You might be reading this on your phone. Take a look up from whichever device you’re on. If you look around, surely you would see many people’s eyes glued to their phones.
With mobile penetration set to grow, we can expect this trend to only go higher at a steady rate.
We use our phones everywhere. Work, gym, home, restaurants, airports, you name it. Studies show that an average American looks at his phone every 12 minutes.
10% of Americans check their phones every 4 minutes. What are these people doing on their phones for so long?
Research done by ComScore in November 2019 states that more than 80% of mobile minutes in all markets are spent on apps.
This is the overwhelming domination of app consumption. The same study also showed that the level of app usage was marginally higher in Latin America, Argentina, Brazil and Mexico.
Let’s look at more mind-boggling figures. An app doesn’t succeed without a good download strength.
You could have made the best app on the planet, but what’s the point if nobody’s downloading it? There is strong and steady growth in app downloads every year.
Most of the time you download an app, you can start using it for free. So how are these free apps making money?
Surely the developers would need a revenue model. In this article, we help you choose which monetization strategy to employ for your app, and understand which software tools to integrate.
In-app advertising amounted to 49% of app monetization revenue for non-game apps in 2017, as per research done by Statista.
For gaming apps, in-app advertising amounted to 81% of revenue. Native ads, banner ads and interstitial ads are the top three ad formats used by developers.
Native ads are fitted easily into the main design of the app and the particular page you see it on. Banner ads are seen at the top or bottom of a screen and are less intrusive.
Interstitial ads are the full-screen pop-ups which come at natural transition breaks, before or after a page or content is displayed.
For example, an interstitial ad may pop up before you open a new news story on an app.
2. Referral Marketing
You may have seen informational content about an affiliate company or product in an app. Revenue for this is collected basis clicks and installs, on a cost-per-action or CPA model.
A freemium app is usually, but not always, a game which is offered free of charge to users with limited features and levels.
To gain further access or to get the premium version users to need to pay up.
An in-app purchase like this gives the developer a chance to prove the worth of the app to the user and creates a vantage point for both parties.
4. One-time Paid Apps
This approach requires users to pay just once, while updates and additional features are free of cost.
If you do choose this model, you will have to make sure that your app is compelling enough for users to play and download.
To do this, you must offer the core competency of your app up-front. Be prepared to always be on the lookout for new customers with this model for a continuous stream of revenue.
5. Subscription Model
This sets up a stream of revenue at consistent time intervals. This can be daily, weekly, monthly, annually and so on.
Customers get to choose which plan suits them the best and make a choice. This model is widely used by apps that offer content for consumption such as Netflix and Spotify.
6. Sponsorship Model
Here is how this works. You first build an app that has garnered a substantial number of downloads and user base.
Post this, you contact a company to sponsor you and offer to upgrade the app features and design to match the company’s branding.
Then you either split the profits with the sponsor or work on a monthly sponsorship fee model. The catch here is to find a sponsor in the first place, willing to come on board.
7. E-Mail Marketing
E-mail marketing has always been one of the most powerful methods of reaching out to customers. It is especially helpful when a user base for an app is seen to drop.
First, you collect data user data (e-mails In this case) and send out e-mails to them at regular intervals.
These e-mails may have enticing information about the app, new additions, and features to pique the interest of the users. The rest of the information is to be disclosed to the users upon payment.
8. App Merchandise and E-commerce
This is a profitable, efficient and secure way for apps to sell their merchandise in-app. All the logistics are managed by Amazon, while you get a share of the profits.
Check Amazon’s merch self-service program that allows app publishers to sell their custom-made products from within their app.
9. Selling Data
This may not be considered the most ethical way to make profits. However, developers that make free apps do take this route.
They sell their users’ personal data to research companies for study purposes, or to a third party for their own marketing needs.
The personal data may contain their name, age, location, social media accounts, sexual preferences, and other interests and behavioral data.
10. Creating Strong Code
If you develop strong code for your app, and it proves to be a success (which means a high number of downloads and users) other companies may approach you to revamp your app or may want to buy it off. You can also make money by licensing your code to other developers.
While there are lots of ways to monetize your app, you must check which method is best suited for your particular app.
It also helps to go through some case-studies and to study your target audience and their behavior patterns, before locking your strategy.
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- 10 Amazing Tips & Tricks To Make Money Out Of Your Mobile Apps - April 18, 2020