10 Ways to Monetize your Mobile App
Did you know that 90 percent of mobile use is spent in apps? That is a lot of time, considering the average person uses their mobile device 87 hours a month, according to Flurry Analytics.
An excellent rule of thumb when considering how to monetize your mobile app is the 90/10 rule. This means that less than 10 percent of apps net 90 percent of their profit off installs.
“Of paid applications, about 90 percent are downloaded less than 500 times per day — and earn less than $1,250 a day,” Connie Guglielmo of Forbes explained. How do you profit from your app if you are not in that lucky 10 percent? Monetization!
Monetizing your app is actually a lot simpler than one would think. There are a number of services you can employ and implement into your app to increase revenue. Ads, in-app purchases, subscriptions, and freemiums are a few.
The following is how the other 90 percent of app publishers and developers turn a profit with their apps via monetization.
Advertise On Your App
Employing advertising services to help monetize your mobile app is the most common and in some ways, the most profitable. This is a great strategy for those of you who offer free mobile apps. Think of it as AdSense for your app.
The key is to build a robust user base that will then engage with the ads served up while users are in-app. If you have built a good-sized user base, you can even segment your ads to net even more profits.
There are a few different in-app ads that are available for most apps:
- Interstitial Ads
- Banner Ads
- Video Ads
- Native Ads
- Text Ads
Not sure which ad types are best? Interstitials have an eCPM of $1.86, while video ads net an eCPM of $3.08 on average, according to Myk Pono VP of Marketing at Aptrinsic. Banner ads are slightly less appealing with an average eCPM of $0.25.
The best performing monetization ad service for apps is AdMob with an eCPM of nearly $4.50, according to AdTapsy.
A report by IHS Markit stated that by 2020, in-app ads will net more than $50 billion of revenue a year. This is a clear indicator the value ads have for monetizing your app.
Charge for App Installs
This strategy is not the most optimal on the surface, but has benefits for a few apps in niches like health and wellness, fitness, and productivity. One of your most valuable assets for driving paid app installs is your website.
Let’s face it, app stores don’t give you a whole lot of room to create enough value for customers to pay for an install. Your website, however, can be as robust as you want it to be. Creating a good value proposition for people to download your app on site will drive them to the app store to make a purchase.
“So, your website is actually the biggest hidden source to drive mobile app installs, where the user experience is superior and revenue generating opportunities are higher,” according to Todd Patton of Branch.
That doesn’t mean that you can ignore app search optimization (ASO) best practices. You should still showcase your best selling points in app stores using keyword rich titles, eye-catching app icons, videos, actionable screenshots, and in-depth authoritative descriptions.
If you have decided to make your app free, but still want to add some form of “pay to use” structure, freemium is the perfect monetization strategy. Think “try before you buy,” type marketing.
Did you know that the average freemium app gamer spends $24.66 per month? According to a study by swrve.com, 64 percent of freemium players make a purchase every month.
Users will have access to some features of your app, but will need to upgrade to premium to get full access. This way to monetize your mobile app is becoming quite popular. LinkedIn and Dropbox are a few examples of freemium apps.
Monetize In-App Purchases
While users are moving through your app, you should be offering in-app purchases to monetize your mobile app. This is usually optimal for free apps, drawing more users to make in-app purchases.
There are two types of in-app purchases . . .
- Consumable. These are those purchases that are one-time use only. For instance, game credit. Users who play app games often buy lots of game credit to keep growing in the game.
- Non-Consumable. These in-app purchases are forever lasting. This could be a service add on in your app, or for games, it could be a level unlock purchase.
According to a 2015 study by Slice Intelligence, Game of War netted over $500 per player.
To make the most of in-app purchases, bundling packages are often preferred among users.
Set Up a Subscription Model
Like freemium, a subscription model sets a limit to what users can access within the app. Users can use all or some of the app features for a limited time, and then be asked to subscribe to keep using the app.
Subscription models are optimal for apps that serve up value over a long period, such as . . .
- Content driven apps in the space of news, videos, music, financial updates, etc.
