App Monetization Strategies: How to Make a Profit In 2021?

App monetization is the process of making money with your mobile application. The process involves multiple strategies and various channels that help companies monetize their apps. Being a developer, one should be aware of the strategies and able to choose the best to stay active in the app economy.

Still, irrespective of when your app was launched and whatever be the mobile OS, you can still monetize your apps in the market and earn millions of dollars effortlessly.

Read below to make informed decisions on choosing the best mobile app monetization technique to get more loyal users and generate more revenue.

Need for mobile app monetization

Whether you have developed a paid or a free app, you need to choose a monetization strategy to withstand the competition, cover the money and time spent, and attain your business goals.

It is true that it is way more difficult to reach many users with paid mobile apps as compared to free ones. The good news is that even the latter can earn good revenue by leveraging the latest monetization models. Based on the statistics, 98% of global app revenue comes from free apps.

How to make money with your app

Initially, a company should understand each app monetization channel. Developers should come up with a killing monetization strategy to keep the application afloat.

In this blog, we will provide a complete overview of mobile app monetization strategies. The following are the collection of monetization opportunities with the most potential that assists anyone with a mobile app.

1. Freemium Model/ Subscriptions

The freemium model is a popular way to monetize apps, particularly mobile games. In this model, you distribute your mobile app for free and generate revenue from those users who are willing to enhance their experience from the app-exclusive features with subscriptions (for example, Amazon).

The most essential characteristic of a freemium mobile app is that it is engaging and rewarding for all users, not just paying users. So, any app monetization features must serve to enhance the experience rather than locking out free users.

For e.g., The writing app, ‘YourQuote’ now offers a freemium version. But the app has become so popular that recently they came up with a premium version of the app. The users can pay and book their unique hashtags and write on moving pictures (cinemographs).

2. In-App Purchases

Another one of the most widely used mobile app monetization strategies. If you have kept your application free for download and you are seeking strategies to earn revenues, you could try implementing in-app purchases.

In this, the application is generally free but offers additional features or virtual things to be purchased. Candy Crush is a good example of this. It provides an opportunity to its users to buy more gold bars when they run out of it since that is the likeliest time they will want to pay, get more, and continue playing.

3. Paymium Model

Paid apps require users to pay once to download them and use all features without any additional cost. The major issue with its model is that you earn initially, but you may end up losing your loyal users in the long run. The next important thing is people show interest to download free apps compared to paid apps. Hence, an app must be unique and worth paying for just downloading and trying it.

4. Product Extensions

A product extension falls into the indirect monetization category. This strategy is a great way to generate revenue for your product, service, or business, but the money will not be tied directly to actions within the app itself.

Take a product like QuickBooks as an example. It is online accounting software used by 7+ million customers worldwide. The platform controls more than 50% of the accounting software market share, which is why it makes such a great example.

QuickBooks is a paid software. But anyone who buys the software gets to use the iOS and Android mobile app for free.

5. Advertisements

Advertising is the easiest way for apps to make money. You collect data and display the third-party ads within your applications. This way, you get revenue from the views, clicks, and conversions. Further, there is a wide choice of options available for your business with detailed targeting opportunities that cover your potential clients. You may use the following ad formats:

• Banners
• Rewarded Ads
• Interstitial Ads
• Native Advertising

What is more, there are also different revenue models; the same goes for these types of ads:

• CPC (cost-per-click)
• CPI (cost-per-install)
• CPA (cost-per-action)
• CPM (cost-per-mile)
• CPV (cost-per-view)

The way you are paid and how much you are paid depends on a wide range of different factors. For example, simply displaying a banner ad with a click-through revenue model usually will not pay as much as a cost-per-thousand (CPC or CPI) model. At the same time, users find the ads to be intrusive and annoying hence making it a risky option for a startup, so you need to take into consideration the placement of ads as well the content quality before blindly adding them.

6. Sponsorship & Partnerships

Monetizing apps through sponsorship is another way out. Look for a potential partner with a similar customer base and offer to cross-promote each other’s apps.

For e.g., a business partnering with or sponsoring an event can pay you to have their content included in your app and it works very well.

You can use ‘sponsor content’ to monetize apps, wherein a sponsored post is shown as an advertisement by a particular company. This draws in a large amount of popularity to their app.

For e.g., Consider the case of Myntra displaying an article for their ‘End of season sale’ on ‘Womansera’ to widen user activity on their app. This is how apps make money through sponsorship & partnership strategy.

7. Audience monetization

Indeed, almost every company today possesses an app for its operations and business functioning. generally, users visit these apps, register, and log in looking for products and services that they intend to buy. Thus, companies get a lot of data from these users by collecting their email ids, phone numbers, geographical locations, and a lot more.

In short, audience monetization pertains to the process of identifying and sharing your audience-data to generate revenues. Most importantly, aligning with user consent and privacy to make this a long-term strategy.

With audience monetization, companies can identify the useful data that is profitable to them and sell those datasets further to earn revenues.

Android app monetization or iOS app monetization

Based on the statistics, Google play store accounts for the largest share in global app downloads compared to the app store. In the case of Android, communication and gaming apps constitute the top categories but regarding iOS photography, entertainment, and shopping apps hold the top positions.

Next, Android has a large user base and iOS has a smaller but potential user base. Hence, one should select the option based on the size of their target audience, frequency of customer engagement, and possibilities with both the platform. Ultimately, launching your mobile app on both platforms is perhaps the ideal solution

How to optimize app earnings

Whether you are choosing Android app monetization or iOS app monetization, keep these following points in mind:

• Study your audience

Initially understand your user and their demands to create an app with a perfect app monetization strategy. For your app to reach its audience effectively and attains its goal effortlessly.

• Study your competitors

Competitors are another major factor that impacts your revenue in both a positive and negative way. Developers should study the competitor strategy and the monetization methods they are using in their app. That might help you perform better and avoid their mistakes.

• User Experience

Put user experience first while developing your mobile app, add more user-friendly features, and test, test, test. It is the foundation for any successful mobile application nowadays.

• User Retention

The companies can improve their user retention with several factors such as user experience, navigational factors, app performance, user engagement, and swiftness. A greater number of users bring more revenue irrespective of the implemented monetization strategy.

• App Analytics

Without proper analysis, a mobile app cannot survive this competitive market. There are several mobile app analytics tools and applications available to optimize your earnings with in-depth insights on revenue, users, geography, and even more.

• App Marketing

App marketing plays an important role in making your audience to the subscription stage. Some of the app marketing techniques include advertisement, reviews, suggestions, etc.

• Multiple App Monetization Channels

Don’t stick with just a single channel of monetization. Use more than one model to boost revenue and understand faster what actually works and is worth the money you spend.

To sum up

Making app monetization is one of the crucial steps in driving revenue to the developer or the organization that develops mobile apps. Further, choosing the right business model will balance your goals with your target market’s expectations.

It is true that there is no one-size-fits-all approach when it comes to a monetization strategy for apps. The first thing that you must investigate is how the app can make you money. And then it is simply a matter of finding which one of these stated models works best based on your personal preference.