How to monetize your app

How to monetize your app
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When you create an application (whatever idea is standing behind) you have to earn money on it. And if there are no investors or predefined mechanisms how to generate income with it, you should consider monetization. In this article, we will tell your about preferred ways of monetization, based on the survey provided by App Annie. From the experience of more than 12 thousand of developers, business owners, and marketers you will find a proper way how to monetize your app. 

From the survey, it’s obvious that the most popular types of monetization in 2017 are advertising in applications and advertising through stores. 75% of respondents choose one of these two monetization methods, and 38% of respondents have chosen both methods at once. In the course of the study, several key trends in monetization were identified:

  • subscription purchased via the app store gains more and more popularity;
  • the freemium model became the most popular monetization model (it is used by 71% of game publishers and 52% of applications);
  • video ads and static banners continue to bring the bulk of revenue.

The most profitable ways to monetize are still built-in purchases and paid downloads. In the second place – the revenue from advertising in applications and increased loyalty through the retention of users.

With several popular apps App Annie demonstrated possible ways of freemium monetization model:

Freemium monetization Value proposition  App Examples
Usage Free app offers limited usage, bandwidth, hours, content, or storage space. Pay to raise or remove those limits. NYTimes
Free trial Free app offers full functionality for a limited amount of time. Pay to continue using after time period is up. Netflix
The Wall Street Journal
Functionality Pay for virtual items, speed-ups, content, add-ons, upgrades, services or capabilities. Clash Royal
Usage impressions Free app is ad-supported. Pay in-app to remove ads or through a separate paid download.  Trivia Crack
Combination of several ways The app uses a combination of the listed above.  Spotify

Among the various freemium techniques that publishers can use, 61% of respondents indicated that they use functionality, followed by user experience with 40%. There are, however, significant differences among verticals in which freemium techniques are most popular, especially among gaming and non-gaming companies. Gaming publishers are more likely to use functionality, with 75% of respondents selecting that option, while only 54% of non-gaming companies selected it. In addition, gaming companies are also more likely to utilize the user experience option. On the other hand, usage, free trial and combination models were more commonly selected by non-gaming verticals.

About 5% or fewer of monthly active users make an in-app purchase.

So before just setting an advertising for your app, you’d better evaluate the purpose, functionality and target audience. When you will consider this data, go over the details and read some hints to monetize your app:

● The functionality freemium technique is popular with games, but is not a good fit with banking, for example.

● Given that some freemium models still see very low numbers of paying users, publishers seeking to monetize should use other options, including advertising, to generate revenue in addition to in-app purchases, and many developers already combine this with ads.

● The expansion of subscription models across categories and the lower long-term revenue cuts from the two major app stores should prompt more developers to consider using them.

● Advertising continues to carry user experience risks, and developers need to consider the formats and frequency of these ads carefully to ensure the right mix of engagement and monetization. Otherwise, you risk losing your users.

We hope you will decide on your monetization strategy carefully! And ask professionals for help when developing your application. Because users love quality-made applications.

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