Top 10 Mobile App Monetization Trends

Have you only started developing an application or already have complete product at hand? It does not matter at which stage you are. Now is the right time to learn how your project can make profit right from the beginning using different ways of mobile app monetization. Both small and medium businesses resort to iOS and Android app monetization in order to make product that works and is profitable.

Top 10 Mobile App Monetization Trends for 2020

In this post, OpenGeeksLab will disclose top ten mobile monetization trends that propel your project to the next level.

Mobile App Monetization Trends You Should Consider

1. Ads within an Application

Since users tend to choose free apps, in-app advertising has become one of the fastest and most profitable monetization strategies.

Advertising is one of the most popular app monetization models. While many brands were initially skeptical of mobile adtech, now they are increasingly jumping to this mobile app monetization strategy. Today, 51% of total ad investments go to mobile; this figure will only increase. As of advertising spending worldwide, it will triple in five years: from 72 billion U.S. dollars in 2016 to 240 billion U.S. dollars in 2022.

Ads within an application have a lot of advantages, but the most important one is its versatility. Current revenue strategy implies cooperation with other brands from different spheres. They rent space in your application to show users in-app advertisement. Meanwhile, you receive income from provided services even if your project is free.

Advertisement includes mobile native ads that are integrated into a platform where they are published. These ads merge with main content and are usually relevant to the customer’s demands. Mobile banner ads are often submitted in a form of an image. Their main goal is to land the prospective customers to click on a banner and re-route them from the host application to the advertiser’s platform.

Apps publishers opt for rewarded video as one of the most efficient in-app advertising formats. Other promising in-app ad formats are classic banner ad, medium rectangle, interstitial, native advertising, pre-roll format, outstream video.

An additional point is that ads introduce high-level targeting options. It helps show certain advertisements to the audience that is interested in your product most of all. This moment is especially important in current mobile app monetization strategy, since ads may become annoying and disruptive for many users if they are chosen heedlessly.

Present app revenue strategy is successfully used by Instagram. It is free, but has advertisement in form of photos or videos which appear in a news feed. In most cases, ads in Instagram perfectly fit its form in such a manner that users do not feel any intervention in their lives. In fact, they offer users the variety of goods they are looking for and help find one right thing.

2. Freemium & Premium

Freemium model allows you to introduce the premium version advantages to the free users and turn them into paid ones.

As of 2019, freemium was among dominating mobile app monetization models along with subscription and advertising methods. App monetization platform with a built-in freemium model came in second place covering 54% usage rate amongst apps publishers and a 33% monetization rate.

Freemium is a way of mobile app monetization where user experience and your personal interest are perfectly balanced. Main idea of current approach consists in its name. Users can download your mobile application free of charge, although they use it with some restrictions. Your task here is to show clients the best features available in premium version and persuade them to buy it. If customers enjoy using your product, they will be ready to buy its premium version in order to receive all provided benefits.

One of commonly used premium apps that has freemium version is YouTube Music. It is easy to download and use it free of charge, although it has ads and stops working as soon as you open other page or the screen of your phone is locked. Meanwhile, premium version of YouTube Music has advantages which allow users to listen to music without ads, in the background and offline, what is critical to the majority of people. Other notable adopters of freemium are Evernote, a note-taking app, Join.Me, a tool for audio, video, web conferencing, Dropbox, a file hosting software, Spotify, a music streaming service, Zapier, an online automation and integration service.

3. Subscription

Subscription provides users an access to some useful content or services for a recurrent fee.

Subscription is amongst prevailing mobile app monetization models for current software. As of 2017, apps with subscription-based strategy boosted the App Store revenues amounting to 10.6 billion U.S. dollars. Subscription mobile app monetization strategy, together with other schemes, is expected to bring the App Store $75.7 billion by 2022. Google Play revenue, in turn, climbed 7.7 billion U.S. dollars last year, up 24% from previously 6.2 billion U.S. dollars.

Paid subscription strategy involves periodic purchase of some information content: from books and films to statistics and personal data that may help vendors to better understand customers’ needs. Usually, subscription allows clients to use services one month through one year at a certain charge. It may become a challenge to promptly convince perspective customers of advantages and values of your product. Hence, paid subscription works better when users have possibility to test it before purchasing. Some projects provide temporary free subscription to show its customers all advantages they have. After this period it may be extremely difficult to refuse from all benefits the product has.

