Why does someone develop an App? This question is very subjective, and the answers can be different depending upon the context of the topic. However, today we would like to explore this question with a business and revenue hat on our head.
App development is now no longer a side-activity. App development has entered a mainstream business domain now. There are mobile apps which are business in itself, viz. Uber, Lyft, GrubHub, and many more. What are these businesses without Apps? Nothing!
The most important factor in keeping a business running is MONEY. Whether or not you are in an app-dependent business like the ones mentioned above, generating revenue through the Apps is the most important factor to keep the app and the business running. When an entrepreneur thinks of developing a mobile app for his/her idea, at the back of the mind, revenue is always there. The end goal for any app development activity is the revenue and returns behind it and that is why people develop apps these days.
How do you get revenue from Apps? Is the next question now. This is where the app monetization concept and monetization strategies come into the picture. Let’s first explore what an app monetization means.
What is an app monetization?
App monetization is the process of generating revenue from your mobile app. In simpler terms, it's how you make money from your app. There are various strategies to achieve this, and the most successful ones involve finding a balance between user experience and bringing in income.
It was estimated that by the end of 2023, the global app monetization was to surpass $935.2 billion. The statistics are self-explanatory and speak for the app monetization aspect of the mobile app development activity. Sooner or later, app monetization in today’s world is a necessity if you want to survive for a long time.
Source:
https://www.zipdo.co/statistics/mobile-app-monetizing/
App monetization can be of different types and each type has its pros, cons, and industry of usage. Not all strategies are for all the app ideas and a lot depends on various factors like:
- App Idea
- Business domain
- Audience Demography
- App development and maintenance costs
Top Monetization strategies for mobile apps in 2024 and beyond
1. In-App purchase model
Perhaps the most commonly used model in the App development industry is the in-app purchase model. The in-App purchase model, as the name suggests, involves the users purchasing something from within the app while they are using it.
The way the in-app purchase model is implemented differs from one app to another app. An example of the In-App model can be seen in a very famous app called HeadsUp! Where users, after they download the app, need to purchase a deck of cards to play the game.
The in-app purchase model can be used for consumable and non-consumable types of things. Considering HeadsUp!, a deck of cards can be considered as consumable but, removing an ad can’t be considered as consumable as you paid one time to remove the ads and that is of no use in your app functionality experience.
2. Subscription model
This monetization strategy works as it sounds. Ideally suited for the news, magazines, SaaS-based apps, and so on, where the users are served regularly with new content, or they need to keep on using the services on a regular basis.
The users enroll themselves on a subscription, which can be either monthly, quarterly, or yearly. The auto-renewal option is also implemented with this model, where the users are automatically charged the subscription amount every cycle.
An example here would be, suppose you are a news agency which publishes an e-magazine every month. You can enable the subscription model on your app where your users need to pay a fee monthly if they want to receive the latest magazine automatically when it’s published.
3. Ad Integration Model
The ad integration model involves incorporating advertisements within your mobile app to generate revenue. Usually, this model works automatically by third-party service integration such as Google Ads, Meta Ads, AdMob, and so on.
There are various ad formats you can integrate into your app:
- Banner Ads: These are typically rectangular ads displayed at the top or bottom of the app screen.
- Interstitial Ads: These are full-screen ads that appear between activity transitions within the app, like between levels in a game.
- Rewarded Video Ads: These offer users an in-app reward, like extra lives or virtual currency, in exchange for watching a short video ad.
- Native Ads: These are designed to blend seamlessly with your app's content, such as sponsored content listings or in-feed ads.
Any custom app development agency can integrate these ads to your mobile apps.
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4. Sponsorship and Featured Model
This model works inside the mobile app and can be put in the in-app purchase model as a sub-category to it. Usually, this model is implemented as a feature in the mobile app. This model is suited for the apps which are in the domain of listing, positions, and so on.
A perfect example of this model is in real estate and online review apps like booking.com, yelp, Tripadvisor, and so on.
In this model, the listee pays to the platform to get a ‘sponsored’ or ‘featured’ to be on the top of the listing. This model typically gives advantage to the least popular listees to get a wide outreach amongst the app users. If your app is in the business domain that offers listing functionality, implementing the featured model will do wonders to your revenue stream.
5. Affiliate revenue model
The affiliate revenue model, also known as affiliate marketing, isn't directly applicable to most mobile apps. It's more commonly used on websites or within apps that have a content browsing function.
However, it can still be a valuable revenue stream to consider in conjunction with other app monetization strategies.
- Affiliate Partnership: You partner with other companies or platforms that offer products or services relevant to your app's target audience. These partners provide you with unique affiliate links or codes.
- Promotion Within Your App: You strategically promote these affiliate links or codes within your app. This could be through product reviews, sponsored content sections, or banner ads.
- User Clicks and Purchases: When users click on your affiliate links and make a purchase on the partnered platform, you earn a commission on that sale.
Conclusion
Developing an app is an ambitious task. A lot depends on how the app will do in terms of popularity and also the revenue it generates. Certain businesses run on apps and certain apps are themselves a business. Implementing monetization is an essential thing in today’s app development space.
While defining the monetization strategies, it is important to look into multiple aspects before finalizing any one strategy. If needed, the monetization strategies can be mixed and work in conjunction. Ask your custom app development company today about these strategies and implement it in your apps to get the maximum ROI.