Date of publication
Money Maker App. Why Not?
You’ve created your application, fantastic! But how would you get a return on your investment after a long arduous development process? The simple answer is: monetise your application. In this article, we will take a look at what app monetisation is, and which strategies can be followed to ensure a consistent user base and revenue.
App monetisation is the process of converting your app users into money, money, money. It's turning your app into a money-making machine! but it's not as simple as it sounds. There are a lot of different ways to monetise your app, but it all depends on the purpose, content, and most importantly - the audience of your application.
Popular app monetisation strategies
App monetisation strategies can be complicated (and exhausting). So, we’ve simplified this with a short list of some of the most popular strategies out there:
- In-App purchases
- In-App ads
- Paid app downloads
- Crowdfunding
- Premium subscriptions
Before looking into monetisation strategies we must understand that it is essential to generate income to fund your application’s development and maintenance. Without a growing income to pay for improvements on your application, users might start to feel that the app is outdated and going nowhere. This is one of the main reasons why users lose interest in apps. Keeping the app experience exciting will help you gain more interaction from users.
App monetisation strategies explained
Looking at the pros and cons of the above-mentioned app monetisation strategies might help you decide which path you want to set sail on. You should keep in mind that there is no one-size-fits-all approach when it comes to monetising your app as each app has different goals.
App monetisation strategies explained
With inApp purchases, users are able to purchase virtual goods and services at a cost. Existing users will be more interactive with the app as they can't wait for that new product or service you advertised. This is a great way of generating income if your app has a lot of valuable content. Once a user has paid for something, their loyalty to your app will increase, therefore always give them a good reason to make that purchase.
The downside of in-app purchases is that they are very difficult to market effectively. It’s never easy to convince your users that the goods or services you are offering are worth the price.
InApp ads
InApp ads are one of the most common and effective ways of app monetisation. Providing free-to-use content and features draws a user's attention. But how would you generate income by using in-app ads? When a user clicks on an advertisement in your app you get paid a small amount. Below are the different types of pricing models that benefit both the publisher and the advertiser.
- Cost per mile is when the publisher receives payment from the advertiser for the amount of time an ad has been displayed on the app.
- Cost per click is when the advertiser pays the publisher for the amount of time an ad has been clicked on.
- Cost per action is when the advertiser pays the publisher for when a user performs a pre-defined action on the app. For example, if you have an app that allows users to read articles or blogs and the user clicks on an article to read it, the person who wrote it will pay the publisher.
- Cost per install is when the publisher receives an amount for every app installation. For example, A user will be prompted to download the application being advertised. Once the user click’s on the ad to download and install the app the advertiser will pay the publisher.
However, by using inApp ads you might see a reduction in app users. The reason for this is users will get irritated with all the ads on your app. One way of preventing this is to play around with the design and position of your advertisement banner.
Paid app downloads
Paid app downloads are another great app monetisation strategy. The user will only pay a once-off fee to download your application. This strategy is effective if you have a loyal user base and if your app provides a lot of value.
The disadvantage of paid app downloads is that users are more likely to not upgrade to a premium package. It’s very difficult to market this type of strategy effectively as you would need to convince the user that they are getting their money's worth when buying the app.
Crowdfunding
Crowdfunding can be a great way to monetise your app. By giving users the ability to make donations, you can identify which audience to target and what features to focus on. This can help you get the most out of your app development. If you're a startup with limited resources, this is the strategy for you. By revealing new features in a 'coming soon' tab or screen, you can generate interest from users and by allowing them to donate to access these features, you can maintain a steady user base.
Crowdfunding can be a great way to finance a new project, but it's important to remember that it's not a steady source of income. App development and maintenance may suffer if funding varies from month to month.
Premium subscriptions
Premium subscriptions allow users to download a basic version of your app for free and only charge them to access premium content and features. This is a great way of building interest in your app. Users who have access to some content and features are more likely to upgrade to higher packages.
The main challenge of premium subscriptions is that you need to strike a balance of providing enough free features that will keep a consistent user base but also intrigue them to buy the premium version. However, providing too much or too little will either trigger the user to lose interest - or they might feel that there is not enough value in buying the premium version.
Closing thoughts
Finally, there is no right or wrong way of doing app monetisation. It is crucial to identify your target audience, understand the purpose of your app and generate relevant content when choosing a suitable strategy. The best approach is to experiment and identify the best strategy for your app and users.
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