As an example, Netflix operates as paid subscription service company, which affords movies, series, TV episodes, as well as original content in a high quality. Although it has subscription as monetization model, Netflix also provides 30 days trial period to get a better understanding of the services they provide. When trial period ends, customers pay one month subscription price that starts with €7.99.

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4. Free Trial

Free trial allows users take a look at the application and makes them become accustomed to its benefits.

You can also monetize your mobile project using free trial mobile app monetization strategy. Here you provide customers with a possibility of using premium version of your product free of charge during some time period. People understand that neither advertisement nor positive reviews can be competitive with personal experience. In most cases, trial period in free trial apps lasts 30 days.

Free trials are mostly utilized for mobile app monetization in music/video streaming, education, fitness apps. Apple Music is one of those apps that have free trials. Today it offers three months trial period to explore and enjoy all advantages of the product. Another promising example is Showtime app monetization platform that has 30-day free trial, then consumers are charged $10.99 per month. Skillshare, in turn, offers educators 14 days of unlimited classes for free. Daily Burn encourages newcomers with free 30-day access to more than 1K workouts such as cardio, yoga, dance, pilates, and many more.

5. Paid Transactions

Getting a part of every payment completed on the platform, commission charging becomes one of the most lucrative revenue models.

Payment transaction mobile app monetization system is one more type of mobile app monetization models. In this case, your project serves as mediator between two parts: vendor and buyer. In other words, it becomes a place where vendors and customers meet. While one side needs some goods and services, other part provides them. Meantime, you transact payments and charge commission for provided services. It can be paid by vendor, by buyer or by both.

For instance, Airbnb app monetization platform is a mediator between people who want to rent out their apartments and people who need accommodation in one particular region. Its payment system allows convenient, flexible and secure process of transactions for both hosts and guests. Normally, guests pay a guest service fee for services they receive. However, apart from transactions Airbnb also protects rights of both sides in case they have any problems during cooperation.

PayPal charges a fee per each transaction, except for personal transactions between PayPal accounts. It can be either a fixed amount or a percentage. TaskRabbit is an online mediator that connects freelance labor with local demand, including cleaning, moving, delivery, handyman work, charging fees for services. Fiverr freelance service marketplace is gathering a certain percentage from each in-app transaction.

6. Pay-to-Download Apps

Using pay-to-download strategy, remember that customers usually have high expectations for the paid apps.

One of the oldest but still lucrative app monetization models is paid downloads. With this mobile app monetization strategy users pay only once for download and immediately receive full functionality of your product. Here it is important to clearly demonstrate to the prospective buyer purposes and values of your app.

Nowadays, free projects have congested world market. As of June 2020, 91.9 percent of apps were freely available in the App Store and there was 96.4 percent of free apps in Google Play. This is the reason why customers are often not ready to buy an application they have not tried yet, especially if they can find free alternatives. Apart from similar free options, other paid downloads with the same features should also be taken into account.

If you choose current app revenue strategy, your task is to show clients why your product is special and essential. Next you ought to thoroughly investigate the situation on market. It is important to compare free and paid offers which are available in the store in order to find the right initial price of your product. Current mobile app monetization strategy will work best if golden mean between customer’s willingness to pay and your revenue is kept.

Monument Valley 1, as well as Monument Valley 2, is a pay-to-download indie puzzle game that was developed by Ustwo Games. In the Play Store it is described as “impossibly beautiful mobile adventure”. This game has won an Apple Design Award and was named Apple’s best iPad game of 2014. Both versions are easily installed on your mobile phone or tablet at a charge of four-six dollars each. Up to date, game has sold over 26 million copies again demonstrating that paid projects can turn a profit if performed correctly.

7. In-App Purchases & Virtual Goods

In-app purchases allow users to buy virtual goods within the app in order to variegate the process of playing.

In case your project is free, you still can receive revenue using in-app purchases and virtual goods. This is one of the most successful strategies for in-app monetization, used in mobile games and different kinds of entertainment services. On a massive scale, revenue from the mobile gaming industry brought in over 64.4 billion U.S. dollars as of 2019. This figure makes it an immensely attractive app monetization platform among current mobile app monetization models.

Main principle of this mobile app monetization strategy is following: your project remains free, but it offers additional features users can buy for real money. Customers have possibility to purchase additional lives, advanced features, extra content or in-game currency in games they like. This strategy is also popular on dating and online trading platforms, social networks, online resources for studying etc.

