A good app monetisation plan is needed in addition to a brilliant idea for building an app for your business to be successful. For this reason, it's essential to create a variety of revenue streams and figure out how to maintain them right away.
According to the survey via Forbes, consumer spending on mobile applications increased to an all-time high of $33 billion in the first quarter of 2022. Even while the pandemic-related surge is less of a growth driver for mobile, that is an increase of 40% in just two years.
Deciding which app monetisation method is ideal for your business is important. Although there are many strong and effective strategies, what works best is what is right for you.
Consider what makes sense for your user experience while choosing the appropriate monetisation strategy. Learn more about app monetisation and how app monetisation requirements work below.
What is app monetisation?
App monetisation is the process of earning money from app users. It is important because it's becoming more common to locate programmes that are free at the time of installation. As a result, the app's business model needs to be adjusted to account for this, according to Applovin.
This method uses a variety of strategies. Some app categories are better suited to certain app monetisation techniques than others. Some apps only focus on one aspect of app monetisation, while others include multiple.
Additionally, a good app monetisation strategy must prioritise user experience because revenue depends on happy customers.
The main indicator of revenue from monetisation is the number of active users. User experience has a direct impact on this number, developers need to consider it when selecting an app monetisation approach.
How does app monetisation work? Let’s dive into app monetisation models below.
App Monetisation Models
Here are some of the model app monetisation you need to know, according to Businessofapps.
1. Paid apps
When mobile app stores first came out, most apps were purchased and it was the only monetisation strategy. Further, advertising and in-app purchases came into play.
Today, the Paid Apps model is still more profitable than alternative models for several app categories. These include Navigation, Photo & Video, Productivity, and Utilities. The iOS App Store App Bundle concept, which enables iOS app customers to buy and download several related apps from the same app developer at once, is based on this approach.
2. Freemium
With this business model, app developers allow users of mobile devices to download apps for free to use with a limited set of functions before charging them for more features, in-app content, or digital items. This concept is the exact opposite of a desktop software free trial model.
Making a well-planned decision regarding which app features to offer free of charge and which ones to include in an additional set for which you will charge app customers is required. The iOS App Store policy allows developers to provide in-app purchases on several levels, giving them the freedom to give users new features at various price points.
3. In-App Purchases
The Consumable option deals with the in-app purchase of numerous consumable commodities in games that app users must restock while playing the game. Non-consumable in-app purchases are those that consumers must make only once to access a greater variety of features.
Further, users can pay for certain services or often updated app content using the auto-renewable type of in-app purchases. The latter option entails paying for a subscription only once and receiving access to a specific app’s content for a set length of time.
4. In-App Advertising
By showing in-app advertisements, mobile apps are most frequently made profitable. 50% of mobile gamers prefer free games with ads. Apps that want to remain free in the app store may use this method to generate a useful source of income.
A great user experience may be produced by offering your users relevant information and ad formats. It was only natural for app developers to incorporate it into their mobile apps, but by that time, current banner styles had to be modified for a significantly smaller digital screen area.
5. Subscriptions
The benefits of this model are obvious, as are the benefits of any recurring revenue generation model - financial predictability and the ability to provide your app user base with consistent value throughout the app's lifecycle.
App developers can use this model to offer multiple plans with an upgrade, downgrade, and crossgrade options. Further, this model can be used when mobile app users switch from one subscription plan to a comparable one.
6. Lead generation and affiliate marketing
Affiliate marketing for mobile apps is receiving a commission payment each time a user clicks a link inside your app to download an app or do a specified activity with it.
You must decide which specific applications to advertise inside your application, apps that can enhance your app's user experience, for your app monetisation plan to succeed.
7. Sponsorship
A sponsorship is a form of advertising that isn't always visible to app publishers. If your app has a large user base and a high level of user engagement, you might think about brainstorming what other businesses might gain by promoting their products or services to your audience, as well as how it would benefit your users if it were to succeed.
8. Licensing
If an app's operation requires gathering user-generated data, user consent for data collection should be a top priority for your business plan.
If you have the technical tools to collect data, such as geolocations, you should also think about licensing your data to other companies. By doing this, you will be able to offer an app for free to your end customers and earn money from it by licensing your app's data.
Wrapping Up
A mobile app should always start with a strong marketing plan since you should approach it like a business and handle it as such. Further, a mobile app will be one of many ways that e-commerce companies will sell goods and services. It is a channel, and you should consider this while deciding on an app monetisation plan.
Do you need to develop your apps? Check out our services to learn more about how VirtualSpirit can help in the growth of your business with the help of our expert software developers. Book a call now!
