provide useful, educative, informative, and entertaining content, users will always come back for more.
You can hire a few freelancers to write app content for you, much like you would hire a company to outsource IT tasks. This way you can focus on other business objectives and save up some of the funds for other projects since outsourcing is cheaper than hiring an in-house content production team.
Creating and publishing high-quality content improves user acquisition and retention. If customers find value in your content, they will always be willing to pay for it. Focus on updating your mobile app with quality and unique content if you want to transform it into a revenue-generating tool.
8. Affiliate Marketing
It is also possible to monetize your mobile app through affiliate marketing. This is where you earn a commission by advertising a business and persuading your users to make some direct purchase through your app. You can collaborate with a company offering an affiliate program to earn a small percentage of the money they make through your mobile application. Some companies that offer affiliate programs are Google, Amazon, Spocket, eBay, and Microsoft. You can benefit from recurring cash inflow when you partner with these companies through affiliate programs.
9. SMS and Email Marketing
The number of active global email users was 3.9 billion in 2019, and it will rise to 4.48 billion by 2024. Also, 68% of millennials say they prefer SMS and emails as the best channel for communication. Businesses are taking advantage of this and now prefer email marketing as a simple and cost-effective way to retain existing customers.
SMS has a 98% open rate, which makes it an effective way of reaching more customers. Therefore, SMS and email marketing can be a huge source of revenue for app owners when used the right way.
10. Marketing Automation
Another proven way to monetize your mobile app is to encourage users to spend some money on your app. For example, you can ask users to book flights and make hotel reservations through your app. This way, you make the best of multi-channel messaging. The simplest way to achieve this is by combining in-app messages with notifications and emails to develop an integrated marketing campaign that targets other users.
There is more every app owner can do to convert their mobile apps into money-making tools. When you decide to monetize your app, you cannot rely on a single strategy; you have to walk an extra mile. Pick a couple of techniques that work for your mobile app design and target audience. If you want to make a fortune from your mobile app, you should understand that content is king in the digital world. Allocate time and resources to creating unique and quality content for your users. Keep updating your app and design it for user experience. There is a great future for mobile app monetization, which lies in mixing a unique business model with a data-centric approach. When you are beginning your app monetization, you can choose at least two of the strategies highlighted here.