5 Creative Ways to Monetize Your App
As a developer, if you’re in the beginning stages of launching your idea or are struggling to bring in consistent revenue, you’ve probably thought about monetizing your mobile app. In 2021, iOS and Android app revenue combined for $133 billion, an impressive 19% annual increase. Whether your app is a professional business venture or a passion project, it’s still important to be rewarded for your hard work.
While some developers are hesitant to monetize due to potentially hurting the user experience, there are monetization strategies for apps that enhance the user experience or even go unnoticed. Here we cover some easily implemented and highly effective strategies.
What is mobile app monetization?
Mobile app monetization is the process of converting app users into paying customers. Most apps are free, but all apps need to generate revenue to ensure the project is profitable. With ever-growing competition, you’ll need creative monetization strategies for your apps to stand out.
Why is it important?
Nowadays, most users prefer trying apps that are free to download. Developers are shifting their business model to generate revenue after the download. However, the monetization strategy will only work if users are happy with their experience and find value from your app.
5 Creative Strategies to Monetize Your Mobile App
1. In-app purchases
In-app purchases are upgradable features or a piece of content that can be unlocked once a user makes a purchase using real currency. For example, users can pay for the ability to use a mobile app without seeing ads or to unlock additional features in gameplay. There are a few types of in-app purchases, such as:
Expendables: This form of in-app purchase primarily applies to free-to-play games. The freemium model may establish in-game currency to buy magic potions or gold coins to unlock features, buy items or extend playtime. These games let you accrue the currency by playing the game; however, the time it takes to accrue coins is usually slow. Enter a great app monetization strategy: Players can purchase in-app currency to allow them to obtain the things they want quicker.
Unlockables: In-app purchases that unlock features or content are permanent. Once a user buys them, that user won’t have to purchase them again.
Subscriptions: Subscriptions can provide monetization for any mobile app. For example, photo editing apps will often have subscription in-app purchases to let users obtain additional features.
2. Running in-app ads
One common way to monetize mobile apps is to run in-app ads. This is a viable solution for apps looking to remain free on the App Store. There are three different types of ad revenue: cost per click (CPC), cost per thousand impressions (CPM), and cost per action (CPA).
78% of app users would be willing to receive mobile ads if they’re relevant to their interests. Unfortunately, many times, developers will place untimely and irrelevant ads that only hurt the brand experience. Ads that don’t align with your brand will ruin the user experience and even lead to users uninstalling your app. For a sound monetization strategy, choose ads relevant to your mobile app content and audience.
Banner Ads
Banner ads are rectangular ad blocks that usually occupy the top or bottom position of the app layout and the entire width of the mobile screen. The app in the banner ad continuously changes at a regular interval based on specific targeting or information collected from the advertiser.
Interstitial Ads
How many times have you finished a part of a game or read an article only to see another ad pop up and take up the entire screen? These are examples of interstitial ads and are known to be an effective form of interruption marketing. They typically appear once a particular app session comes to an end. Developers can have them strategically placed and also set a frequency cap so users don’t become irritated and quit the app.
Native Ads
Native ads are the least intrusive because they are adapted to the app’s features and look similar to regular posts in your feed. Since they assimilate within the app layout, the end-user experience is less interrupted, meaning there are higher click-through rates.
Video Ads
Video ads are any type of ads that appear in video format. You’ve likely seen video ads while watching a YouTube video or scrolling on social media platforms. Video ads can be more engaging than picture ads because they tell a complete story.
Rewarded Video Ads
Reward ads are an interesting mobile app monetization strategy most commonly found in gaming or shopping apps. These ads work by awarding users with in-app currency for viewing the entire ad. It’s effective because it gives users the ability to choose whether or not they want to see the ad. OpenX found that 77% of users are willing to watch a 30-second ad if they received a reward.
Playable Ads
Playable ads take a try-before-you-buy approach that lets users gain limited access to interactive gameplay. Users will receive a sneak peek of what it’s like to play the app before receiving a call to action. Tbhis is an excellent way for advertisers to limit the uninstall rates because paid users will gain a strong impression of the overall user experience of the game.
With so many options, we recommend discussing your monetization strategy ideas with a mobile app consultant to determine what will provide the greatest return with the least intrusive user experience.
3. Partnerships and sponsorships
While partnerships and sponsorships aren’t always ideal for mobile app monetization, they can be lucrative in specific niches and are a viable way to earn revenue. Typically an app must have a large and highly engaged user base for companies to consider becoming a sponsor.
When a company agrees to become a sponsor of your app, they will insert their business into your app. Let’s say that you have a fitness app. You may provide video tutorials on how to do certain exercises for users. It could be mutually beneficial for your app to include a chain of local gyms that can be suggested to users. The earning potential for sponsorships is highly variable and will largely depend on the sponsored company and its service offerings. Generally, apps will make a commission for CPMs, clicks, or signups.
You’ll need to look for a partner with a similar customer base who will add value to the experience of your users. Imagine cross-partnerships between other ads. For instance, a meal tracking app might cross-promote with a meal delivery app. In this case, their app will have an ad that promotes your app, while your app will promote theirs. Since the interests align with both user bases, it won’t likely hurt both parties’ user experiences. Finding similar interests and aligning them is the key to successful app partnerships and sponsorships.
4. Data monetization
In the modern era of data, information about users can reveal information that companies can convert into millions of dollars in revenue. That’s why many companies are happy to pay mobile apps for quality non-personal data to either improve their products or services or better market them. In this case, the mobile app monetization strategy involves user data.
Data monetization is the process of collecting and transferring data from users to data collectors. The data is anonymous; typically data collectors only look for non-personal data such as the user’s device type, device version, network type, screen size, and internet access. This means collectors won’t take personal data such as the user’s name, income, health information, and address for monetization.
Many developers like to incorporate data monetization because it offers many advantages. This monetization strategy runs completely in the background so it doesn’t hurt the user experience. Furthermore, it doesn’t consume additional memory or battery from the user’s device. Since data collection applies to every user, it capitalizes on 100% of the app users and can be a revenue-generating strategy for any category of mobile apps.
5. Developing your own code
Developers who create their own code from the ground up can be attractive to other brands. Brands that enjoy the layout, design, and functionality of your app will offer to re-skin your app. You can earn revenue by licensing your code to other developers. It’s a great mobile app monetization strategy that doesn’t hurt the overall user experience.
Additionally, code-sharing could be a way to sell your app once it’s amassed a large userbase. If you no longer enjoy managing the app or can make a lucrative amount from it, selling it can be the best option. Many developers may want to run your app or use the existing framework to build their own app. This saves developers time since they don’t have to create the code from scratch or outsource the software development process.
Use a combination of monetization methods for best results
So what’s the best monetization strategy to use for your app? It depends on the app specifics and your user base. However, we recommend using a combination of a few of these methods to maximize your revenue earning potential.
The keys to choosing the right mobile app monetization are brand and market fit. It must align with your brand and userbase. If it doesn’t fit naturally, it can severely hurt the experience and cause users to hit the uninstall button.
Before you begin monetizing your app, it’s important to receive an audit to ensure that your app has an engaging and seamless user interface.
Suntech is your partner for custom web development, app auditing, and app consulting services to ensure your app is ready to be monetized. When you’re ready to get started, contact us for a quote!