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App monetization methods to increase your revenue in 2023
Updated on August 11, 2023
As app developers or publishers, you must know the importance of having the right iOS or Android app monetization strategy, depending on the kind of app you own. Identifying ways to optimize and diversify revenue is a helpful way to compete with the market. Thus, it is essential for you to stay updated about the most popular app monetization methods that exist and what to expect in the future.
Let’s dive deeper into the concept.
Table of Contents
What is app monetization and why we need it
App monetization is the process of converting your app users into revenue. Given the amount of time users spend on mobile apps daily, mobile app monetization is significant for generating revenue besides funding.
As developers, you create apps with goals such as user growth, increasing engagement rate, and creating brand awareness, but generating revenue is often the end objective. You may even struggle to find effective ways to earn money through your apps, which is where app monetization methods come into play. It is crucial to take the time to create an app monetization strategy specifically for your app to ensure that:
- It generates growing revenue.
- Users and the user experience are kept relatively intact.
Many forget about the gravity of the second point. It is just as important to examine how mobile monetization affects the app experience as it maximizes revenue.
Read on to learn more about such mobile app monetization strategies.
App monetization methods for free apps
Free apps have added leverage to garner more users from the very start. But it should be kept in mind that having a free app would involve strategizing the correct app monetization methods accordingly. Quality cannot be compromised just because the app is free.
Here are some in-app monetization methods you may want to consider instead of the less popular paid app approach.
In-app purchases are integral for app developers with free apps. They can be of two kinds – consumables and non-consumables.
Consumables (one-time service): A consumable in-app purchase is a temporary or limited service made available every time a user downloads the app. It is a one-time service that is used up once purchased and has to be repurchased to be used again. In-game currencies in gaming apps are an example.
Non-consumables (one-time payment): These in-app purchases need to be purchased only once by users. Unlike one-time services, the non-consumables do not expire or diminish with use, for example, new race tracks for a gaming app or paying to unlock a new level.
The important thing to remember is that the app should be functional without needing additional purchases. The add-on services must only be meant to enhance the user experience.
In-app subscriptions or freemium model
The perk of this app monetization method is its free trial service feature. The idea is to offer users a slimmed-down version of your app for free to get them hooked to the app. The user will have to pay a certain amount to access the rest of their services. The crucial part of inculcating this business model is striking the right balance between what’s included in the free and premium versions. The goal is to tune users to upgrade the subscription, not to turn them off altogether.
There is a vast difference between in-app purchases and in-app subscriptions. In-app purchases are typically items, events, or content that perform as a bonus or reward. They do not constrain the user from experiencing the app. On the other hand, in-app subscriptions is an app monetization method that offers users a very basic, slimmed-down version of the app.
At this point, there is the question of which model would be better for your app. According to Reuters Digital News Report from 2018, depending on where your app is based, you could reasonably have about 20% of the population willing to pay to access the content behind the in-app subscription. If your app is free, you can implement a subscription service to monetize it. This enables you to offer a different experience to paying users.
Another advantage of the subscription-based model is that it is easy to predict as there is a constant revenue stream. In some cases, it can bring in higher revenue than other strategies. Subscription models are increasingly becoming popular by the day because app developers have realized that by subscribing, an engaged user is worth more than a single paid user. A few popular platforms that have adopted the subscription model are Netflix and Spotify.
Collaborating with potential app developers or businesses is an excellent way to secure additional funding. Also known as influencer marketing, sponsorships and partnerships are effective app monetization methods.
While businesses want to leverage the scope of mobile marketing, it is a win-win for both parties as the app could be the perfect marketing opportunity for them, while secure funding goes a long way for you. For example, if you have a cooking-learning app for vegetarians, you can work with advertising partners that share those values, giving users valuable recommendations while generating brand awareness.
One way to approach investors is by offering them free marketing within your product. If you have a large user base or have built an audience in a particular niche, brands may be interested in using your mobile app to connect with their target audiences.
In-app advertising employs adverts as an app monetization method and is the ideal source of revenue for app developers. What you should take care of is showing users ads that may interest them, which, consequently, will make money. You can earn good money by displaying valuable and relevant ads, just as much as irrelevant ad content will result in a poor ROI and wasted ad space.
Below are some of the most popular ad formats you can use in this app monetization method.
Banner ads: These continue to be highly effective in helping publishers make money. Despite being on the lower end of eCPMs, banner ads have emerged as the second-highest revenue-generating format across all regions. They are ubiquitous and have incredibly high impression rates, making them a reliable monetizing format.
Interstitial ads: These are well-designed ads, which, although take up the entire page, come with an easy-to-find ‘X’ (close) button that allows people to dismiss it shortly after they appear. Interstitials play between pages, stories, articles, levels, etc. They can be of display or video format and usually ask users to watch the screen for a few seconds. Interstitials ads are potential solutions to counter the interference of banner ads with user activity. Since they occur between separate user flows, the name is interstitial.
Native ads: Native ads can be integrated seamlessly into an app. The ads match the overall feel of the app by taking a post template on the timeline. The trick is to make the native ad look and feel ‘native’ while providing a clear indication to the user that the content is an advert. As you look closer, you’ll see the “Promoted by” and “Shop now” CTA, which indicates that it is a sponsored native ad.
Affiliate ads: These ads allow people to generate commission from other apps, products, and services by advertising them through your app. This method proves helpful in converting because users trust the source (your app).
Rewarded video ads: Rewarded ads are popular, especially in gaming apps, where users are offered a reward to engage with the content. However, for this app monetization method to work, the content must be kept relevant to your user base.
You can rely on GreedyGame to implement and use a mobile monetization platform for in-app advertising. GreedyGame is a Google AdX publisher partner, making the tool accessible to you easily. You can stay on top of performance with a dashboard that offers detailed reporting about key metrics like impressions, fill rate, etc., Besides, it can be your one-stop solution for premium demand, personalized app monetization methods, policy compliance, and more
As the industry advances daily, app developers are not just relying on a single app monetization method. There has been an increase in developers adopting hybrid strategies (implementing multiple strategies into a single app). Especially in a rapidly evolving market, it’s imperative to stay one step ahead!