Often we hear about people coming up with brilliant ideas for the mobile app and fantasize how would they will carry the industry by storm, but all day-dreaming aside, the true purpose for every app that has been published in the app store is to earn income for their stakeholders who were busy investing their resources on it. Understanding the science behind the app monetization and how an app business can reap the benefits from it requires a great deal of planning prior to its development. The app monetization is not restricted only to newer app ideas but if your app has been published in the store for quite some time, there is always the chance to make your app an additional income source.

Before going into the details of app monetization, there are varied options available to the business to choose from. This guide points to all means and methods used for app monetizing and increase your Return of Investment (ROI) for your applications.

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Understanding Mobile App Monetization

As the name suggests, generating income through your published app is what’s behind the concept of app monetization. Every app has a right to this concept with every right reason to do so. According to a report by U.S mobiles 2017, it states that media consumption around the globe has shifted towards mobile devices by 77% each year. Those mobile devices use smartphone apps to devour their daily content in the form of sports, news, entertainment, internet, to name a few. The report doesn’t end there, but the time spend on mobile devices has also unveiled astonishing facts. About 2.3 hours is spent on average every day using mobile apps, against desktop time spend which is only 15 minutes daily. This statistics has urges many businesses especially the news app to develop their branding based on smartphone screens and generate income through app monetization.

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These staggering details cannot be overlooked due to the immersive potential for generating an income through your app, so if you haven’t uploaded your app to the store, or haven’t established a monetizing procedure into your app, now is the time to do so. So if you are thinking that “people won’t download my app if you start charging them money for it” well guess what? Free apps can also reap the benefits for monetization even more successfully that premium apps.

How to monetize mobile apps

Report by Google Play store has removed all ambiguities about the query like “how free apps can generate income?” According to the statistics, the quantity of free apps is overwhelmingly exceeded the number of paid apps in the market. For paid apps, business usually gets income based on the sale of the app, but it’s just considered a tip of the iceberg. Free apps provide far more options for monetization of their apps. These techniques are further classified into different categories. It’s imperative to realize all of these categorized along with their pros and cons and some real-life case studies based on the method.

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Paid Downloads

It is the fastest way to earn from an app based on other options at our disposal. Using a paid download method, app owner charges the user upon downloading the app for first time. The more people download your app, the more you earn from this method. But be careful about placing the cost on the app, which shouldn’t exceed from the market standard, so it’s important to spend some time to analyze your app market.

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Advantages

– You will be engaged in monetizing from an app as soon as its start getting users downloads

– The user will be more loyal to your business due to personal investment towards your app.

– App design will be clean from ads clutter and other monetizing content.

Disadvantages

– Huge competition from free apps

– Google play store and iOS app store will take a huge chunk of profits.

– No other method to earn from app beside payment on download first time.

– Paid apps have usually high expectations for quality, performance, updated content and user support.

Free apps, a general note

Remember a rule of thumb, free apps will have more downloads than paid apps. According to the report from comScore, the top 10 most downloaded app are all free apps.

Free apps have a lot of potential for monetizing and generating income than a paid app has to offer. It promotes the concept of user time spend on the app and repeated usage like a newspaper. Using cumulative in-app monetization strategies such as advertisements, in-app purchases, subscriptions or paid content has to offer long and fruitful benefits for your business to grow in terms of monetizing and user acceptance rate.

For businesses that are looking to walk into the free app world, the content your app will be offering should not be shy from quality and uniqueness due to the fact it’s free. Paid apps vs. free apps can only be determined by a number of downloads, not compromising the quality of the app design.

Here are some in-app monetization strategies which are being used by countless apps businesses and developers.

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In-app Purchases

In-app purchase can come into any manner, such as additional workout schedule for a fitness app, a onetime cheat code for the mobile game, premium skin or weapon for your game character, in-game credit purchases, and a lot of other forms. The important concept behind the in-app purchase is that your app should function normally with all necessary features without the use of in-app purchase. This method only adds up an optional user experience for the user.

Advantage

– Free apps will attract an increasing number of downloads

– In-app purchase is simply a virtual add-on which doesn’t require additional storage capabilities or constant updates

– In-app purchase increase the app experience for the user, thus improving the loyalty

– This method can be used in combination with other monetization methods.

Disadvantages

– Google and iOS will take a great number of profits similarly like paid apps

– Even when people enjoy using your app, many of them will never use in-app purchase method, thus your overall earning may fluctuate greatly

– You will generally receive a lot of refunds for in-app purchases if pressed accidentally.

In-app subscription

This method is known as freemium content which is somewhat similar than premium in-app purchase. The only difference between the two methods is that an in-app purchase is used to purchase items, content or service, while the in-app subscriptions provide you with a new app experience as a whole.

This method is vital for apps which has some service gated through the purchasing subscription for the very content. Similarly clause for in-app purchase, the app basic feature should work without availing in-app subscription, the only benefit it provides is to increase the app capabilities which was not available for free users.

Many apps provide an in-app subscription to remove ads and clear other unwanted content for their users. They may also have locked content which can only be accessed through in-app subscription feature when provoked.

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Advantages

– Subscription provides you’re a steady flow of income with recurring in value, unlike one-time-payment like paid apps.

– Subscriptions are best suited for blogs and newspaper apps with a subsequent readership

– People will generally feel reluctant to download the app as it provides a try-first-pay-later model.

Disadvantages

– In-app subscription profits are largely taken by Google play store and iOS app store

– The content should be very well formed and amazingly formulated which offers in-app subscription

– Content has to be constantly updated and renewed to have niche profile.