There are several kinds of in-app purchases: subscription, consumable and non-consumable purchases. In-app purchase subscription gives access to content and services which are provided during subscription period. When it ends, you can purchase subscription for another period of time. Consumable type covers features like extra health or game currency. Here users buy items every time they need them. They also have no possibility to download them again without paying. Non-consumable purchases allow using once bought items and features on different devices without losing them. Customers need to use their ID in order to obtain access to the features over and over again.

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Apple TV app monetization platform offers its clients to buy or rent films and music from iTunes Store, as well as download podcasts and photos from MobileMe or Flickr. Apple TV in-app purchases allow you to have immediate access to all necessary services not only in your smartphone, but also on a big screen. When done well, in-app purchases and virtual goods can bring users satisfaction introducing something new and exceptional.

8. White Label Services

Strong code and positive feedbacks are key pillars in white labeling.

Another popular way to gain revenue on your project is developing of white label mobile app. It represents a product or service created by one company and rebranded by other. This mobile app monetization approach is prevalently used in mass production of consumer goods, appliances, and application development.

White labeling will bring in a good return if your company develops a strong code that works and has positive user experience. This may become a distinct advantage for many brands since white label application helps cut costs required to develop new code from the scratch. You as an owner of successfully operated product can resell your code. As a result, app data monetization allows other brands to use code as basis for developing their personal project.

White label mobile app platform Minsh, based in Switzerland, is a private messenger provider. It allows clients to create a messenger that perfectly meets their requirements and has all necessary functionality according to personal demands.

9. Affiliate Marketing & Lead Generation

Affiliate marketing & lead generation turn the focus on searching for targeted audience.

Affiliate marketing strategy is a method of promoting business based either on cost-per-action or revenue sharing models. Using first model, affiliates have rewards for each visitor, subscriber or for sales, carried out thanks to affiliate company efforts. Working with revenue sharing strategy, partners get profit in a form of percentage from other company earnings. Key idea consists in promotion of affiliate products, brands or services through marketing with the aid of your project.

81 percent of brands and 84 percent of publishers have already utilized this mobile app monetization strategy. Most apps publishers opt for affiliate marketing schemes as a form of passive income. They find the ease of generating affiliate marketing income the most significant advantage behind this mobile app monetization method. Today, approximately 23% of total brands’ revenues come from affiliate marketing, putting it on the same level as SEO and PPC marketing.

Amazon Associates is an affiliate marketing program that allows monetizing mobile apps. You can advertise any of Amazon wares simply by placing its link. If users follow the link and make a purchase, you receive an award.

Lead generation is marketing tactic the main aim of which is to find potential customers using specific contact details. In most cases, lead generation is implemented when there is strict target audience. In order to find perspective customer information about gender, age, professional activity, as well as search inquiries can be useful. According to analysis, Facebook is the most popular place for lead generation (82%), followed by LinkedIn (48%) and Instagram (43%).

10. Sponsorship

Find projects you share similarities with and gain revenue through collaboration.

If you monetize your project using advertisement, do it with purpose, consider sponsorship model. Current revenue strategy is based on partnership with other brands. In order to implement this model you need to find a partner from your business niche with a similar clientele who will offer something useful to your customers. In this way clients will see ads that serve their interest. Thereby in most cases you draw attention of prospective buyers, the amount of sales or deals constantly rises. If it happens, you receive revenue from your sponsors. They may also reward users and offer a discount when those pay for products or services within your application.

One of the projects with sponsorship model is Runkeeper. It allows tracking exercises, record activities like running, walking, and hiking. Runkeeper works in cooperation with another application from the same field – Google Fit – a health tracking platform. These two products allow collecting and storing all your health data in one place. While running or exercising with Runkeeper, Google Fit will be tracking steps and storing them in their application. If you update your weight in the first app, it will be also updated in the second one. Everything happens automatically.

Choose Mobile App Monetization Model That Best Suits Your Business Case

In order to make an application that not only works, but also gains profit, the right decision will be to monetize it. There is no answer which mobile app monetization strategy works best. Many factors should be taken into account, depending on your application type, primary audience, services you provide etc. You can either choose one strategy or combine several mobile app monetization models to achieve desired effect. However, one idea should remain constant. Real success will be attained only on condition that profit-making and user experience are well-balanced. Drop us a line and we will help you to implement mobile app monetization model that will propel your project to the next level.

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