As a businessman, you are always looking for ways to improve your business. One of the best ways to attract more customers is to build a mobile app. It makes it easy for customers to reach you and buy your products. Mobile apps give a much more personalized experience to your customers. It is easy to access. They can use it anywhere at any time.
You will improve your sales and your revenues when more customers buy your products. But even before that happens, you have a chance to make money from your app. Sometimes you build apps which may not directly bring you money. People hardly download paid apps anymore. There are too many free apps. But you must make money from your app. It is where app monetization helps.
1. Why Monetize Apps?
— UX Links (@uxlinks) August 15, 2015
There are about 8 million apps available today. It is the total number of apps from Google Play and the App Store. You get most of these free. People today don’t pay for any of the apps. But the fact is that Google Play makes 98% of its revenue from free apps. So, how do free apps earn money?
The way to earn money from an app is to monetize it. You may develop an app with an aim to make money out of it. Most independent app developers have this as their aim. But there are millions of free apps available. If you were to sell your app, people might not buy it. People don’t like paying for an app when so many are available free of cost.
But if you are going to build an app and launch, you must make money from it. One way is to get the user to pay for it. It is possible if you can provide enough value that people pay you for downloading. Another way is to get others to pay you, while the user uses it for free. There are many ways, and we will see the different ways to make money from the app.
Let us see the main points before we look at the ways to monetize your app. Whatever be the method of monetization you should ensure that it is also built-in when you create the app. You should not add it as an afterthought.
There are 8 million apps available, and many are launching every month
- Users can download most of them free of cost.
- You have to get your app to earn you money
- You have to provide enough value for people to pay you
- You should decide who will pay you
- You should find a way for the app to make money for you.
“In my opinion, the future of mobile is the future of everything”
– Matt Galligan
2. Check Before You Monetize
It is fine that you want to make money from your apps. But before you decide on a method to monetize you should know a few things. If you can focus on Finding App Developers, then it can prove beneficial for you.
- What app are you launching? Some monetization models work fine with some apps. In-app purchases work well with game apps.
- Study your competitors. They are seeing how they operate and what monetization model they use will give you a good idea.
- Know your audience. Is your app solving any problems? Is there a set of people who get benefitted by your app? They may be willing to pay for your app.
- You should build a user base. Look at how to do this. Without a good user base, your ways to monetize will not work.
3. Ways To Monetize Your App
You must make money from your app. We know there are millions of free apps available. We need to see how you can earn money from your app.
In this method, you get people to advertise in your app. You can collect money from the advertisers. It is one of the most successful ways of monetization of mobile apps. 65% of monetization is through ads in the app.
There are different types of ads that you can show in your app.
Interstitial Ads – Full-screen ads. The user should close or read through. Gets sure response
Banner Ads – The announcement will pan into view from top to bottom. People consider them to be spam
Native Ads – They don’t interfere with the user’s experience. They will look and feel like part of the content.
Rich Media – They have exciting videos, CTA, QR Codes, and social media elements.
Panel Or List Ads – These will advertise many companies’ ads.
The main advantage is that users get your app free. You will get more users to download your app. You can collect the data from your users and sell these to advertisers. It will prompt them to advertise in your app.
The first rule for in-app ads to works is that you should have a good user base. Only then will someone pay to advertise in your app. Users usually find ads a nuisance. They see it as an interference in their usage. It could prompt some of them to uninstall the app. You should ensure enough value to your users.
- Users get the app free
- You get a lot of user data which you can use to lure advertisers
- You achieve a user base within a short time.
- It is the most popular model of monetization.
- Without a good user base, you won’t get advertisements
- Users consider advertisement a disturbance.
- You can be tempted to give more importance to earning through ads.
In this model of monetization, you can sell virtual or physical products through your app. The sellers will offer you commission for the sale. You earn money through commission. Your users get the app free. They get the use of the app. They also get to know of some products they may be requiring. The seller of the product will be happy to get one more outlet for their products.
- This method also makes your app free to the users
- You earn a good commission on all the sale
- Your users get products that they need from your app
- The seller of the product is happy.
- You have to pay commission to Play Store and Google Play
- The transaction should be transparent to protect your reputation
- The pay and check-out should not disturb your app.
- There should not be any legal issues while selling virtual products or books.
It is another method of making money through your app. There are many apps which collect a lot of data when people use them. These data will be useful for a lot of companies. There are banks and insurance companies who are always looking for data from people.
Your app can collect location from many people. It could be useful for companies to know the place for their target customers. You can sell the data for a reasonable amount. There is always a demand for personal data of people.
- Your users get the app free of cost
- You can gain a lot of users as your app is free
- Many companies are willing to pay for data.
- People are wary about their sharing their details
- You should ensure that apps should not lose reputation is because of someone using the data.
