A Complete Guide to Mobile App Monetisation
Published at February 16, 2023

Monetising mobile apps is essential for app developers' success in today's competitive market. As we head into 2023, developers closely monitor the latest monetisation trends, including various in-app purchases that can help increase revenue.

Like other technology sectors, the mobile application industry is multiplying. By 2023, the mobile app economy will be estimated to attain a value of $614 billion. Players in this industry create unique apps that make users' lives easier and more enjoyable. Mobile apps that make daily life easier are popular among users.

What is Mobile App Monetisation?

Monetisation is converting passive (non-revenue-generating) assets into a source of income. It converts any event or transaction into currency or something of value.

In mobile applications, monetisation is making money from mobile apps. Developers need to engage users to activate the process. They influence user behaviour and drive more purchases, ad views and other conversion models.

There are many mobile app monetisation strategies, and developers can choose them based on the type of app and model. The main revenue indicators come from the number of active users, transactions, and the time users have used the application. That user experience has a direct impact on earnings.

Why is Mobile App Monetisation Important?

Data.ai reports that over $320.000 flows through app stores every minute in 2021, and increased by almost 20% from the previous year. Additionally, users are downloading more than 435,000 apps per minute.

These numbers convey all the same messages. Monetisation is the best way to generate revenue through mobile apps. More than that, what are the benefits of mobile app monetisation?

Monetisation can also improve the user experience. In business, purchase value, amount, and retention rate are critical to a marketer's KPIs. When users continue to engage with an app even after making a payment, it serves as social proof of its value.

Plus, monetisation can help identify the right audience for the app. Users who pay for an app are less likely to uninstall it, indicating genuine interest.

Another long-term advantage is the potential to attract investors. A useful mobile app with a large user base and a reliable monetisation strategy becomes an attractive prospect for investors. To maximise revenue, analyse data to create a monetisation strategy that suits your users.

Challenges in monetising Mobile Apps

We all agree that mobile app monetisation takes work. When consumers click “buy”, they have high expectations. Plus, developers have to compete with millions of other apps for attention, time, and money. It comes with real challenges; here are some of them:

1. Some users dislike ads

Millennials and Gen Z are skilled at avoiding ads. People often close ads without even looking at them. if in-app ads become too bothersome, users may choose to stop using the app. Yet, high-quality and well-targeted ads can win over users.

2. Hard to retain users

Increasing user retention indicates that the mobile app is useful and addresses user concerns. Users prefer to deal with branded apps they trust. Therefore, today's applications must offer a unique and special side to stay alive.

3. High expectations from users

When users see the word “premium”, they expect something extra. Their expectations are exceptionally high when they have to pay, and the app has a prominent reputation. Therefore, developing premium features can be challenging for developers.

New Trends in Mobile App Monetisation

An article on the BBC revealed that the average person spends 4.8 hours daily on their phone. As the dependence on mobile phones increases, developers are looking for new ways to generate revenue from their applications. They're seeking the most effective strategies to monetise customer engagement with their apps.

Many ways to monetise mobile apps. Some use ads, but some are organic. Here are some ways to monetise mobile apps:

  1. Ads within an Application
  2. Freemium & Premium
  3. Free Trial 30 days/7 days
  4. Subscription
  5. Paid Transactions
  6. In-App Purchases & Virtual Goods
  7. Pay-to-Download Apps
  8. Affiliate Marketing & Lead Generation
  9. White Label Services
  10. Sponsorship

Mobile Apps Monetisation Best Practices

Monetisation is not a one-time activity but an ongoing process to maintain and optimise it. Users may provide input on specific aspects of the application.

What's more, each monetisation channel has its own set of challenges and opportunities. For example, in-app purchases have challenges in serving ads. However, there are some general methods you can use to optimise monetisation.

1. Use several Monetisation techniques / Hybrid Monetisation

In 2023, it's rare for developers to rely solely on one monetisation model. Using only one model can limit the application's strategy and may not be suitable in all cases. For instance, if you solely rely on In-App Advertising, what if users get bored with ads? What if the ad quality drops?

Therefore, it's best to use multiple models for mobile app monetisation. For example, you can combine the Freemium & Premium model with In-App Advertising, like Spotify, where users still get ads in the freemium model.

2. Focus on Mobile App Analytics

Data are facts. Companies use data to read trends, consumer behaviour and demographics. Without data, mobile apps may not survive in a competitive market. Focus on analytics, such as retention rate, ARPAU (Average Revenue Per User), and Funnel Conversion Rate.

3. Do app marketing beyond downloads

Today, most companies rely on app marketing to drive downloads. That is, they will only increase the number of downloads, not the revenue directly. Companies need to shift their focus from driving downloads to driving revenue. App marketing should go beyond increasing the number of downloads.

4. Optimise User Retention

Optimising user retention can increase monetisation opportunities. Developers can maintain retention rates by improving application performance, navigation, feature updates, and speed. High user retention also increases visibility across all relevant stores.

In Conclusion

Launching a successful app requires a well-thought-out strategy as the mobile app market constantly evolves. Monetisation is a long process that requires time, resources, maintenance, upgrades, and following user needs. Small changes to how users interact with the app can increase app revenue. While it may be challenging, monetising is worth the effort, and it can make all the difference once you're successful.

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