Ultimate Guide To Mobile App Monetization

There are numerous options available for monetizing mobile apps. In this article, we’ll study five common app monetization techniques and talk about how they could affect app growth and engagement.

How to implement monetization methods & please your clients and gain a market worthy- income? Our specialists are prepared to assist you in determining the best method of monetization for your application.

In-App Advertising:

The growth of mobile sales started to pick up speed after the Apple App Store opened in 2008, a period when online digital advertising as a monetization approach was already well-established. Due to the early adoption of app banner advertisements by app developers, it was necessary to scale down the size of the ads to match the limited screen space of mobile devices. At that time, banner ads evolved to offer a range of options specifically designed for the mobile environment, such as text, video, and native ads. In-app ad revenues are expected to nearly treble by 2025 and reach USD 226 Billion.

• Advantages: 
  • Better Results: Many individuals equate online banner advertisements with in-app advertising. Despite similarities, they take a distinct approach. In-app advertisements also perform better than banner ads.
  • More Specific Audience: With in-app adverts, your marketing is more successful if your viewer decides to download the app and if you promote relevant apps to a specific target population.

• Disadvantages: 
  • Reduced Engagement: Despite the captive audience, there might not be many clicks. These advertisements are not likely to generate a lot of engagement, as banners have an average CTR of 0.1%.
  • Promotions made by rivals: If one of your rivals appears in the in-app advertisement, viewers may click the link and download the app.

Freemium Subscriptions:

Following the free app download, customers are presented with in-app purchases that grant them access to premium features, extra material, or digital products. Spotify is the best instance of a freemium app subscription strategy. An alternative to iTunes’ pay-per-song business model and the widespread illicit downloading of music at the time was Spotify, a music app created in Sweden in 2006.

• Advantages: 
  • Scalable: One of the biggest benefits of this monetization strategy is that it enables startups to grow and build a user base without the high costs associated with conventional marketing and sales operations.
  • A trial before purchase: With freemium subscriptions, consumers may test out your app before choosing to buy it.
  • Wide User Base: You can get money from users who might otherwise not be willing to pay for your app by offering freemium subscriptions.

• Disadvantages: 
  • Limited Upsell: If consumers choose not to purchase the paid version of the app, revenue may decline.
  • Impacts on User Experience: If users experience a constant barrage of advertisements, they may grow annoyed with the app.
  • Careful Implementation: Users may find freemium subscriptions confusing, which causes them to cancel their subscriptions or stop using the service altogether.

Premium Subscriptions:

Premium mobile applications are subscription-based premium apps, however, to access all features, customers must sign up right away for a predetermined fee. It suggests that the number of downloads directly affects revenue. Paid apps have been found to have higher user engagement and customer retention rates. Disney+ and Tinder are two well-known services that use premium membership models.

• Advantages: 
  • Reliable: For app creators, app subscriptions provide a steady and predictable revenue stream.
  • Development Scope: Premium subscriptions can assist in financing and continuing the upkeep of the app.
  • Longevity: Premium subscriptions can aid in ensuring that an app’s users continue to find it helpful and accessible over time.

• Disadvantages: 
  • Expensive: Users may find premium subscriptions to be too expensive, especially if they don’t frequently use the app, which will result in a drop in user base.
  • Inflexible: Users may not be interested to benefit from exclusive deals or discounts due to the rigidity of premium memberships.
  • Turn Away: Before using the app frequently, users could find it difficult to determine value, which might be unsettling. Additionally, some expensive subscriptions might be challenging to cancel, leaving consumers feeling stranded or trapped.

In-App Purchase:

In-app purchases are another monetization method that is becoming more and more common in the digital environment, particularly in the gaming sector. Setting up payment for in-app purchases is also very simple. To pay for any in-app purchases or other app-related costs, users have the option to add a credit card when they register an account on the Google Play store or the iOS App Store. Unless your mobile app is sufficiently popular to be able to negotiate an alternative commission schedule, when a customer decides to make an in-app purchase, it is simply charged to their credit card, with app retailers getting a commission of typically 30%.

• Advantages: 
  • Effective: Applications that aren’t games now heavily rely on in-app purchases for income. After rewarded videos, in-app purchases are regarded by developers as the second most successful revenue strategy.
  • Convenient & Flexible: Because they enable users to make purchases without leaving the app, in-app purchases are well-liked by users. Developers can provide a range of services and content to users through in-app purchases, providing them with a versatile monetization strategy.

• Disadvantages: 
  • Alienate the users: Users may feel as though they are being treated like a small-scale, petty brand if they are frequently encouraged to make purchases. If the developer of the app is not careful with the types of transactions offered, the app may be branded as a “pay-to-win” app.
  • Harm brand name: A negative brand image could occur from users making in-app purchases and then being dissatisfied with the outcomes, which could lead to negative reviews and fewer downloads.

Affiliate Marketing:

There are affiliate programs available to app developers from several large technological corporations, such as Google, Apple, and Microsoft. These affiliate programs will promote other mobile applications within your app. Although the commissions given in this kind of app monetization are often not significant, the fact that app developers can choose which apps to market can persuade users to associate their app with related businesses.

• Advantages: 
  • Less Expensive: Via affiliate marketing, an app can generate revenue without requiring users to pay for downloads or in-app purchases.
  • Aids in brand building: Within an app, affiliate marketing can be utilized to advertise and sell goods and services.

• Disadvantages: 
  • Competition: Affiliate marketing can be quite competitive as companies vie for affiliates who can successfully promote their apps.
  • Time-Taking: Since affiliates must be continuously hired and managed, affiliate marketing can be time-consuming.

Now that you know why mobile app development is important, we are a call away. Our ad technology is clever and strategic, yet easy to use so that you can get the most out of your advertising budget. We use a variety of ad formats specifically tailored to the requirements of our clients to monetize apps. Since its inception, Black Widow Tech has used cutting-edge programmatic advertising technology in conjunction with unbiased and moral guidance to assist our clients in realizing an average 50% increase in ad revenue.

To find out more about how Black Widow Tech can increase your ad revenue and expand your business, get in touch with us right away!