Mobile apps are rising for various reasons. First, it allows businesses to offer highly personalized experiences to their customers. Also, mobile apps help businesses to streamline their processes and operations.
However, just developing a mobile app is not enough. Businesses must ensure the app is user-friendly, feature-rich, and addresses customers’ pain points. You can offer highly advanced features and functionalities to the app to offer immersive user experiences to your customers.
Monetizing your app is another challenge to face during mobile app development. To enable this process, developers and businesses must engage users and their behaviors. They must offer highly personalized experiences to motivate users to purchase and encourage conversions.
Developing a mobile app monetization strategy should start before the actual development starts. Remember, monetization is vital to meeting your business objectives. Depending on the app type and requirements, various monetization models are available for businesses.
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The Global Mobile App Market Overview
The global mobile app market will reach 583.03 billion by the end of 2030 at a CAGR of 12.8%.
The rising numbers of smartphones and internet usage have been the primary growth drivers for this phenomenal market growth, especially in Brazil, China, and India.
In addition, emerging technologies like Augmented Reality, Virtual Reality, Artificial Intelligence, Blockchain, Machine Learning, and the Internet of Things have also contributed much to this growth. Businesses use these technologies to offer highly immersive and satisfying user experiences.
Another contributor to this growth is the rising demand for immersive mobile games. Various studies point out that users willingly pay for game applications if they are highly entertaining and immersive. Mobile games like Pokemon Go, Candy Crush Saga, and Clash of Clans are earning revenues through in-app purchases as these games are highly addictive and offer superior user experience.
Also, during the Covid-19 pandemic, the usage of social media and gaming apps increased drastically. Also, we have witnessed the rise of engaging healthcare, finance, e-commerce, and educational apps during this time. Advanced AI-based features and functionalities in these app verticals have contributed remarkably to the rise of mobile apps.
Also, developers use the best mobile app practices to ensure that the apps offer a sense of privilege and gratitude.
What is mobile app monetization?
A mobile app development monetization strategy is a comprehensive plan to generate revenues and profits. You can choose one or multiple monetization models for your app to diversify your revenue streams. It depends on your target audience, business goals, and app’s vertical.
It is of utmost importance to determine your app monetization strategy before you work on your app’s user acquisition. Before choosing your app’s monetization strategy, you must understand your user’s persona, behaviors, and interests.
A monetization strategy that disturbs your audience’s journeys needs to be corrected. For example, you must have come across various apps with bombarding advertisements. Such strategies might not work in your favor. Users might close or uninstall the app without blinking twice. There are better ways to encourage users to use the app. Determining which strategy works best for your app might be challenging, but they are critical in your mobile app development process.
Why Is Mobile App Monetization Important?
There are various reasons why you should consider to monetize your app. Some of them are discussed here:
Sustainability
You will spend lots of money and resources to develop and maintain your app. A mobile app monetization strategy ensures that your app can cover all these costs and helps you sustain your app in the long run. With a strategy, it is easier to maintain the app because of a lack of resources.
Rewarding Your Efforts
When you have given your sweat and blood to develop an app, a monetization strategy rewards you for your hard work and dedication. For startups, a strategy allows them to break the saturation point and become a profitable venture.
Fueling Innovations and Improvements
In the cut-throat competition era, you must continuously improve your app’s features and functionalities. It requires revenues to fix bugs, add advanced features and functionalities, enhance user experience, and get a competitive edge. Updating your app is crucial; you can reinvest your funds to achieve it.
Supporting Future Projects
You can think of other future projects when you have a successful monetized app. You can reinvest revenues to develop different apps to diversify your portfolio and explore new territories.
Contributing to The App Ecosystem
It is crucial to have a fair monetization model to have a healthy and vibrant app ecosystem. You can contribute your share to the app ecosystem and market by developing and implementing an effective app monetization strategy.