The name stands for free + premium. You give some basic features free of cost. You don’t provide access to advanced features. They are available only on payment. Many SaaS (Software as a Service) apps use this method.
The main advantage of this method is that you get a good user base in the beginning. You can then use other monetization methods along with selling your premium versions. The broad support can get you in-app advertisements. It is a useful, fool-proof method of monetization.
There are three different types of freemiums on offer.
Capacity Model – In this model, you limit the individual storage capacity or the number of users. Beyond this level, customers will have to pay. The features remain the same. The user gets full features even in the free version. Eg. Evernote, Dropbox
Feature Model – In this, the basic version doesn’t have all the features. Users will have to pay to unlock all the features. Eg. Skype, Buffer
Time-Based Model – In this, the app is available for a certain period. After this period, you have to pay to use the app. This like offering a free trial. Eg. Audible, Shopify.
- You get a good user base as you offer the limited version free
- You can use this user base for implementing other models of monetization
- The user knows what he gets if he buys the premium version
- You should offer enough free features to make the user remain interested
- Your premium version should have enough attractive features to push them to buy it
- You should give enough time for the user to try and enjoy the basic version.
E-Commerce / M-Commerce
— eSparkBiz (@eSparkBiz) January 8, 2019
This model is ideal for apps which are not e-commerce apps. There are apps which focus on specific groups of people. They can sell items which relate to the group. They can sell promotional sports items to apps targeting lovers of particular sports.
Even for apps which selling some services based on a freemium model, this can work. They can sell products related to the service they provide. Evernote used to sell physical products in their app.
- The target groups may be looking for such products
- You make extra revenue while satisfying a need for your user
- Even if your app doesn’t upgrade to freemium this revenue will help you
- The product you sell should be of good quality
- You should be able to make the sales and delivery smooth for the user.
Subscription / Paywalls
It is very much like freemiums. Instead of features, it is content that is locked here. It could be music, movies or magazines. Users get free content to a limit. They need to pay for more content.
In this model again, you get a good user base initially. Another big advantage is that the subscriptions come at regular intervals. You can plan your income for some time. If your content is right, you can get a lot of subscriptions.
The difficulty is in keeping the users interested enough till they subscribe. You need to be sure how much content to give free. The free content should be good enough to provide the user with enough time to take a decision.
- It is an excellent option for content-based apps.
- You can be sure to get a good user base.
- You can get a regular income if there are the right amount of subscriptions. You can plan your spending.
- You need to keep the users interested until they make the decision.
- It is difficult to decide how much content to give free
- The paid content should be outstanding in making them take the subscription.
- This content should not be available free elsewhere.
It is a relatively new model of monetization. Here, companies partner with you. The companies ask users to complete specific tasks. When they finish the in-app functions, the company awards them points or coins. When the user redeems these points, you get a percentage of that.
In this way the brand gets its advertisement, you get your money, and the user receives rewards and points. It is a useful method of monetization. You should be careful with the partnership.
- Here you, the company that advertises and the user get benefits.
- It could help in the conversion of your users to premium members too.
- You keep increasing your user base.
- You should be careful about how you implement the model
- It is not tested and tried the method.
It is the way people originally downloaded their apps. It is very straightforward. Users pay for your app and download. You get your money immediately. Many Mobile Application Company is earning from this model. But, this is also one of the most challenging models to monetize.
With so many free apps available it is difficult to convince someone to pay to download. They have not seen the app and didn’t know how it is. With free apps available nobody wants to risk the money. You should publicize the app very much and get high reviews from people who matter. Then only you can monetize the app.
- You get your money in the beginning
- If your app offers such high-quality stuff, this is the easiest way to make money.
- Hardly anyone wants to pay for trying something they haven’t seen
- You need to spend a lot of time and money promoting the apps and getting good reviews.
- So many free apps are available. So people don’t want to pay unless it is such a good product.
We have seen many models of monetization of your apps. Each of these models works for different kinds of apps. You should contact any app development company to know the monetization methods. Click Here To Know More about the app development in detail. You must do a detailed study of the apps in the market and what way they are using.
You should decide your monetization plans before your app is ready. This way you can alter your app according to that. You will know what you should provide in the app. There are some things you must do when you monetize your app.
- Your app should be able to meet the need of a user.
- Be sure about what type of users you are targeting with your app
- Ensure that your user’s paying capacity is enough to meet your revenue needs.
- Always have more than one model of monetization for your app.
- You must know what your competitor is doing
- Study the latest trends in the market
- People don’t like to pay for apps. Your app should be worth what they pay.
- Nobody likes ads in any apps. Make sure your apps are so good that the user doesn’t mind the ads.
- Your monetization should never take priority over the apps main function.
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