Most tech-savvy individuals have had an idea for a mobile app at some point in the last decade. Some of those people have even gone on to those brilliant ideas into a reality, but to what end? If your app is unable aren’t able to support itself financially, it’s immediately dead in the water. Fortunately, there is plenty of hope for you tech entrepreneurs. According to research completed by Vision Mobile, apps generated more than $120 billion in revenue during 2015 alone! Let’s explore the most popular ways to monetize your mobile app.
Monetizing Apps With Paid Downloads
This concept is pretty straight forward. When customers decide to download your app, they pay for it outright within the Google Play Store, Apple App Store or the less common Windows Phone Store. These apps generally contain their full functionality, so that users don’t have to pay more than the original fee after they begin using the app.
This works well for apps with a guaranteed audience, or those will little to no competition, which is becoming increasingly rare. Keep in mind that 90% of iOS apps were listed for free in 2013, according to Flurry Analytics.
Mobile Monetization with In-app Advertising
Rather than charging a one-time download fee, many apps utilize in-app advertising to generate recurring revenue overtime. This is an excellent option for game apps, content and social apps (think Pinterest and Facebook), review apps (Yelp, Angie’s List) and many others. Here are the types of advertisements commonly used:
- Ad space dedicated to a simple text advertisement, like those seen on Google searches.
- Ad space with room for images and small, animated gifs, usually found at the top or bottom of the screen. (These can cheapen the look of your app, so use them judiciously.)
- Native ads are designed to blend into the apps normal content (in whatever format that may be), in order to look more discrete. (Think of the sponsored hotel listings in the Hotels.com app.)
- Interstitial ads are full-screen ads placed at transition points in an app’s workflow. These are commonly seen between pages where users complete a task and receive the desired results of their action. (Yep, just like those pesky ‘Game of War’ ads.)
Advanced Overlay Ads
- Advanced overlay ads are similar to interstitial ads, but they’re interactive. Typically when a user interacts with these ads, they receive a perk, such as a promo code or extra lives in a mobile video game.
Mobile e-commerce is a booming industry, accounting for the majority of the mobile app industry’s revenue. Whether you’re selling floral dresses, lattes, or weapons for a space-themed war game, in-app purchases may be a good way to monetize your mobile app. For inspiration, look to the app’s released by Amazon, Etsy, Pokémon Go (you can buy Pokéballs, etc.) and countless others.
Freemium Apps as a Monetization Strategy
The freemium model is similar to the in-app purchasing model, but these purchased pertain to the apps functionality rather than products. For instance, many photo editing apps can be downloaded for free, but offer limited access to filters and text overlays. A simple .99 cent charge can grant users access to additional fonts, image overlays, collage layouts and more. This model is great for truly valuable apps that users need to be introduced to before making a financial commitment.
Note: For certain apps, it may make sense to offer a free and paid version in the app store, instead of one free app with the internal option to upgrade. This allows users to make the purchase decision at the time of download, so you don’t miss out on any impulse buyers or inconvenience customers that know exactly how much functionality they need.
If your app will have new content added to it on a regular basis, a subscription may be an ideal way to monetize your mobile app. For instance, Spotify, one of the world’s top music streaming apps, offers a subscription for $9.99 a month that gives users unlimited access to music, two ‘native’ playlists and zero ads. This model also works well for apps with free and paid options.
Create and Monetize Your Mobile App with 7T
In addition to these models, you can work with partners and sponsors, white label your mobile app’s code, build email lists and more. Despite the fact that apps have been around for a while, there is tons of opportunity to be had! If you’re ready to be a part of this multi-billion dollar industry, call 7T to learn more about turning your app idea into a reality and monetize it once it’s complete.
For more information on app marketing and monetization strategies download your FREE copy of our ‘Marketing Your Mobile App’ ebook below.