Monetize your mobile apps with these top strategies Share via

The success of an app largely depends on its ability to monetize, and the app developers should have an ideal app monetization strategy in place from the beginning stages. For example, whether you want to keep your app free and depend on the advertisements or sponsors to generate revenue or go for the subscription model to scale your app needs to be decided in the planning stages. It also depends on the application’s type and the audience and segment it is catering to. What monetization method works for one mobile application does not necessarily do well for the other. We will look at different, and most popular strategies app developers can look at to monetize their mobile applications.

In-app advertisements

The most common way for app developers to monetize their applications is through in-app advertisements. In this model, app developers are paid by brands to run advertisements on their mobile applications. Advertisements have been the most fruitful method for mobile apps to earn the most revenue across categories. Ad revenues are of three types, namely, Cost per Thousand Impressions (CPM), Cost per Click (CPC), and Cost per Action (CPA), and as an app developer, you need to strategize and decide how you want to run ads so that it does not interfere negatively with the user experience. Wrong ad placements, slow loading ads, ads without context, or personalization can hamper the experience and may lead them to drop out of the app. But well-strategized app advertisements will significantly increase revenues and see positive customer response.

In-app purchases

In-app purchases have proven to be a highly quantifiable revenue metric that app developers can use to monetize their mobile applications effectively. This method works well when the marketers keep their app free to download, but the users pay to use the additional features on the app that increase their app experience and engagement. For example, mobile game apps are the biggest beneficiary of the in-app purchases method. They allow the user to play the game for free, and as they get hooked to it, they are offered various packages to improve their gaming experience. It can be either in the form of getting more lives, access to upgraded tools, unlocking new levels, etc. AppAnnie had earlier forecasted that in-app purchases were expected to generate around $71 billion for brands by the end of 2020, double the amount it generated in 2018.

Subscription model

Even if your app is free to download, companies can monetize their mobile apps by offering a subscription service to the users. In this model, users pay a recurring fee for using the app. The price could be to use the entire app or unlock specific features. Brands have the flexibility to provide different user experiences to paying and non-paying customers. Media companies and publishing houses have long been using this method to monetize their mobile apps. Many entertainment platforms are also using the subscription model where some content is free, and others need to be subscribed for a fee. The said model helps the brands and organizations with recurring revenue, which is a positive. But since the services here are more expensive than other modes, customer acquisition becomes a challenge.

Paid download model

One of the oldest app monetization strategies is the pay-to-download method, where the developers set a price, and the user pays to download the app from the app stores. High-end games from top publishers or apps of leading fitness trackers often try this model to generate revenue. It was more prevalent in earlier times, but today, enticing users to pay upfront with so many free apps becomes challenging. Also, when the user is paying to download the app, the content has to be top-notch and should provide a significant value to the consumer.

The mobile app monetization models we talked about in the blog are not an either/or scenario, and many apps will use multiple models to create an efficient revenue stream. For example, brands can have a paid download model and still have provisions for in-app purchases and ads. It is up to the developers to decide what strategies can work well for their product without disturbing the user experience. In fact, some of the monetization methods actually improve the customer experience, which helps to get paying users. Also, other methods like monetizing the app data and using sponsorships and partnerships are great ways to generate revenue.