Are you an app developer? Do you own one? Do you think monetizing your app will bring you the ultimate joy of creating it?
If yes, then this one is for you. We are here today with not one or two but multiple App Monetization Strategies for you to start earning with your App.
Anything that brings value to the table can turn into money with the right strategies. All you have to do is understand that value and how to maximize your leverage. We can also say that we should know how to obtain the most of it’s worth. The same is the case with apps. A valuable app has a huge potential to generate a good amount of revenue for you, and it will if you just follow the right strategies.
This article will take you through an overview and will tell you the clear advantages and weaknesses. You will also learn the right monetization strategy for you. But make sure that your app has the value that is needed.
Factors to Consider when Choosing Your Monetization Strategy
There are many different strategies you can implement to monetize your app. However, choosing the most suitable strategy is the focus point here. This can be done by keeping an open mind and understanding what your application brings to the table and then targeting people who would invest or spend their hard-earned money.
This opens many doors to data monetization and advertising. If you have a specific type of audience to target, such as “B2B clients,” know what they want, and their likes and dislikes. For example, they don’t want interfaces cluttered with ads or their data being collected, and they are willing to pay for that privilege, you can monetize your app by making them subscribers.
Moreover, the more frequently your app is used, the more profitable it becomes to run ads. Suppose users are checking it multiple times a day, great. If they open it once a week and most likely stick to one screen, bombarding them with ads in that small time frame is a bad idea. In this case, go with some other models that suit the criteria more than the others, such as subscription-based models.
Data monetization becomes exceptionally harder if your app deals with vulnerable parties like children. The same is the case with teenagers. They don’t have purchasing power, so targeting them would get you slower results as it doesn’t matter how valuable they think something is or how bad they want it. The only price most can afford is free.
Consider these three factors, and you arrive at the best way to maximize revenue. You don’t have to stick to one strategy forever. If one fails, try another. Just be tactful about implementation.
1. In-App Advertising:
App advertising includes building something people want to use and then running adverts on it to generate revenue. You can do this by showcasing the fact that you can have your application’s service for free and make your app highly competitive, as only then will it generate the revenue you want to generate.
You might be wondering, how do you estimate ad revenue? You need to know how much you get per impression every time the ad gets displayed, regardless of whether someone clicks on it. For this reason, you’ll be operating with an ad network. With these networks, you must negotiate, but Google helps negotiate the best deal for you. How much you get for an impression varies depending on the type of ad, type of app, where your users are located, and where the app is being placed and course, android versus iOS will always affect the maximum amount of revenue you can generate.
The main advantage of ads as your revenue strategy is that you make money off all your users. So, if your app is the kind with broad appeal and frequent usage, you can really take advantage of this.
The main disadvantage of an ad-based monetization strategy is that you are serving advertisers, not users. You must prioritize keeping advertisers happy instead of delivering the content you want for your users.
2. In-App Purchases:
Two other ways of thinking about in-app purchases are “on demand” and “pay as you go.” The way they work is that the base app is free to use, and most users won’t be happy with it. Let’s take the example of a stock image-providing app. Some users want to pay for a more exclusive stock image, while some want to go with the free ones you have available. And if you’re into web development, even WordPress could be seen as an example.
Their revenue comes from subscriptions and hosting. The main advantage of in-app purchases as your revenue strategy is that if the base version of your app is valuable, users will stick around, so you can always close extra sales when they suddenly need perks.
The main disadvantage is it’s too unpredictable to be the only source of revenue. It’s normally paired with another monetization strategy.
3. Auto-Renewable Subscriptions:
The concepts of in-app purchases and auto-renewable subscriptions interlink with each other. The main difference between in-app purchases and subscriptions is that the in-app purchases are more unpredictable. The user may or may not buy your in-app feature. However, once a user buys an auto-renewable subscription they will likely continue to use the subscription for a long period of time. You are basically locking users into fixed deductions per week or per month when it comes to subscriptions.