Types of App Monetization Models
Before you choose a suitable monetization model for your app, it is crucial to understand all the models in depth. It will help you find the model that perfectly suits your user preferences, personas, and behavior patterns. Keeping the app user-friendly and easy to navigate is also important. Developers must be aware of mobile app trends checklist to build future-ready mobile apps.
Keep patience. You will get at least one model from multiple options suitable for your app.
Paid Apps
The paid app model is one of the fundamental monetization models where users have to pay a certain amount to use the app. Many consider this model outdated, but it is not the case. It is still a promising approach for specific digital product categories. For example, if you have a photo/video editing app, navigation app, or utility app for particular services, you can choose a paid app model.
In the paid app model, users pay a fee for specific features or functionalities. However, your app must offer some value to users to make this model successful. You can also provide a limited-time trial to encourage users to pay for the full version.
In-App Purchases
The in-app purchase monetization model is one of the easiest ways to earn revenues where users pay for premium features and functionalities. Remember, the app must offer some free features and charge for premium features. This model is suitable for gaming, social media, dating, entertainment, and finance apps.
Some in-app purchase types are
Auto-renewable subscriptions
Here, users pay for the premium version; every month, a specific fee is charged to continue using the services. Here, users allow the app to automatically debit the amount directly from their bank account at the end of the month or year.
Non-Renewing Subscriptions
Here, a subscription is not renewed automatically. Users must renew the subscription once the pay period ends by paying a fixed fee.
Consumable
Here, a customer purchases a consumable feature, and once it ends, he has to renew the purchase.
Non-Consumable
In this in-app purchase model, users buy a non-consumable purchase permanently. This purchase does not expire.
In-App Advertising
In-app advertising is about allowing third-party sellers to display their advertisements in your app. These third-party sellers can display ads, banner ads, rewarded video ads, offers, and other ads.
In 2024 and beyond, we will see contextual advertising on the rise. Contextual advertising is all about adding contextual signals to ads, such as location, weather, user behavior, purchase history, and other parameters.
Many app owners combine in-app purchases and advertising models to maximize profits. They do it by using video ads to access the next game level or by offering rewarded video ads to provide consumable items to users. Also, when you are browsing a dating app, you might come across various small videos to continue.
Today, combining IAP and IAA models effectively generates maximum revenues for mobile apps.
Some in-app ad prices are
Cost Per Mile
A publisher receives a certain amount for displaying the app 1,000 times.
Cost Per Click
When a user clicks on the ad, an advertiser pays a certain amount to the publisher.
Cost Per Action
The publisher receives a certain amount when a click leads to specific pre-defined actions.
Cost Per Install
Here, the advertiser has to pay only when a user installs the app.
Affiliate Marketing
The affiliate marketing model works on a deal between the app owners and affiliated networks or programs. Here, special links are placed in the app for users to click. When a user takes a pre-defined action like downloading the app or paying for a subscription model, the affiliated marketing network pays a certain amount to the app owner.
To participate and implement this model, the app owner must sign up with an affiliate network. The app publisher must understand that the affiliate program must offer relevant products or services their target audiences are interested in.
Once the request is approved, the app publisher can start promoting the products or services within their apps. They put links or ads that redirect the user to the advertiser’s landing page.
Every time a user clicks on the ad and performs a desired action, the app publisher receives a commission fee from the advertisers. Sometimes, for different actions, the commission fees vary.
Many giant companies, like Microsoft, Apple, Google, Envanto Studio, SiteWrap, etc., offer affiliate programs.
Subscription Fee
It is the simplest model to monetize the app and is highly popular among app publishers. This revenue model charges a monthly fee to unlock all the mobile app’s features. You will find this monetization model is used mainly by fitness apps, productivity apps, news or magazine apps, and utility apps.
You should offer limited-time access or a free trial to users to encourage people to subscribe to the app. Also, your app must provide some value for the app to invite more subscriptions. Once a user subscribes, he can access all the features and functionalities of the app.
