How to Monetize Your Mobile App: A Guide for Entrepreneurs

Mobile App Monetization and Other Stats

Let’s take a look at some of the most important statistics related to mobile application monetization:

• More than 51% of Mobile app developers, marketers, and publishers find full-screen video ads the most effective way for customer acquisition.
• The annual mobile app downloads reached 255 billion in 2022.
• $167 billion is the global consumer spending on apps in 2022.
• More than 21% of millennials open apps at least 50 times a day.
• The revenue from subscription-based apps is increasing, especially for entertainment and mobile streaming apps.

Mobile Application Monetization Strategies

A business has several app monetization strategies available that it can use. Each has its own set of perks and issues. Before implementing a monetization strategy, it is important to thoroughly understand them.

Consequently, in this section, we will explain the various ways to monetize an app starting with affiliate marketing so that you can decide the best one(s) for your mobile application.

1. Affiliate Marketing

This is a simple mobile app monetization strategy in which you recommend products and services offered by third parties to your audience. Affiliate marketing is the leading way in which blogging websites generate revenue.

You can sign up as an affiliate partner for a business and then promote its products and services on your mobile app. Affiliate marketing is subtle, thus making it easy to integrate with other app monetization strategies.

The affiliate programs that you need to apply for depend on the type of your application. Sign up for a suitable affiliate program and promote products and services that your users find relevant.

Advantages – Subtle, pairs well with other app monetization strategies, passively increases your app’s revenue generation ability.

Disadvantages – Ad fatigue, quality control.

2. Advertisement

Serving different forms of advertisements on their platform is a common way for businesses to make money via their mobile apps.

Most mobile applications following the free app monetization model leverages ads to generate revenue. Serving in-app ads is how free apps make money, most of them.

Today, there are a variety of ad networks available to choose from. For example, Google AdSense, InMobi, and AdMob. Among the various forms of mobile advertisement models, this trio is the most popular:

• CPA (Cost per action) – The app earns a certain amount of money when the user clicks on an advertisement and performs an action. It is not usually implemented as it is very difficult to drive the user to a particular action, especially if it doesn’t bring any value with it.
• CPC (Cost per click) – It is a very common ad revenue model. CPC generates a fixed amount of revenue every time a user clicks on an ad. This amount is determined by the ad network and the brand of the product or service being advertised.
• eCPM (Effective cost per mile) – It is one of the most popular advertisement models for mobile applications. In eCPM, the mobile application earns a particular amount of money for every 1000 impressions.

Choosing the right ad network is important for businesses, especially when it is the only monetization strategy available to them.

Advantages – Most common way of monetization, excellent for free apps.

Disadvantages – Ad fatigue, requires extensive research.

3. In-App Purchases

Almost all mainstream ecommerce and mobile gaming apps leverage the in-app purchase monetization strategy.

Compared to paid apps, in-app purchase is a more reliable monetization strategy as the user has already used the app and has made up their mind on whether to continue using the app or not.

Before implementing this app monetization strategy though, know that driving in-app purchases necessitates a great deal of effort in both mobile application development and marketing.

Developers must make the in-app purchase system easy to understand and use. Marketers, on the other hand, need to use funnels for bringing application users near to buy a product or service.

Advantages – Reliable monetization model, requires less convincing, among the most popular ways to monetize a mobile app.

Disadvantages – Requires more effort in terms of development and marketing.

4. Paid Apps

Most apps are free to use, whether it is App Store (92%) or Play Store (96%). Nonetheless, the market for paid apps is growing as people are now becoming accustomed to paying money for using a mobile app.

This is because users now see mobile apps as long-term assets that help them with various personal and professional endeavors.

Implementing the paid app model is one of the easiest mobile app monetization models. You need to just decide the price that the user has to pay for downloading the app. However, the real challenge is to actually make users pay for the app.

iOS users are more likely to adopt the paid app model than Android. Therefore, it’s advised to think about alternative monetization ways if you’re to implement the paid app strategy for your Android app.

Advantages – Easy to implement, ensures direct revenue, decreases the hassle of monetizing through in-app purchases.

Disadvantages – Not lucrative for Android users, requires a robust customer support system.

5. Subscriptions

Subscriptions serve as a consistent source of revenue generation for mobile app businesses. Comparatively, paid apps only generate a single revenue opportunity.

The emergence of OTT platforms is a perfect example of the rising popularity of the app subscription model. Domain and web hosting services also follow the subscription model, for instance.

The mantra behind a successful subscription model is continuous change and improvement. You need to have a skilled team that continuously brings new stuff to your app’s offerings list.

Advantages – Consistent source of revenue, excellent to grow your ARR.

Disadvantages – Requires continuous updates, adds subscriber churn.

4 Mobile App Monetization Best Practices

Congratulations! You have successfully optimized your app for generating revenue. It doesn’t end there, however. In the long run, you need to optimize your earnings.

Each app monetization strategy has its own way of approaching revenue generation. Consequently, each one has its merits and limitations. So, how do you ensure optimal revenue generation from your mobile app?

Well, there are certain mobile app monetization best practices that you can follow to ensure that you maximize your earnings all the while tackling the issues that the ever-evolving user requirements throw at you.

Following are three of the most tried-and-tested mobile app monetization best practices that you can follow to optimize monetizing your mobile app:

1.Focus On User Retention

The more users are coming back to your app, the more chances are there for you to increase your earnings. This simply means you should optimize your user retention rate.

Although there are a great number of strategies that businesses can put in place to ensure a steady user retention rate, a range of factors determine their effectiveness. These are:

• App performance
• App speed
• Navigational factors
• User engagement
• User experience

Many returning users create several opportunities to monetize your app. Irrespective of whether your app features in-app ads or in-app purchases or both, a good number of returning users guarantees more revenue generation for your business.

2.Drill Down Through Mobile App Analytics

Analytics plays an important role in generating revenue from mobile apps. A business has to focus on mobile app analytics. There are several tools available for doing so.

The market competition is high and there is no option for a business to sway away from mobile app analytics. Not every mobile app business, obviously, has the necessary resources to hire a data analyst. So how to do it? The answer is the best mobile analytics tools.

With the right mobile app analytics tools by your side, you can make sense of everything happening with your mobile app. Using data analytics is a sure-shot way to optimize earnings.

3.Use More Than One Mobile App Monetization Techniques

You might have used mobile apps that use a slew of monetization techniques. Sticking only to one mobile application monetization model is a common pitfall that many new businesses fall into. This puts them at the risk of running out of revenue generation opportunities.

Having more than one app monetization strategy reduces your chances of failure as you have several options to bank upon if one or many fail for some reason.

4.Consult an Experienced Mobile App Development Company

Asking an expert about something that you aren’t sure about is a great option. Similarly, you can hire an experienced mobile app development company to know the best ways to monetize your app.

An expert mobile application development company like Apptunix has experience not only in building mobile apps but also in doing mobile app marketing. Therefore, it can provide sound and actionable advice on how to optimize your app’s monetization strategies.

Conclusion

Monetizing mobile apps is crucial for any business looking to profit from one or more mobile applications. You need to analyze your audience to know their preferences and then serve them accordingly.

You can run A/B testing campaigns to know which monetization models and strategies work best for your mobile app. Hiring a data analyst to help you with analytics is a great way to understand the needs and preferences of your users.