6 App Monetization Options

6 App Monetization Options

Donuts are great. But, when it comes to choosing what donuts to have, it can be pretty difficult to commit to just one. It helps to remember that they are all basically the same, fried dough filled or topped with different forms of sugar.

That’s how I see app monetization models; they’re all slightly different, but all have their place. However, unlike donuts, they are not universally loved and it’s important for you to know the best ones to choose. The good news is that you don’t have to commit to just one.

To help, we’ve created a list of the most commonly used monetization models and the pros/cons of each. What does this have to do with donuts? Not much, but there’s always an excuse for donuts…enjoy the post.

The Rundown

Premium

The “pay to play” model; users need to pay before downloading the app. To be successful, the app MUST have a unique value proposition. Otherwise, users won’t pay for the app when there are free options.

But, it doesn’t stop there. The most profitable premium apps do a stellar job of selling their app’s unique value proposition through effective positioning. An app that is doing both things right is Calendars 5.

This alternative to Apple’s default calendar costs $6.99 (at time of writing) in the Apple store. It’s a “smart calendar” that incorporates tasks, human language, and reminders in an attractive interface. The listing page has rich screenshots, feature-focused sales copy, and user reviews that speak to its superior functionality (see Social Proof). Execution…Perfect.

Pros:

  • Immediate monetization for app publishers and app marketers
  • User engagement is more likely when users pay
  • Doesn’t require in-app advertising: Results in a cleaner app interface
  • Developers are free to focus on refining and improving the app

Cons:

  • App stores are extremely overcrowded: Positioning your app is difficult
  • App stores take a cut of the revenue (Apple gets approximately 30%)
  • It’s been estimated that 90% of paid apps are downloaded less than 500 times per day (cost limits user downloads)

Subscription/Paywalls

A compromise between premium and freemium, this model is widely used by news outlets. The user downloads the app and is provided a free, but limited account. Often, the user is given curated examples and previews of full content that can be bought individually or through subscription with auto-renewal. The Economist does this exceptionally well.

The majority of their content is behind a “paywall”. While free articles are provided, they are limited to what an editor selects. Through them, the user gets a glimpse of what the Economist offers. The articles are provided to encourage the user to opt for the freedom that a full subscription provides.

Pros:

  • Users get a taste of the full experience before spending their hard-earned money
  • Auto-renewals have the longest life: An old fact from print publishing days
  • An excellent opportunity to analyze content for triggers that will get users to pay

Cons:

  • Difficult to find the right pricing model
  • Does not translate to all verticals
  • If the content is multi-platform, it is difficult to follow the same pricing logic

Freemium

On the other end of the spectrum from the premium model, the app is free, but there are features or additional functionality that can be paid for. Sometimes, the user can “test” a feature or functionality at a point where it enhances their experience. Once finished, the user will be offered the feature for a fee.

Rovio’s Angry Birds is probably the most widely known example of a freemium mobile app. As user progresses through the game, they can test “power-ups” that help them with specific challenges. After experiencing this, the users are more than happy to pay for the “power-ups” that are now behind a paywall.

Pros:

  • Quickly build a large user base
  • Allowing users to “test” features encourages engagement (see Reciprocity Rule)
  • The model is super-flexible and can be used in almost any vertical

Cons:

  • Offer too few features and users won’t be engaged, thus unwilling to pay for the rest
  • Offer too many features and it will be a challenge to convince them to upgrade
  • If the free app experience is poor, users will be turned-off

In-App Purchase

An extension of the freemium model, an eCommerce feature is added to your app that can be everything from diamonds needed to reach a level sooner to physical items that are actually shipped to the user’s door. Physical or virtual, the important point is that the goods are natural to the app experience.

Candy Crush Saga has mastered the art of in-app purchases. Initially, every player has five lives. Once the player loses all five lives, a 30-minute “time-out” is imposed before they get a new life. Luckily for users, they can easily buy a set of new lives for 99 cents. Candy Crush’s daily revenue is around $680 million (at the moment of this post). Yes. DAILY.

Pros:

  • Profit margins are high for virtual goods
  • Works very well for games and eCommerce
  • It is easy to upgrade users from buying small goods to more expensive ones

Cons:

  • App stores are asking for a share of the revenue of sold virtual goods
  • Apps are being asked for greater transparency and are facing legal restrictions to prevent children from making accidental purchases

Sponsorships/placements (incentivized advertising)

The least practised of the monetization models within the list, the product placement model requires product/app compatibility, tons of development time, and true partnership and trust between the advertiser and publisher.

