app monetization It is estimated that a person can invest up to 20 hours per week of their time in apps. In this sense, having a successful
mobile application is a challenge.
However, even for the newest app, growing in this broad sector in terms of success is possible, even monetarily speaking. If you want to find out how to do it, here we show you how to get the most out of app monetization without failing.
What to keep in mind for app monetization?
Target and audience
Before choosing a model to make our app profitable, we have to ask ourselves two questions: What is the true objective of our app? And what audience is it aimed at? Depending on the characteristics of the service or product to be offered, our value proposition and its differentiation from the competition, we can choose one strategy or another. And, above all, taking into account the real costs so that the equation is well raised from the beginning: developing a quality app, in addition to the cost of development and launch, involves maintenance so that it is updated at the level of programming, content and in addition, both Google and Apple keep a 30% commission on transactions.
Business models
An app is a living element, it is not to publish it and that’s it; It is very important to develop a business plan that includes a thorough scalability and maintenance cost analysis. For this reason, on paper models that foresee a certain recurrence of income are preferable than those that are limited to an income per app download, also when it is a highly successful application (even more so in that case). To explain it with an example: an app costs $ 30,000 to develop and has a maintenance cost of $ 2,000 /month; If it is sold at $ 1 and 100,000 users are obtained, it may seem that a good deal has been done ($ 70,000 gross profit compared to the initial investment), but if it downloads then stagnate, in just 35 months will start to generate losses. It would not be the first time it happens.
Finally, a general premise: there is 10 more probabilities that an app will be downloaded in the first days if it is free than paid, which is vital in its positioning and its visibility in the rankings. It is not easy to create a successful app, much less one that stays on top, but the good thing is that it is a recipe that is beginning to boil right now, so there are as many ways to cook it as we can imagine. Here are some ideas:
- Freemium: free app with sections or paid functions. It is one of the fastest growing models, at a rate of 50%, and developed by more than a quarter of developers around the world. It is used in many internet services and products, with the philosophy of putting honey on the lips: the app can be downloaded for free but some of its contents, functions or updates are paid. It can also take the form of a free previous app (maybe with advertising), a lure that works as a demo to make the product visible to which a paid one happens with more content or without advertising.
Another option is the free trial app, that is, the launch of a free version of the app for a limited time to get, after that time, downloads of the paid version. The strategy consists of offering a quality service to which the user gets used to – later or in parallel – offering a premium option at a reasonable price, so that they really know what they are paying for and even see it favourably. It must be taken into account that in the app world, precisely because of the large volumes of offers, the user always looks for a free alternative to a payment tool, so it is key not to block the entrance door.
- Affiliate marketing: Your app is offered as a showcase for other companies to sell their products and you charge a percentage of the sale. It is simply a matter of applying the affiliation model already extended in web portals, such as flight search engines, to the territory of applications for mobiles and tablets. It can also be found in the form of a guide or directory, in a specific section of the app in which the services or companies pay a fee to appear, fixed or variable depending on the visits. The key is that the contents of the app and the brands are aligned so that they share the target audience.
- Banner with advertising: Also known as In-App Advertising, this technique is applied mostly in free download mobile applications. The income obtained with this formula comes from companies that hire the advertising spaces linked to external apps or websites, the banners offered by the application.
In this sense, it is possible to carry out different monetization strategies following this strategy. You can get money for the number of impacts, clicks made or for the period of time of the advertising banners.
- In-App Purchases: It consists of transferring the traditional electronic commerce that we already know from the internet to the interior of an application. This technique, also known as IAP (in-app-purchase), allows you to purchase certain products or services within the downloaded app for free. Follow the same formula as downloading a paid app with the Apple ID for iOS or the Google account for Android and the corresponding password. Both platforms are left with a commission of 30%. This formula is the one that currently generates the most average income per app.
Free sponsored app (sponsorship)
The application that you have devised (or is already running) is perfect for a brand or a certain advertising campaign, either because of its functionality or because it targets a very specific audience that matches its target. That brand may agree to finance its development to flag its launch exclusively or it may be interested in a full sponsorship, making the app yours. We would be talking, then, of an application created practically ad hoc thinking of a brand or with such a good and specific positioning that only needed to be tied. A sponsorship of these characteristics, obviously, could even condition the name and image of the app and, in addition, it would probably close the doors to other sources of income. - Subscription: This technique can work in 2 ways: one-off (one payment) or continuous (recurring payments). An example of the latter could be requesting payments from users from time to time to opt for constant updates.
- Big data: An app can obtain a lot of data from its users, from their behavior with the app itself to other data such as location, age, gender or preferences. Being free, an application can access the information that the user provides without invading their privacy and within the legal terms. This information can end up being really useful for the company to know its audience and offer a more personalized service. This last detail is key to obtain more figures in mass as well as monetary income.
- Payment app: It is the conventional business model, of a lifetime: I sell a product or service in the form of an app and charge directly for it. As we explained above, Apple and Google stores will apply their sales commission and periodically pay us our share of the download revenue. Taking into account the growing supply of apps, this model is only recommended when you have a perfectly consolidated brand or service, since as we have pointed out previously, as a general rule, the chances that someone is willing to pay for an app are low. In addition, as we have already explained, it is key to take into account maintenance costs and scalability.
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