Maximising Monetisation: Strategies To Generate Revenue From Your Mobile App
More than 70,000 apps get added to Google Play Store every month. In February 2023 alone, approximately 87,000 mobile apps were released through the Google Play Store. Today, creating an app has become easy, but having an exemplary app alone is not enough to ensure financial success. To convert your app into a profit-making entity, you must also select the appropriate monetisation strategy.
Before delving into how to maximize your app's potential for monetisation, it's essential to examine the current state of the mobile application market and its profitability. As of 2022, the mobile application market had a global value of USD 206.85 billion, with an expected compound annual growth rate (CAGR) of 13.8 per cent from 2023 to 2030. The primary contributor to this market was Apple’s App Store, which held over 62 per cent of the worldwide revenue share in 2022. Meanwhile, the Google Play Store had the most number of downloads in 2022 and is projected to maintain its dominance in the year 2023.
These numbers indicate that it is not enough to create an app that users adore, you must also choose the right monetisation strategy that makes these users go from mere prospects to revenue generators.
Get The Foundation Right
The first step towards creating a profitable app is acquiring relevant users and that has to be done with a sound marketing strategy to stand out among the vast number of mobile apps available. Targeted advertising campaigns, influencer marketing, social media outreach, and App Store Optimization (ASO) are sound marketing strategies that every app developer needs to be aware of. By investing in marketing your app, you can increase your revenue and your user base.
Once you have a solid user base, it is then time to reap the benefits and earn some revenue. It is crucial to ensure that the strategy you choose integrates seamlessly into the user experience. If executed poorly, app monetization can quickly turn users off and damage your reputation.
Strategies To Monetise Your App:
There exist many strategies to monetise your app but a few have stood the test of time and are definitive measures to help your app gain revenue.
In-App Purchases
Picture this: you are on your mobile phone, playing your favorite game and you have reached a challenging level. Suddenly, a pop-up appears, offering to unlock new levels for free. You have the option to weigh the pros and cons before you decide that it is worth keeping the fun going. This is the power of in-app purchases. By enabling users to spend money on products and features, this strategy can greatly boost revenue for businesses.
But in order to make in-app purchases appealing to users, it is necessary to price them reasonably and ensure it is also user-friendly.
In-App Advertising
In-app advertising is a monetisation method that displays ads to users within an app as they use it. In fact, a recent report revealed that 70 per cent of consumers discover new apps via ads.
There are various types of in-app ads, including banner, video and interstitial ads. These ads can usually be personalised based on the user's preferences or behavior by testing them, making them more relevant and effective.
The chief selling point of this strategy is that it enables developers to earn revenue without directly charging the user. This is particularly useful for free or low-cost apps that do not generate significant revenue from installs and signups.
It's important to place ads strategically, such as during natural breaks in the content or at the end of a game level, to minimise user frustration and avoid the risk of users abandoning the app. It is also crucial to ensure that the ads do not violate any policies set by Google. Violating them could lead to their apps being demonetized. By offering a variety of ad types and placements, developers can increase potential revenue from advertisers while still providing a positive experience for app users.
Subscription
A subscription-based model is another noteworthy manner to maximize app revenue. Not only does it allow you to offer your app for free, but it also creates a stable revenue stream that can lead to long-term success. A report suggests that 52 per cent of Product Owners who have implemented a subscription-based model have seen a positive impact on their business, including an increase in user base and revenue.
But as with other strategies, execution is a crucial metric. It is vital to walk the thin line between offering enough value to convert free users to subscribers and maintaining subscribers' satisfaction. This can be achieved by providing exclusive features to subscribers on a regular basis. This will give users a valid reason to upgrade to a subscription and keep current ones from churning.
Data Monetisation
Data monetisation has become a much-talked-about topic in the world of app development and for good reason. Selling access to the data your app collects is a lucrative stream and can make an effective app monetization strategy. Data monetisation is a method that app developers use to earn revenue by selling or licensing access to the data collected by their app. This may include user data such as demographics, preferences, and behavior patterns, as well as data collected by the app itself.
However, with this strategy, it is vital to incorporate ideas of caution and transparency. Acquiring the users’ consent while making use of their data is crucial. Users are increasingly aware of their privacy rights and failing to comply with privacy norms can be harmful to your credibility as an app developer. It is important to strike a balance between collecting valuable data and respecting users' privacy. This can be instrumental in building trust and a loyal user base.
Paid Apps
Paid apps are those that require users to pay an upfront fee to download and use them. Paid apps are a good option when they provide users with significant value or a premium experience. For instance, a productivity app or a unique mobile game could be successful with this model since they are sought after to improve individual/ team performance. In mobile game monetisation, the paid model may be a good option if the game is particularly popular or unique in the market.
However, the price of the app must be competitive and aligned with the value the user is receiving from their purchase. It's important to ensure that the app's features and functionality match the cost and that the pricing is not a deterrent for potential users.
Finding The Right App Partner Is Crucial
To achieve success, optimising an app's monetisation strategy is essential, taking into account factors like user behavior, user experience, pricing, advertising and more. This is where partnering with an app growth partner can be beneficial. Collaborating with a technology partner for app monetization can provide numerous advantages for your business. By utilising their expertise, technology, and tools, you can optimise your app's revenue streams, boost efficiency, and obtain valuable insights into your app's performance and user behavior.
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