4 Popular Mobile App Monetization Techniques

Let’s face it: Whether it’s part of your marketing strategy, a new product, or a business in and of itself, almost everyone looking to build an app is interested in making a profit.

That being said building a fully functional mobile app is not inexpensive and you might not see any return on your investment if you build an app without a proper monetization strategy.

So without further ado, let’s dive into four of our favorite methods for making your app profitable.

Here are the four methods we’d recommend:

1-) In-app advertising

In-app advertising is a very popular app monetization technique among free apps. The goal here is to accumulate a sizeable user base by allowing free app downloads and gather information on the people interacting with your app. Then, placing relevant ads to your app to make money.

Flappy Bird is a great example of in-app ads making millions showing general-interest ads on a free, simple game.

Now, you need a large user base to be able to see serious revenue from in-app ads but its simplicity makes it one of the most popular app monetization technique especially for beginners.

Mobile ads are still a strong model and trending upwards.

2-) Freemium (Gated Features)

Similar to in-app advertising Freemium monetization technique is also geared towards free apps. The idea here is to offer a free to download app, get people to use your app and experience what your app can do and charge them for premium or proprietary features.

Simply put your user base have access to your app’s basic functionality, but certain features are gated and cost money to be unlocked.

The goal here is to attract users to your app, give them a rich preview and get them to pay for more once they are hooked.

Angry Birds is a great example of this monetization model. They released a free version of their game and kept some of their levels gated. Only when users upgraded to the full version they were able to play the full game.

This was a great move by The Rovio team since their game was highly addictive and most of their users paid for the full app once they got a taste of the game.

The advantage of this model is to allow people to download your app without hesitating at the initial price and get them engaged until they are ready to pay a price to continue using your app.

3-) Paid Apps

Paid apps are the apps users need to pay to be able to download from the app store. Paid apps might cost anywhere between $0.99 to hundreds of dolars and with every app purchase, the owner of the app makes money.

Paid apps are a bit tricky though. With millions of free apps flooding the app markets paid app owners needs to make sure they explain the perceived value of their app with clever marketing and a well-structured app store listing.

It needs to be clear what is it that the users are paying for and how your app is different from the free competition apps. Most profitable paid apps do a great job of selling their app’s unique features

In summary paid app monetization model is like a “pay to play” strategy that is propped up by your mobile marketing team’s ability to convince users to buy your app instead of free substitutes.

4-) In-app purchases

Just like the name says, In-app purchases involves selling physical or virtual goods within your app. A wide variety of goods can be sold within your app from clothes and accessories to virtual goods like extra lives, new weapons, movies, music or in-game currency.

The key here is to make sure the in-app purchases feel like a natural part of your app.

Hipstamatic is a great example of in-app purchases. The app comes with free photo filters and is fully functional as a free app but you can always improve the app experience by purchasing more exotic filters.

There are more monetization strategies out there but these four are the most popular ones today.

As the app ecosystem becomes more sophisticated we advise our clients to implement blended monetization models and constantly measure their results to see whats working and whats not working.

After all, there is no one size fits all model for app monetization. What is working for your competitor might not work for you. So it’s best to adapt and iterate on each app monetization strategy to see what makes sense for your app.


Originally published at www.kogimobile.com on August 31, 2016.

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