If you’ve watched a James Bond movie recently, you’ve seen product placement at work. An advertiser wants to push a product, finds an app where it fits, makes a deal with the publisher, and the product is incorporated as a natural part of the user experience.

GymPact is a prime example. It rewards its users for goal completion, such as when a user completes a 30-minute run and is offered a relevant, sponsored reward.

Pros:

  • The sky’s the limit for different ad solutions
  • High engagement potential from your user
  • Done well, it can contribute to good user experience and positive word-of-mouth

Cons:

  • Developers are needed to customize the app for every campaign
  • Often involves revenue sharing: 100% trust between the two parties essential

In-App Advertising

According to a recent report, 70% of users won’t even pay $1 a year to avoid ads in apps. This is why in-app advertising is so widely used. It is an easy way to earn initial ROI. The primary goal is to grow your userbase and gather user information that you could sell to an ad network or app publisher, who will monetize your users.

Pros:

  • Data rich, enabling hyper-detailed targeting for advertisers
  • Ad partners will provide advertisers, allowing you to focus on other things
  • People love free apps, your audience will grow quickly

Cons:

  • Ads can damage the user experience because of intrusiveness or irrelevance
  • If the app is very niche or your partner ad network too small, demand can be hard to find

The Takeaway

 

Successful app publishers, and publishers in general, never rely on one monetization strategy. In fact, you’ve probably experienced apps that will use two or three of the models we described in tandem. The most important factor (one that we stress in almost every post) is to keep the user experience in mind when evaluating monetization strategies and choose accordingly. After all, how long do you continue using an app that makes you feel like it’s nickel-and-diming you at every turn?


With such a large network, there are bound to be a few great insights out there. Don’t keep them a secret! Add to the discussion and comment below!

Kyle Buzzell

Kyle Buzzell

Content Manager

Psychology, sales and now marketing…Kyle uses his background and love of writing to create informative, engaging content for Adcash.

How To Make Money With A Mobile App

How To Make Money With A Mobile App

So, you’re a developer. You know how to build mobile applications for different devices and platforms. You understand the importance of user experience and the pivotal role it plays in the success of your app. But, how do you get your investment to pay off? How can you actually make money with a mobile app?

The first thing you should probably understand is this: most apps, frankly, fail. Less than 1% of apps go on to become “financially successful”. But that, of course doesn’t mean that you shouldn’t try. To try and prevent your app from being consigned to the bottom of the pile, there’s some things you need to consider before you start building it.

Pick a platform

Make Money With A Mobile App – Step 1

Adcash In-App Monetization - Make Money With A Mobile App - Who Earns The Most?

Source: http://www.developereconomics.com/how-to-make-money-with-apps/

The numbers show that, for the time being at least, iOS leads Android for revenue potential. While Blackberry and Windows Phone are trailing far behind, despite Microsoft offering incentives for developers to build apps for their platform. Although it’s tempting to jump to the conclusion that, because iOS is so far ahead of Android in terms of app revenue, there are still other things to consider.
Firstly, there are lots of indications that this revenue gap, between iOS and Android, is beginning to close. Secondly, the app development (or, specifically, review) process for iOS is notoriously long-winded and restrictive. For example, you can submit an app for approval, wait a few weeks, then just get a “No”. No feedback, no pointers, nothing. Meaning you have to go back and figure out what needs fixing yourself. This takes time and time, as the saying goes, is money.

Choose a category

Make Money With A Mobile App – Step 2

Adcash In-App Monetization - Make Money With A Mobile App - Who Earns The Most?

Source: http://www.developereconomics.com/how-to-make-money-with-apps/

So, you think you’ve settled on your choice of platform, now it’s time to take a look at what app categories, typically, have the best revenue. It shouldn’t come as a massive shock that the list is headed up by Enterprise and Productivity Apps. Enterprise apps, for example, are backed up by huge, globally recognised brands trying to capitalise on the mobile market, giving their customers an extra touchpoint. Rather than monetizing through ads, they’ll monetize through in-app transactions.

What is surprising though is just how high up the list Other categories appear, meaning, applications that fall into small, niche categories that are sometimes hard to define. This likely because, in all of the many, many small categories that fall under Other it’s much easier to stand out and make an impact.

