Blog / App Monetization / An Ultimate Guide to Mobile App Monetization Model

An Ultimate Guide to Mobile App Monetization Model

Chandrapal Singh By Chandrapal Singh | June 5, 2019
app-monetization-model

By 2020, the mobile industry will hit a market of around $189 billions. While this, on one side, gives a hint that investing in mobile application development is a profitable investment, it, on the other side, throws light on the fact that the competition is going to be high. This implies that the process of how to rank your application and make money making apps will become more tough.
In a scenario like this, the optimal way to ensure that you reap higher profits from the process of developing a mobile application is considering the right mobile app monetization model – something about which we will discuss in detail in this article

So, here we begin with a simple definition of what is App Monetization model.

Mobile App Monetization Model- What It Exactly Means?

App Monetization Model, as depicted from the name, refers to the way via which you can monetize your app. It is referred as a strategy or framework that demonstrates how will your app make money, generate higher revenue, and make you earn profits over investment.

Now, when talking about mobile app Monetization model, there are different strategies considered by the mobile app developers and businesses,  about which we will discuss in the next section of the blog.

5 Monetization Models to Consider for Your App Project

Types of Monetization models considered in app industry

Freemium

Freemium, as the name denotes represents the combination of free and paid app features. Considered as an answer to how do free apps make money, this model provides users some of the app services for free in the beginning, but to a limited extent. To unleash the full potential of the application, or better say, employ all the features of the app, the users will be asked to pay a premium amount.

For example, JIO TV app offers the facility to watch the TV serials for free. But, with a premium access, you can watch them before they are broadcasted on the TV screens. This new feature encourages users to go for premium and get unique features.

In-App Purchase

Just like Freemium, the In-App Purchases model also empower users to download the application for free. But, to avail all the features, they will have to pay some amount of money. For example, m-commerce apps ask for money in return for the opportunity to sell/buy real or virtual goods, and education applications employ this for unlocking new levels. [Learn here: The Hack of Promoting Your In-App Purchases]

Paid Apps

Paid app monetization model, as the name depicts, is a monetization model that help mobile apps make money by adding a price tag to them. It avails the target audience with an option to use all the features and functionalities of your app, but only when they pay the pre-decided cost.

Now while this mobile app business model seems easier and effective, it is effective only when you have a long-term bond with your audience and have mastered the art of building brand resonance using marketing tactics.

Advertising

When it comes to how much money can you earn through an app, the most popular way considered by developers is Advertising. They display some advertisements in their applications and get paid from the advertisers corresponding to when and how many times users watch those advertisements or click on them.

Now, when talking about introducing this app monetization method into your app project, there are two ways to include advertisements:-

  • An advertisement that is shown at certain time gap while using an application.
  • An advertisement added as a sticker or carrousel in the application.

Sponsorship

This is a comparatively new mode of app monetization to enter the mobile market. In this process of monetization for mobile app developers, they look ahead to sponsor some other companies/products to their audience. For example, they encourage users to participate in different activities associated with that brand such as surveys, polls, quizzes, etc. to get some kind of recognition, reward, and revenue.

Now as we have seen different ways to generate revenue and make money from apps, it is likely that you must be confused which one will suit your app project. So, taking the same thought forward, let’s dig out factors that will assist you in making the right choice.

How to Choose the Right App Monetization Model

The answer to how to find the mobile app monetization model that fits to your business depends on various factors, such as:-

Factors to consider when choosing app monetization strategy

App Purpose

The foremost factor playing a pivotal role in determining the optimal app monetization model is the core of your application. That implies, looking into what your app purpose is, what type of elements it will entail, and what functionality it offers.

This is because every app type works with a different mechanism and thus, can’t go with any monetization model.

User Persona

The second factor to determine while choosing the right mobile app monetization strategy is user persona, i.e., what type of users you have and how much they can pay.

For example, if your target audience is from developing nations, they won’t be able to pay heavily for your application, implying paid monetization model is not fit for you.

Likewise, if your app is meant for Entrepreneurs, paid and subscription models will be more effective over in-app advertising monetization model.

So, think accordingly.

Competitive Analysis

Considering which monetization model your competitors are employing and the revenue they are generating is also helpful in taking the right decision of introducing an app monetization strategy, just like that in the case of calculating how much does app development cost.

So, do not overlook this opportunity.

Considering which monetization model your competitors are employing and the revenue they are generating is also making it easier to take the right decision and look forward to introducing an app monetization strategy that makes your app successful.

Latest Trends

Last but not least, the latest trends prevailing in the marketplace also helps to determine which model is apt for your business. These trends make it easier for you to look into what users need and demand, and how much profits are they bringing to the respective businesses, which is further helping in making a better move.

So, as we have seen above, having a knowledge of the recent trends also make a difference in the process of finding the right app monetization model. So, let’s wrap up this article while looking into which trends will shape app monetization sphere in 2019 and later.

Top App Monetization Trends to Follow in 2019 and Beyond

Top App monetization trends

White Label Services

The very first practice that is gaining a huge momentum in the mobile market is White label app monetization. It is empowering businesses to share their app code with other developers to reuse their elements and redesign their application and getting some revenue in return.

Buying Merchandise

Another method of app monetization that is ruling the marketplace is purchasing merchandise. This implies, by selling customized products in relation to your app functionalities and features.

For example, Angry Birds sold plush toys of their characters to promote their application and drive higher revenue.

Integration of AR/VR

In 2019 and coming years, AR and VR monetization trend will also become prominent. App developers and marketers will use these technologies to promote their businesses using customized/virtual ads. They will use real-time user data to understand the perfect time, place, and avatar, and make a profitable move.

Involvement of Artificial Intelligence

Machine Learning and AI are also contributing as a significant app monetization trend to consider in the year 2019 and beyond. The technology will assist the mobile application development team to gain a comprehensive knowledge about their target audience and determine how much revenue can be generated from every individual. This will eventually help them to build more profitable In-App Advertising and In-App Purchase strategies.

Focus on App Usage, Not Downloads

Last but not least, app developers and businesses will focus more on how to increase app user engagement and retention over the ways to improve the user acquisition numbers. This is because an existing customer makes more purchases and spend more per visit, when compared to new customers.

Now, as you are familiar with what all app revenue strategies exist in the market and how to choose the right mobile app monetization model for your business, it is likely that you will be looking ahead to take the next major step. That implies, looking forward to putting all your planning into the process of creating a mobile application. So, taking the same thought into consideration, if you are looking forward to hiring a mobile app development company, contact our experts today.

Chandrapal Singh
Chandrapal Singh

A technocrat and an entrepreneur who is the Co-Founder and Chief Delivery Head at Appventurez. Skilled in object-oriented programming (OOP), iOS Development, Design Principles, Data Structures, and Swift, he has served different organizations as Tech Lead.

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