In this Article we will look into, How to monetize a mobile app. There are two types of app monetization strategies: direct monetization and indirect monetization.
Direct Monetization
Direct monetization is money generated directly from your app.
If an iOS or Android user pays Rs.100 to download your app from the Apple App Store or Google Play Store, the money comes directly from the app. Similarly, When someone uses an ecommerce app to buy products from your business, the sale is coming directly from your app.
Indirect monetization can be explained by taking an example of a standalone product or service that comes with a free app. In such a scenario, the app is secondary. You will be making money whether the app gets used or not. Indirect monetization is famous within software products or services.
Let\’s dive into some monetization techniques, models and strategies
You can charge users a certain fee to download the app.This is one of the simplest ways to make money with an app. So, make sure your app is worthy and that will force people to download your app. Provide value and create a need for your app.
According to Statista, the majority of apps are priced below 1 dollar.
While pay-to-download is a simple app monetization model, it has its drawbacks. You can’t expect to get nearly as many downloads as you would for a free app because some people won’t consider installing an app if it’s not free.
If you have played games on your phone or any other device like PUBG, Call of Duty etc. you would know what this model means. Gaming apps love to leverage the in-app purchase methodology for virtual coins or experience upgrades. For example, users playing a mobile gaming app could spend money to unlock a new vehicle, weapon, map, or something along those lines. But mobile games aren’t the only way to monetize an app with in-app purchases. E-commerce websites can build an app as a way to increase mobile sales. Your customers are buying directly from your app like amazon, myntra etc.
This type of model helps to generate recurring revenue with an app. The Apple App Store and Google Play Store both make it easy to set up a subscription business model with your app.
Users sign up for a subscription once, and they’ll continue to get charged on a recurring basis until they manually cancel the subscription. Netflix is an example of a subscription based model.
Subscription apps could be applied to a wide range of industries and potential use cases.If you’re creating a fitness app, you can charge users a monthly subscription for access to workouts, videos, and training routines.
The freemium app model is a combination of subscriptions and in-app purchases. Offering your app for free is the first step to using the freemium monetization strategy. Next, you need to offer different versions of your app—free and premium.
The idea here is to offer a free version with basic features and an upgraded version that delivers a better user experience.
Anyone can download the app for free and listen to music for free. However, you’ll be interrupted with ads between songs. There are also some limitations and contingencies in terms of skipping songs, searching for songs, and playing what you want. Spotify uses such a model.
Ad revenue is an extremely popular app monetization strategy and can be implemented for free apps. Free apps generate revenue by having ad spaces. With this method, you’re selling space within your app for advertisements.
App advertising can come in all different shapes and sizes. Not only are there different types of ad formats (video ads, banner ads, native ads, pop-ups, interstitial ads, etc.), but there are also different revenue models within this category:
in-app purchases would be the obvious monetization model for an e-commerce app. Using ads based model for an e-commerce app or charging for downloads probably won’t be the best idea as Ads can take attention away from the products you’re selling, and making users pay extra for the ability to buy products through the app doesn’t make a ton of sense either.
