AppN2O Gyan: 5 Revenue Models to Monetize your App


App monetization revenue strategies

Let’s get this straight. All of us are in ‘it’ to witness groundbreaking success followed by making money,and making money is what defines a business, ain’t it! Yes, I am pointing towards Mobile Apps and a lucrative app business any one of us can churn out of it. That being said, Mobile App Monetization is a phenomenal characteristic that follows the idea of developing an app. With each passing year, the mobile app industry has only matured to serve efficient, better and more lucrative methods to monetize apps. However, it is easier said than done. So, the crux of the matter is, how would you develop a profitable app?

Most importantly, a big part of finding a repeatable and scalable business model is the app’s monetization strategy. So, make sure that you scrutinize the ways in which you are planning to monetize your users as it directly relates to your lifetime value of customer (LTV). In case if your LTV isn’t higher than the amount of money you pay to acquire a customer, then your business operation in not sustainable enough. Hence, choosing the right monetization strategy is the key.

Let’s find out how these 5 most intriguing and widely used monetization strategies have been performing and how can you make the best out of them.

1. Paid Downloads (Direct Sale)

Without a doubt, the Paid model holds the maximum appeal and stand as one of the most tempting options as it allows you to have the maximum chance of cashing in direct income from your app. However, the paid model comes with its own cons. For instance, an app that charges its users with installation charges, first needs to convince those potential customers to download the app even before trying it. Nevertheless, it totally depends on your product, the audience, and how well you are able to convince them.

So, you might ask, what can we expect out of it in the near future?

Below, I have mentioned some critical statistics that will provide a better scenario of the respective app monetization model in recent times. Also, these stats will certainly help you to take a wise decision while picking your next app monetization model.

By 2016, download figures for paid mobile apps are projected to reach 13.49 billion.

Number of paid mobile app downloads worldwide from 2011 to 2017 (in billions)

Source: Statista

According to Statista, currently only 4% of the 100 top-grossing apps in the Google Play store are paid apps. On the contrary, there is a critical difference to the Apple App Store for iPad wherein 31% of top-grossing apps are paid. On balance, the Apple App Store is providing developers with a higher monetization potential. Developers, are you listening?

2. Freemium or In-app Purchases

The freemium model is one tricky method to cash in users as well as money and it all about thinking of ways in which you can charge beyond the download. The Freemium model is served best and also performs well when users are not forced to make in-app purchases. In case of a Game, providing an option to unlock the secret levels or advanced features through virtual rewards along with the option of availing them by making a purchase, simply gives the users a much-needed space to stay back and engage as much as they want.

Interestingly, the freemium model has proved to be the best money-maker of all the given options, especially for game, entertainment, and productivity apps. Let’s see what the latest stats are signifying, and what are the anticipated opportunities considering the Freemium app monetization model.

 

App Annie & IDC Mobile App Advertising Monetization Trends 2013-2018

Source: Joint report from App Annie & IDC

According to the latest report produced by App Annie and IDC, Freemium app monetization model has been driving considerable amount of mobile app revenue growth. As shown in the above graph, Freemium app revenues surged more than 70 percent. The maturity and general success of the freemium model are evident in freemium model’s dominance of direct app revenue models.

 

3. Ad-based or In-App Ad Monetization

This method is definitely the new substance that holds the key for the future. Interestingly, the world has already witnessed how the ad-based revenue model changed the scope of the web world, and now the mobile app ecosystem has already began to reap groundbreaking advantages.

For your briefing, people download your app for free and every time they are lured to tap on one of the advertisements that they just encountered within your app, you end up cashing in money. However, this method is best suited to those apps that have a better engagement rate. For instance, there’s an app that records your voice and serves you with a weirdest of sound, and there’s another app that offers daily news coverage from around the globe, which one app would serve a better platform for the respective model? Certainly, the news app, because people tend to engage more and on daily basis with it compared to the former, hence bringing in more visibility for your ads.

Well, now its time to reveal some pioneering statistics concerning to In-app advertising model.

Apparently, In-app ad revenue growth has outspaced mobile, PC browser-based ads.

As seen in the above graph, Mobile in-app advertising revenue also grew by 70 percent, outpacing both mobile and PC browser-based ads. By 2018, spending on mobile in-app advertising alone in Brazil, Canada, France, Germany, India, Japan, Russia, South Korea, United Kingdom & United States will be greater than spending on online search advertising, today’s digital advertising juggernaut.

Hence, this respective report’s findings signify how freemium and in-app advertising both will continue to offer greater opportunities for developers to make money out of their apps.

4. Sell off App Monetization Method

A strikingly new and promising app revenue model has embarked to restore the hopes of capable developers. How would you feel when you come to terms with the fact that, someone out there is ready to ‘buy’ your app! Of course, only when you are willing to ‘sell’ it, right!

Let’s say, you had a fabulous app idea and you managed to develop an amazingly intuitive application with utmost robust features. You are pretty sure your app can be a super hit product when hits the app stores. But, what else can you do with your quality application or source code once it is ready to be published?

Now, with the commencement of novel yet distinctive monetization methods like selling off your app or source code to potential buyers, app developers can breathe a sigh of relief in this acute cut throat scenario. In that case, you can also sell or buy an existing app with active users.

I have listed some of the most trusted marketplaces that allow developers to buy and sell mobile applications.

Buying mobile apps has never been easier. Join thousands of satisfied customers who have found the perfect app to buy, right here on Flippa.

Buy and sell the full, exclusive, rights to Mobile Apps.

Top Authors make between $5000 and $20,000 per month selling their Game and App Templates on Chupamobile.

5. Pursuing App Buyout

And, you wake up one fine morning only to realize that your app has made headlines on it being acquired by so and so Fortune 500 Company. Congratulations! Now who wouldn’t wish to hear this over and over again, right? Well, it does sound a tad exaggerated but it surely isn’t impossible, if you exactly know how to come up with a marvel app that isn’t just functional, but it is, in literal sense, one-of-its-kind.

For instance, we already have some great examples right in front of us- Twitter acquiring Periscope, Yahoo obtaining MessageMe and Summly or Microsoft buying calendar app Sunrise.

While there are thousands of rip-offs in the app store trying to make it big, it definitely counts when you put in your extra efforts to create and develop an app that is Unique and of the best quality. In that case, you can rest assured of reaping astounding results at a longer run, if not immediate, considering acquisition.

Closing

Last but not least, your app revenue strategy should be integral in the app design process, rather than an afterthought.  All of the above mentioned methods can be useful, however you might not want to employ all of them. Hence, you may pick the ones that you find working best and after some critical consideration and brainstorming, you can decide which app monetization method suits best with the type of app you are offering.

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