Perhaps another surprising observation is just how low Games appear in the list, with only 17% of apps making the grade. This is likely because of the sheer number of games and their popularity with hobbyists, dragging down the numbers. With mobile games, it can be very hard to stand out from the crowd, unless you have impeccable timing or can leverage the power of social media (and other channels) to make your app a viral hit.

Find a format

Make Money With A Mobile App – Step 3

As mentioned at the beginning of the post, user experience is a vitally important part of making sure your app is a success. When monetising your application with in-app advertisements, you need to ensure that those ads don’t harm your users’ experience, that way they’ll keep using it and keep bringing in revenue for you.

Footer

Adcash Ad Formats - Mobile Footer - Make Money With A Mobile App

In-App footer ads offer a great way of monetising your app, without intruding on the overall user experience. The ad itself sits at the bottom of the screen, out of the way of the main UI elements. Keep in mind when designing your app, if you plan to use this format, that you make sure the ad sits away from the main menu elements.

Interstitial

Interstitial in-app advertisements offer another really great of monetizing your app. It gives you all the screen real-estate you need in the app itself to let your design and development really shine, without having to accommodate banners. You can, for example, use loading screens to serve interstitial ads, meaning that the ad is being served naturally, with the intended “flow” of user experience.

Adcash Ad Formats - Mobile Interstitial - Make Money With A Mobile App

Video

Video is an incredibly powerful new frontier for mobile app monetization. It’s already creating a lot of buzz and there are many predictions being made about ad spend shifting towards mobile video. In-App Video behaves in a similar way to the interstitial format but using a video, rather than being a static image. Again, it doesn’t interfere with the user experience and, with relevant, targeted ads, it can actually enhance it.

Adcash Ad Formats - Mobile Video - Make Money With A Mobile App

Now, the only thing left is to choose your app monetization partner!

Mobile Advertising – The Adcash Plan

Mobile Advertising – The Adcash Plan

Smart devices are becoming ever more affordable. There’s been talk for years of the world becoming “mobile” but we’re very close to that being a reality. Now, mobile devices outnumber people and more people are choosing mobile over PC as their daily driver. The trend is clear: everything points to mobile. As the Mobile Product Manager here at Adcash, it is my responsibility to find and act on these new trends.

Since starting in April 2015, my goal has been to give mobile advertising the attention it deserves, because our phones are the most intimate devices we use. I want to make sure that what we offer reflects that. The mobile advertising world is ever-changing, so keeping ahead of that is a challenge. With this in mind, let’s take a look at what we’re doing.

Mobilizing our team

Right now, a major focus of our global team is on growing our mobile business. That is why we have sales, support and developer staff spread throughout Europe: Bulgaria, Spain and of course, Estonia.

The winning formats

Right now, Adcash offers a complete menu of mobile web and in-app ad formats: in-app alone has Footer, Interstitial, Video, AppInstall, Native and Rewarded Video formats. 

The tools for the job

If you’re an app developer looking to monetize your app, we’ve developed some handy SDKs and plugins. We have an SDK for Android and two for iOS (written in Objective-C and Swift). In addition to that, we have app development plugins available for some of the most popular platforms, including: Xamarin, Unity, Cocos2d-x, Phonegap and Adobe Air.

All of these things are designed to make life easier for app developers to make money from their apps with Adcash. And speaking of making things simpler for developers…

Here to help

Mobile developers have two avenues of support: our developer portal with all the materials for our SDK and framework plugins, and direct developer support for those who get stuck or have questions. This premium-level support is provided to you free-of-charge. To qualify, you just need to be interested in monetizing an app with Adcash using one of our SDKs.

Adcash, on the go

It’s a mobile world and you need to be able to access your information on the go. Our mobile app for iOS and Android puts all the functionality of the Adcash.com page into a simple, mobile-friendly environment.

We have lots more in-store, but for now I’d like to keep some things under wraps. The growth of mobile advertising is something we at Adcash embrace and are looking forward to.

Giving mobile advertisers the chance to reach and target mobile audiences globally and publishers the simplest, most effective platform to make money from their apps.

We’re really proud of our growing list of mobile advertising partners, including Amazon, Uber, Lyft and AliExpress, to name a few, and we’d love to add you to that list.

Mobile advertising is the future, and we can’t wait!

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