If you spend a considerable amount of time designing an app there’s no doubt you are wondering about the next important thing: How do you monetize your app?
After all the hard work you invest in building the app, you will be looking forward to getting some brand recognition, increase consumer awareness for your product and gain the loyalties of your new customers. The usefulness of an app can only be measured by the total number of its users; those who actually regularly use the application after downloading it as well as how much money it generates as revenue. Apps like Facebook, Instagram, and WhatsApp were designed and made huge revenue for the developers although this does not always apply in all cases. Normally, the average app does not usually generate billions in revenue and just like in the publishing industry, thousands of authors spend a lot of time in writing but only a handful of them are actually bestsellers.
While it is okay to remain confident and optimistic about being successful in your work, it is also good to consider the fact that the same app you’re developing has less likelihood of making you rich. Various statistics show that about 2% of app developers believe that they are entitled to more than 50 percent of the income generated from apps. Be realistic about how you visualize your success.
Consider the following during app monetization:
Several app monetization models have been formulated and are used widely. Be sure to use the method that will work for you best.
The first step is to develop a clear outline of what you want to accomplish with the app. You may consider factors like:
• whether your app has the ability to solve the problems that the user encounters and if yes, then how
• The features that make your app stand out among other apps of the same nature that are also in the market.
• What the value of your app is, that will make the users willing to pay for it
• Do thorough research on similar apps in the market and find out the model they use to market their applications
After you are certain that you have satisfactorily addressed these factors, you can proceed to the next step of creating your own model.
The following strategies may go a long way in monetizing your app:
1: In-App Adverts and Free App
The model of in-app adverts placed in free mobile apps is the most attractive and creates a win-win situation for users and developers because users download the app free of charge while you as the developer, generate revenue through the sale of advertising space.
How in-app ads work
I. Gather as much information as you can about the users
II. After forming a strong base of users, you may sell the data you collected to various in-app advertising companies
III. Publishers will then select your request to place adverts Consequently, advertisers reach your users through the popups or banners that contain the ads which normally appear either at the top of the app or sometimes at the bottom. Interested users can simply tap the ad, and all sorts of options open up ranging from videos to redirecting the user to the advertiser's website.
Also, notification ads form part of the in-app ads. Others dub them "Trojan horse ads" because they sometimes send you to notifications with advertisement messages even if the mobile app is not in use.
Nevertheless, they can be of some help while contemplating the best way to monetize an Android app since this is the only platform that supports them. However, you may encounter a few limitations in the process of monetizing these apps. Some users find the advertisements rather irritating and may resort to not using the app or downloading it all together. In addition, take into consideration the possibility that some sizeable ads may occupy a considerable space thereby limiting the space for your app.
2: In-App Purchases
In this strategy, the app developer generates revenue by selling either tangible or virtual services and products within the application. The developer is at liberty to sell goods and services of any nature ranging from gadgets, clothing, and virtual items such as extra lives in mobile games. Technically, in-app purchases turn your app into a sort of a platform for sales.
This strategy of app monetization is particularly applicable in e-commerce applications and games. Among the added merits of in-app purchases is that you can attain greater engagement levels with your users as you provide them with a platform on which they can purchase virtual goods. The only shortcoming with this business model is that the revenue generated is shared between the developer and the app stores since they generally take a certain percentage of the total revenue collected from the sale of virtual goods sold within the application.
3: Apps with Gated Features (Freemium)
To some degree, this model resembles the free apps model. The app can be downloaded free of charge, but some of the features are gated (locked) thus, in order to unlock or access them, the user is required to pay some amount of money. In simpler terms, users can freely access the app's basic functionality, but they have to pay for premium features of the same app.
This model works best and common in games. A good example of a freemium model where this strategy was successful is the Angry Birds game. The developer managed to generate significant revenue while users managed to upgrade the application to the full version of the game at a small charge. After conquering some levels in the game, users became so engaged that they had to pay some amount of money to unlock the full version which translated to more revenue for the company.
4: Paid Apps
Some developers price every application download at a constant rate. The price of creating an app fluctuates depending on its specifications, nature, and functionality. However, it is important to exercise fairness when determining the price of your app so that you can get as many downloads as possible. Nevertheless, this model requires extra marketing efforts since you need to convince potential consumers to get the application by stirring the need for which it will satisfy.
If you resolve to use this model, you set the price for your app after which users have to buy your software from the online marketplace before installing it in their devices. It is essential to appreciate that prices of paid apps vary, but they usually start from $0.99. This price is the most commonly set by developers, and the company makes gets upfront money with each download.
However, the success of paid app model is fully dependent on how well the developer is able to convince users to pay for the value of the app while as app stores have so many alternatives some of which are available for free. Your paid app should, therefore, portray irresistible benefits that set it apart and make it stand out from similar apps available for free. You can achieve this by adding unique features to your app perhaps through design, brand or functionality.
5: Subscriptions (Paywalls)
This prototype somehow resembles the freemium one except for that payment for extra features is through subscription. Other than the locked attributes, the user is accorded access to limited content without any charges and required to register for specific packages to get more. The model allows the developer to recurrently make more cash. It is most suitable for content-focused apps like entertainment, news, and lifestyle and shares a lot of characteristics with "free trial" and "pay later" models. Moreover, mobile applications with updating content are also designed to earn money through ads placed inside them by other brands.
6: Incentivized Advertising
This model incorporates some element of sponsorship where an app developer teams up with marketers, who gift users for carrying out some in-app actions. As a developer, you generate revenue by subtracting a percentage of the money from the redeemed rewards. Among the first applications to adopt this model was RunKeeper, which makes use of incentivized advertising to encourage users to keep track of their running activities in order to unlock promotions and rewards from various advertisers.
As the competition for app market intensifies, as a developer you need to use more creative approaches when designing your apps and building your monetization strategy. You don't have to necessarily rely on a single model but rather use a combination of models for optimum results. For example, you can kick-start your monetization strategy with a "free, but with ads" model and then with time, offer your users an ad-free paid upgrade version. In conclusion, blend creativity with confidence courage, and you are bound to succeed.
Then with time, offer your users an ad-free paid upgrade version. In conclusion, blend creativity with confidence courage, and you are bound to succeed.