The app publisher can charge weekly, monthly, quarterly, or annual fees for subscriptions. Also, you can offer multiple subscription plans based on your pricing strategy. In 2024 and beyond, we will see the rise of multi-tiered subscriptions and modular content access to provide convenience to users.
If your app offers ongoing services, app publishers can get a recurring source of income to develop and maintain the app.
However, there are some challenges to this model. For example, you must develop regular features and updates to keep the interest alive. People will expect more than just a few features as they pay for features. You need to come up with new content regularly.
Furthermore, you must explain to your users how the app can be valuable to them. It is tricky and requires you to work on your app’s marketing strategy. Sometimes, transitioning from a one-time fee to a monthly fee might backfire as people might not like it.
Product Licenses
Sometimes, mobile apps purchase licensed content from other companies and offer it to their users. For example, Netflix purchases licensed content in the form of films or web shows from third parties and shows them to their subscribers. Similarly, if you have licensed content or technology, you can monetize the content or software by allowing other apps to sell it.
Sponsorships
Here, a mobile app publisher engages in a sponsorship agreement with a single advertiser to display ads or promote products or services. While choosing the advertiser, developers must remember that the product or services are relevant to their offerings and don’t disturb their users’ experience.
Relevance is very crucial as people might get offended in the absence of it. For example, if you have a fitness app, you can collaborate with a health or diet company to show their products or services on your app.
Also, ad placement and frequency must be planned so as not to affect the experience. Overuse of ads might affect the user experience, and your users might uninstall the app.
Crowdfunding
Crowdfunding cannot be the primary monetization model for mobile apps. However, it can be an excellent option to generate some side income. Various crowdfunding platforms like IndieGoGo, Kickstarter, and GoFundMe can be used to monetize your app.
There are various types of crowdfunding options available for app publishers, like
Peer-to-Peer Landing
Here, one party lends money to another in a traditional bank loan style. The borrowing party must pay back the loan to the lender with interest.
Equity Crowdfunding
Here, a company sells a stake to other parties in return for investment. This model works like a traditional stock exchange transaction.
Reward-based Crowdfunding
Here, multiple companies or individuals donate to a cause or project and expect to get non-financial rewards in the future.
Donation-based Crowdfunding
Here, parties donate to a cause or a product without expecting anything in return.
Profit-Sharing or Revenue-Sharing
Here, businesses share profits or revenues in the future with the crowd to pay back their investments.
Hybrid Models
Mobile app publishers use multiple crowdfunding models to fulfill their monetization needs.
The crowdfunding model might look good on paper, but it might generate results differently than you expected. You will need a robust plan and strategy to promote your app, and it might fail to get results.
Augmented Reality Shopping
In 2024 and beyond, mobile app publishers will rely on innovative monetization options like AR shopping. It is a creative way to offer immersive user experiences and make shopping more enjoyable. Users can virtually try products or services like furniture, spectacles, clothes, and makeup.
Though not a direct monetization model, it enhances the user experience and encourages users to make informed purchase decisions.
Blockchain and Cryptocurrency Integration
Mobile apps integrate technologies like BlockchainBlockchain to ensure safe, secure, and transparent transactions. Also, you will see various cryptocurrencies combined for in-app purchases and transactions in the future. In addition, Blockchain can help mobile apps truly own a digital product or service and buy, sell, or trade within mobile apps.
In-App Events and Experiences
You will see more in-app events and experiences within the app in 2024. You can watch live-streaming events, performances, virtual reality events, and real-time participation in various events and communities.
These time-limited in-app events can help monetize the app while offering exclusive experiences to users.
Conclusion
Monetization is a crucial part of mobile app development. It allows you to offer a consistent user experience with highly advanced features, functionalities, and updates. After carefully evaluating all the aspects, you must choose a monetization strategy that perfectly aligns with your business objectives, scalability goals, and target audience.
In 2024, we will see the rise of innovative monetization strategies. Developers are experimenting with various creative monetization approaches that perfectly cater to users’ expectations, technology advancements, and the evolving digital landscape.