- Top-notch functionality that serves a purpose of human improvement, like brain training games.
- Unlimited access to all the features within the app, as used in most dating apps.
Apps that offer value to their users in one of the above areas will find monetization success using a subscription model. Netflix, Vogue, and Tinder are few well-known apps that use a subscription model to monetize their mobile app.
To take monetization to the next level with subscriptions, you can offer a variety of subscription options. These could be different levels or periods of time. This allows you to segment your marketing to increase subscriptions.
Dating apps are in many ways the best at offering different levels of subscriptions. For instance, dating app Tinder has Tinder Plus and Gold. The difference between the two is a simple swipe feature called “Likes You.” A great example of how to keep users subscribing just to access a new feature.
The downside to this strategy is that you really need to keep the content rolling in. If users feel that the content is lacking, engagement will drop and people will not subscribe, or continue their subscriptions.
Employ SMS Marketing
By asking for your users’ mobile numbers upon install you can make the customer lifetime cycle longer. Asking for a mobile number is also not as intrusive as it once was. WhatsApp is a good example.
According to a survey by SHIFT Communications, 82 percent of people open every SMS text message they receive. This makes getting your message in front of a large number of people possible.
SMS marketing is a great way to promote new products and services that you may have integrated into your app. It could just be the little nudge a dormant user of your app may need to reinstall, or begin using your mobile app again.
Monetize Your Mobile App with Sponsorships
Sponsorships are still new when it comes to monetizing a mobile app. You will need a robust user base to take advantage of the sponsorship strategy.
Like social media, you can leverage your app to build sponsorship relationships with brands. These brands will see the user engagement you have and may be interested in advertising on your app.
RunKeeper is a good example of how sponsorship can be profitable with more than 45 million users. They get exclusive rewards via sponsors when they reach certain app milestones, like running 10 kilometers in a set amount of time, for example.
If your app becomes a huge success, you may find yourself at the negotiation table with one of your sponsors. This was the case with RunKeeper, acquired by Asics, the running shoes and apparel company in 2016.
Build Up Your Email List
This method is tried and true for websites, but it also can be quite lucrative for mobile apps as well. Like SMS monetization, you will compile emails upon install. This is generally great for free apps.
Once you have a nice list of emails from your users, send them informative newsletters to highlight upcoming updates, new levels, highest scoring users, etc. You can even promote exclusive offers in your newsletters to drive more in-app purchases too.
Another clever way to monetize your app is to offer in-app currency. This monetization strategy works well for gaming and casino apps.
For instance, if you set one single game package of 100 coins at say $50 you could be losing money. If you have a few different packages, you are giving users options, which they will appreciate, and they may end up spending more over the customer lifetime cycle.
Monetizing your app via crowdfunding is a fairly new model. Many believe that crowdfunding is simply a source of money to develop and launch an app, but many crowdfunded apps make far more than their monetary goals.
ParcelGenie is an excellent example of how crowdfunding can impact your app revenue. The app made $2.6 million on the crowdfunding platform Angels Den in a year.
Crowdfunding is also an excellent way to build your user base before your app is even available. This gives you a leg up after your app hits the market, because your users will be built in, allowing you to develop a monetization strategy ahead of time.
Make App Monetization Easy
AdMob, Google Analytics, Add Colony, and Flurry are only a few services that can help you monetize, track, and expand your app’s customer lifetime cycle.
One of the main obstacles to improving revenue for app developers is the difficulty of installing the SDK of various services, and maintaining those SDK’s up to date. The process is incredibly time consuming, and can pose a huge limitations to the growth of your app.
With Enhance, implementing and updating third party services to your app is quick and easy.
Using our system, you can integrate limitless services into your app in just moments. Even if your app doesn’t possess the needed directories, which is a common issue, we create them for you.
Once you’re up and running, your app will be Enhance compatible, allowing you to add more services in minutes, whenever you want.
With Enhance, you can test, analyze, test some more, and then optimize for the most revenue. What mobile services are you ready to implement?