If it occurs to you that your life is somewhat dependent on a mobile phone and mobile apps it has, you’re far from alone. Some of us can’t imagine a day without using budget apps. Others confess that they can hardly live without a social networking app. Some others rely on mobile apps when it’s time for a workout. Take a look at the App Store or Google Play and you’ll see that mobile apps come in all shapes and forms. There is an app for virtually anything you can think about. Furthermore, dozens of new apps enter the market every day.
There’s no need to be a financial guru or upscale entrepreneur to realize that mobile apps are a great source of income for both developers and app owners. But did it ever cross your mind how exactly a popularity of certain apps converts into money for their owners? It turns out, it all comes down to mobile apps monetization. If you want to learn how mobile apps generate money even if they’re free, go read this article from cover to cover.
Mobile Apps Run the Show
Although most of the people understand that the number of mobile apps is huge, only a small percentage realize how many apps are actually present on the market. In fact, there are over 2.2 million apps on the App Store alone and nearly 2.8 million of apps on Google Play. Needless to say, these numbers are going to increase in the future. With so many mobile apps out there, it comes as no surprise that the number of mobile users has already surpassed the number of desktop ones. In addition, mobile apps account for as much as 89 percent of mobile media time on average. This means that only 11 percent of this time is spent on websites. These facts point unambiguously to one thing. The mobile apps hold a huge potential for many businesses. So now is the best time to launch a mobile app of yours.
App Monetization: What is That?
Before going into details about mobile app monetization, it makes sense to clarify what exactly should we understand by the term. Simply put, the monetization of mobile apps is a process of making money on a mobile app. Of course, the easiest approach would be asking people to pay for a download in the first place. However, this approach has certain drawbacks. The major one is that there are tons of free apps on the app market, so users are not likely to choose paid alternatives.
With mobile apps monetization, however, it’s possible to earn money on a mobile app without asking direct users to pay for downloads. There are plenty of approaches to mobile apps monetization. And we will consider each one in detail. So let’s waste no time and dive right in!
What Are The Top Mobile App Monetization Approaches?
Advertising
One of the easiest, most obvious, and commonly used ways of mobile apps monetization is advertising. The vast majority of free mobile apps take advantage of this approach, and for good reason. The benefit of this type of monetization is twofold. Firstly, mobile app owners get paid each time a user interacts with an ad. Secondly, app owners can offer users an option of using their app without advertising by paying for a subscription or upgrading their accounts. Whichever option users choose, the app owner wins.
Additional perk: if ads happen to be especially relevant for the audience, the rate of interaction with ads starts to grow and so does the revenue.
Freemium
Another great way to make money on a mobile app is to build it on a freemium basis. This means that people can download an app for free and use a limited number of its features without having to pay. If they decide to get access to all features an app has to offer, they’re asked to subscribe or pay a one-time fee. So the term freemium stands for ‘free with limited functionality’. What makes this approach especially great is that it gives users a taste of what is in store and only asks for money in case users decide to get additional benefits. The biggest challenge of this approach is to find a happy middle, a balance between what should be given for free and what’s better to remain locked until a fee is paid.
Subscription
The idea of this model is similar to freemium, but with one exception. Unlike the case with a freemium model that limits access to features, subscription model puts a limit on access to content or service. According to this approach, users can consume a limited amount of content for as long as they want. Or an unlimited amount of content for a limited timeframe. To put a stop on all limits, they need to pay. It is worth being said that this approach is only good for those businesses who produce compelling content on a regular basis.
Sponsorship
This approach to mobile apps monetization is considered one of the newest and one of the most innovative ones. However, it works only for mobile apps with a well-established customer base. The idea of sponsorship is to directly approach brands and discuss possibilities of in-app advertising. Branded rewards can be used to motivate users to get back to the app more frequently or invite friends to download the app too. The tricky part is to integrate branded content seamlessly without spoiling an in-app experience for users.
In-App Purchases
Yet another model of mobile apps monetization is to encourage users to make in-app purchases. This monetization model is exactly what it sounds. The idea is to enhance users’ in-app experience by offering them additional good or service. This can be something like buying in-app game currency or unlocking the new level of a game. Alternatively, it can be a purchase of hardware products that are somehow associated with the idea and purpose of an app.
SMS Marketing
Here’s another great approach to mobile apps monetization. By doing something as simple as asking users to give their mobile numbers, one can get plenty of benefits, including financial ones. As soon as there is a good volume of mobile numbers collected, it’s possible to get direct feedback from them, send them newsletters, showcase promotions, and contest. These all help build brand loyalty. While brand loyalty, in its turn, tends to translate into revenue.
Signups and Emails
Similar to previous one, this approach to mobile apps monetization is primarily focused on emails. The core idea is to push newsletters and company updates through an app. Basically, a mobile app can be used for driving more traffic to a website. And there your potential customers will be able to make an actual purchase. This type of mobile apps monetization serves as a living proof of the fact that mobile apps can be another leg of a brand chair. Why not make use of this fact?
White Label Code
As one of the greatest ways of mobile apps monetization, code white labeling has been the talk of the town in marketing communities for already a couple of years. According to the experts of the field, this revenue model is surely the one worth looking into. If an app boasts a quality code, it’s possible to make money by selling the app structure in a white-label format. Creating an app takes time and money. As a result, people are likely to be interested in buying a ready-to-use solution instead of building their own from scratch.
Data Monetization
As long as one keeps privacy law in mind, selling data might be another great way to get revenue from a mobile app. Some marketers might be looking for information one’s app generates. And there’s nothing wrong with selling it. Thanks to this data, marketers can create super-targeted marketing campaigns for their customers and achieve better engagement rates. This is something they’re willing to pay for.
Support from Investors
There’s one more way to make money on mobile apps. And this one should never be overlooked. In case one has a unique idea embodied in a mobile app, raising funds from investors might be one’s best bet. The best thing about this approach is that the more exposure an app gets, the more interest from investors comes. This way, app owners and developers can get a solid financial support for further development of their project.
For the Finals
Important to realize that the global revenue from mobile apps is expected to reach $102 billions by 2020. Obviously, mobile app industry offers huge potential to both tech entrepreneurs and mobile developers. With so many approaches to monetization, a mobile app can become a great source of passive income while bringing benefits to its end users.
The mobile apps market is growing, which means now is a good time to create a mobile app of your own. You can do this by yourself or with a help of professional developers. The one thing you’d better remember is that only quality mobile apps are possible to monetize. This means one thing: the process of mobile app development is better to be entrusted to experience and smart professionals. In addition, it is highly necessary to know how to spread a word about your product. Recently, we’ve created an ultimate guide on how to promote your mobile app.
Our Android and iOS developers, UX designers, project managers, QA engineers, and marketers are able to create slick mobile apps, for practically any business niche. We consult our potential client with the user needs, as well as the success of the client’s business in mind. Choosing the most suitable models for monetizing their apps is our highest priority. Contact Adoriasoft today and you’ll get a free consultation and estimation of your mobile app development project!