There is no doubt that a mobile app will prove to be a profitable income source for any mobile app development company. However, you might be thinking, how is it possible to start generating money? There are several ways for monetizing an app which we have mentioned in this article.
After installing an app on a smartphone, have you ever thought about the amount of money that is generated by it? There must be something to it. Otherwise, so many individuals would not be making apps right now.
The Apple App Store has over 250,000 apps to download when it comes to mobile games. While including all the app types, the store will be containing approximately 2 million to pick from. The platform of Google holds approximately 3 million apps.
Image Source: Google
Thus, there is no doubt that a mobile app will prove to be a profitable income source for any mobile app development company. However, you might be thinking, how is it possible to start generating money? There are several ways for monetizing an app regarding which we mention in the following paragraphs.
What do you Mean by App Monetization?
This is the procedure of generating revenue from the app. When publishers offer free apps, they will be generating revenue in different ways.
Although developers must use the apps to generate revenue, it can be quite difficult to stay afloat if there is not enough funding. The majority of apps are free to install, and the developers must make adjustments to their revenue model for generating cash after the user has downloaded the app. While creating your business model, you need to make certain that your app can generate revenue plus offer a fantastic user experience.
The Mobile App Marketplace
Mobile apps are used by individuals for various purposes on their smartphones regularly. Recently, there has been a huge development in the mobile apps market. Below, we have provided some statistics:
• The number of mobile application downloads across the globe is 218B in 2020
Image source: Google
- The spending of global consumers on mobile apps is $120B in 2019
- The number of apps used just once in 2019 is 25%
- In 2020, the Subscription model happens to be the most well-known mobile application monetization strategy
- In Google Play Store, you will come across 3.04M apps
- In Apple App Store, you will come across 2.96M apps
What can be Learned from This?
Although advertising was considered the most well-known monetization technique in recent years, subscription became the most well-known app monetization model by the conclusion of 2019. Subscription is applicable for giants such as Spotify and Netflix.
How is Mobile App Advertising Going to Work?
Adding ads to a mobile application will be amongst the most well-known methods of monetizing it. Mobile app marketing services enable you to generate revenues from one application without charging for it. When a user downloads the app, it will be presenting ads to your user. You will receive a fee each time somebody views your ad or clicks it through your app.
This is going to work simply because individuals do not like paying for the apps downloaded by them. Therefore, although the app might be quite inexpensive, if there is any free alternative, the users can prefer it. For this reason, as per Statista, more than 96% of the applications in the Google Play Store were free in January this year.
How will you be Paid? You Must Know a Couple of Metrics
- CPC (Cost per click) – It implies the amount paid by the advertiser for every click on the ads.
- CPM (Cost per mille) – This system will allow the advertisers to figure out the price paid by them every thousand ad impressions. Being a publisher or developer, you will receive payment each time your app receives a CPM ad viewed by a user. CPC ads and CPM ads compete against one another in the Google Play Store. Google will display those ads that will generate more revenue.
The Most Effective Methods for Monetizing an App
While monetizing an application, you enable it to generate revenue for you. Although the easiest way to get this done will be by persuading users to purchase it, it might not be the most effective technique for the targeted audience. Below, we have mentioned some common ways in which it is possible to monetize an app.
Once users pay a fee for downloading an application, they usually do not expect to make payments for any other thing. On most occasions, it is perceived as a one-time purchase; therefore, it should not be included with other sorts of monetization if you select this technique. It is likewise effective for applications that competitors will not be able to copy easily.
Google and Apple have reported that more than 90% of the applications happen to be free; however, this does not imply that they cannot generate revenues. The majority make use of a combo of the options mentioned below for convincing the users to make payment.
3. In-App Purchases
This particular strategy is used by many free apps at present, enabling users to purchase extras that help make an application more enjoyable. It is expected by the majority of the users to see an option for making in-app purchases within the apps, which are free.
Subscriptions will be the most effective technique to use if you would like to have a recurring and predictable revenue stream from the users. This format will be working best for applications where fresh content is added every day, such as video and music streaming services.
Although this option does not get much attention compared to the others out there, it is nevertheless a fantastic way of generating revenue from an audience that you might not prefer monetizing in other ways. On most occasions, sponsorships need at least the sponsor’s logo to appear once your application opens; however, other opportunities might also be there for including sponsored messages within the content of the app.
Various types of strategies can be used for adding advertisements within an app. Typical formats consist of banner ads, playable game ads, and full-screen interstitial ads. It is also essential to understand the options of how your ads generate revenue.
Increasing Engagement for Monetizing your Mobile App
1. Search ads
These will capture the attention of your audience regarding your app and remind the existing users to make use of your app. These apps will be appearing once a user searches similar keywords. Furthermore, you can create ads in the Google Add Network that will appear to only those users who have your application already.
2. Social media ads
Advertise your application on social media using ads linking into your app from sponsored Facebook posts directly. You can do this on Twitter and Facebook.
3. Push notifications
Grab your audience’s attention while they do not use your app. For instance, make your application dispatch notifications according to location triggers. Otherwise, send regular reminders to your users with pertinent and valuable content.
4. Recommendation engines
Use your app using a recommendation engine to suggest related services and products that the user might want. The recommendation engine algorithm can figure out precisely which offers should be promoted, and you make a profit from the referrals and clicks.
5. Promote cross-platform
It is feasible for you to list your app not only in Apple Store and Google Play, and you will come across other app stores and directories outside the United States that might likewise provide revenue. Nobody knows whether your app might be successful in Europe.
App Monetization Tools
You must connect to the advertisers after comprehending how app monetization is going to function. Although selling your ad placements on your own might be one option, it will consume lots of time while coming across clients. For this reason, using an ad network is going to be the most effective solution. Here, we have explained the two most well-known services.
1. Google Admob
Image source: Google
This particular ad network will allow you to manage every single ad in your application. It provides an extremely useful service known as ad mediation, which enables you to link several ad networks to an account and automatically depict the most lucrative ads to the users. Besides this, it offers comprehensive analytics which will enable you to comprehend how the ads plus other monetization techniques are performing.
Image Source: Google
Being amongst the biggest ad networks on the planet, Adcolony provides a comprehensive collection of tools that helps the developers place ads successfully in their applications while monitoring their performance. It can incorporate video ads seamlessly into apps out there.
Is it Essential to Monetize your App?
The answer to this question is going to be yes. Your app will not be possible to generate revenues unless you integrate a mobile application monetization strategy. Therefore, it will be a sensible idea to make certain that you have received the profits of your app and a lower price is charged by you compared to the cost for developing your app.
However, it is not essential to monetize every app. Several apps will be able to make a considerable amount of money without any genuine monetization strategy. For example, a subcontractor project building apps internally.
You are not going to charge your staff for downloading any app employed in your own business. Nevertheless, it will be possible to save plenty of cash in production time and labor costs by developing an app. In addition, your profit will be increasing from other revenue streams of yours somewhere else, although the application does not drive any revenue directly on its own.
Mobile app monetization is undoubtedly a serious challenge for business owners and app developers at present. However, it is not very complicated to make money on an app. The initial thing which you should consider is how the app can make money for you. Following this, you simply need to find which particular stated model will work best depending on your personal choice.
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