– The balance between the free and premium content should be laid out with optimal evenly weighted, to encourage the user for opting in-app subscription rather than turning them off entirely.

In-app Advertising

Stated by Sweet Pricing forum, in-app advertising is the widely used monetizing method for any kind apps. The biggest reason for its popularity is due to the fact that app which uses in-app advertisement stay true to its manifest, which is to provide all features to the user with no hidden or premium benefits to some. The only trade-off this method gives is the clutter of content with ads which disrupts the flow of app flow, so figuring out the proper place for ad placement with right time to its initiation.

Many users understand that free apps have to earn as well, so advertisement is a harmless method for many users, but make sure don’t overdo it, otherwise, this may misfire back at you.

Advantages

– Your app will be free; so many users will download it

– The ads that you show through your app would benefit users as well and earn you a good income at the same time.

– The in-app advertisement is best suited for entertainment apps, gaming apps, news, and video streaming apps.

– There are three type of advertisement for app monetizing; third-party, incentivized and native.

Disadvantages

– Ads if placed in the wrong place at the wrong time may backfire at you.

– Due to proper ad placement, you may need to develop or reiterate your app design to optimize your UI performance.

– Irrelevant ads based on your app concept will deliver low ROI, and waste the real estate for your app screen.

– In-app advertises are not for those apps which are highly depended on constant content visualization.

Types of Mobile Ads for apps

According to eMarketer, in 2018 alone, the mobile revenue through in-app advertisement is expected to generate $70 billion. The same report suggests that over 75% of the money is being spent in this medium, and there is a very good reason to do so. A survey conducted by AdColony has claimed that many publishers are fixated towards this advertisement spending as the ROI is generally greater in value than other monetization methods.

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Below are some ads methods widely used inside the app for monetization capabilities.

Banner Ads

Explained by Golubev, a technologist provides an insight into the negative rep accumulated by Banner ads in recent years, but they still enjoy a prominent position among many app publishers. Golubev states that despite having low eCPMs and ROI, the banner ads still have a large acceptance rate among the app users, especially across Latin America and European Nations in the iOS platform. The apps that are famous on using banner ads still use to this day with great sales generation and monetization output. Among such apps are some respected one like All4Women and DeeperBlue.

Interstitial Ads

The Interstitial ads are very popular among the rest of advertisement options. This ad is appearing during your app content, video, article or level. The user has to watch or see an animation for few seconds before he can press the ‘X’ button to skip the ad, or if he’s willing to know more about the app, he can simply continue watching the complete ad. These types of ads take up the entire screen and show a work as a break intermediary for the app if allocated ingeniously. Usually, these types of ads have a clear ‘X’ position which can easily be found and pressed to fast forward the ad show ship duration.

Native Ads

Native advertisements are best suited if you are keen about user experience and want to earn along the way. These ads don’t distract users from the app experience and feel a natural allocation for ads within the app. The native ad’s placement is designated when the app is in the development stage. Content placement and ads proposition are well balanced through this method.

According to Pavel from Appdeal, approves his commendations that native ads have a more natural feeling when proper placement is adjusted. This provides a good Click through Rate (CTR) within your app, without any element of annoyance among the user.

Of course, whenever an advertisement is involved in the app, there would always be trade-offs. In term of Native Ads, the app content sometimes looks bad in terms of design. Which can be fixed easily using proper adjustments and user feedback? Having customization power over your application user experience and design language, the native advertisement can easily blend in among the content of the app, though some minor concentration on the design stage.

There are some native ads providers such as Facebook and AdMob which restrict publishers to avoid deceiving users through the ingenious placement of ads corresponding with your content, which waved its way for false Click-through-Rates for ads. This phenomenon has provided some strict rules which must be implemented when using native ads feature as monetizing planning.

Video Ads

App these days has prevailing feature for showcasing video inside their content placement. If your app shows videos into its premises, Video Ads is an amazing opportunity as an app publisher to avail from. Not using this method is highly discouraged.

There are many ways an ad can be integrated inside a video. Usually, it can display at the starting of a video, which is usually small in duration (for about 10-20 seconds), for large video duration, ads can be displayed in the midsections of the entire video stretch.

For these in-between video ads, many users are already engaged with your long video storytelling that they are willing to sit through the entire duration if mid-section ads. There are videos which also come as an entire ad, with no intermediate video insertion needed.

Rewarded Video Ads

This is the most lucrative ad method among the rest of mobile ad methods. The reward Video Ads provide an incentive to the users upon the completion of the video ad.

Usually, game apps use this mobile advertisement feature to give away some sort of reward after the completion of the ad (like some in-game credits). This eliminates all advertisement objections from the users and adds a sense of reward for his finishing the video at the end.

According to Appdeal CEO, states that Rewarded Video Ads provide better Revenue per impression rates and all over ad propulsion share. How good it may sound to use this method, it’s important to provide a balance as well, cause overwhelming the user with rewarded video ads, would use up more time of user than actually inside the app usage.

Benefits of monetization using Ads

Some benefits publisher would receive through a selection of Ads as their monetizing method has the following factors

– Mobile apps remain free to download

– App demands fewer amounts of maintenance cost and app up keeping

– The Ads are best for apps which have regular visitors, like news apps and gaming apps

– Ads have the tendency to display relevancy based on user search history, thus help to gain click-through rate

– Advertisement helps you to provide reward mechanism which customer loves.

 

SleekDigital is a Mobile App Development Agency in Singapore that helps businesses transform digitally. We also offer digital transformation consultation and general digital consultation for companies who are looking for suggestions of different systems to be integrated. This is more of companies who lack a digital consultant to propose technologies. Arrange a digital consultation with us today!