The main advantage of subscriptions is your revenue strategy. You get predictable recurring revenue. You can also play around with discounts for longer Subscriptions and group plans.
We’ve covered common monetization strategies, meaning they apply to a wide variety of apps. Now, let’s look at less conventional strategies.
4. White Labeling:
A white label app is the app version of a T-shirt printing company. It’s a template of an app customized based on a client’s needs at a basic level. We put in their logo, brand colors, and company information. You want your marketplace app to hold live auctions if you want to include some secure payment. Anything you want will be for a price, and you can use this to your advantage. The client now has a custom app without having to pay custom prices or wait forever. This is a B2B market, especially for developers who like to professionally snipe their targets rather than availing any opportunity they can get themselves involved in.
You want to be narrow and specific and great at what you do. When the white label is done well, you won’t know it’s a white label. Moreover, you can make white-label apps for every industry you can think of, for example, on the white-label provider for several different types of apps, including business management, operators, drivers, and more. You know it’s B to B when their pricing page just says ask us our main advantage.
Once you have a white-label product, you can enjoy the idea of repeating sales and, on top of that, charge for extra customization requests. Depending on the industry, you could be looking at huge sums of money. The main disadvantage? White labels are made to be specific. When things are looking good, you have specialized in a niche. When things go bad, your recovery will not be easy.
5. Crowd Funding:
What if you have an idea but don’t have an investor to front you with the money? You could find an investor, or you could try crowdfunding setup pages on crowdfunding platforms like Kickstarter or Indiegogo. Explain your product and how it will add value to the user’s life. Then, tell your viewers how much you need and what for. If you sound credible, people will pay.
The main advantage is that this is an exceptional way to validate your idea and test market size. Crowdfunding platforms are trafficked by hundreds of thousands of potential users, and if you’ve got something good, many of them will be your early adopters. You get to generate revenue before even starting development.
The main disadvantage is that if you take people’s money and don’t deliver, you could permanently damage your reputation and all future projects. Crowdfunding has a bad reputation for scams. Even if you don’t intend to do your crowd any wrong, most people will still call you a scammer.
6. Corporate or Public Sponsorship:
If your app aligns with the vision and mission of a corporation or government agency, you can get sponsored by them. For example, code.org. code.org is an international nonprofit organization that offers coding and computer science resources for students and teachers. They’re doing all of humanity a service, and their list of partners is an insane mix of both government and corporate donors.
The main advantage is that if you can get corporate and government sponsors, you’re set. The money is huge. The main disadvantage is that, just like with advertising, you’re at the mercy of corporations and government agencies. Your app or product cannot have its own identity. It only echoes what your sponsors think will protect their interests.
7. Data Monetization:
When you have an app, the usage of the app usually generates some data, and there might be people willing to pay for that. This data must be taken with consent and can have a lot of value for people in the suitable industry, and it is something people are making good money from.
This strategy involves selling user data to add agencies, telco companies, research institutes, and any reputable party that wants to create new products, improve services, or develop hypotheses based on data. The data must be anonymous, avoid personally identifying information, and must be collected lawfully, meaning with the users’ consent at large.
No addresses, no genders, no ages, no needs. Instead, you want to accumulate data about their screen size, payment method of choice, country of origin, device type, and other general data points. Users must always be asked for consent.
Be Careful When Harvesting Data!
That said, you usually need a minimum of 50,000 active daily users for this to be a viable strategy. Otherwise, buyers just aren’t interested.
All that said, please be very careful. Selling some high-level data is fine, but you can never sell user data. The rules are very strict. So be very careful, or just don’t do it if you don’t intend to look for all the laws and rules regarding this method. On top of that, Apple values privacy. They do not want you to sell any sort of user data.
The main advantage is rather than running ads. You make money from all users. Unlike ads, data collection happens behind the scenes and won’t interrupt the user experience when done well.
The main disadvantage is that it must be done well to be non-intrusive. You must ensure your data-holding tech stack is rigid and compatible with the General Data Protection Regulation.
Anonymized data about users and behaviors, trends, and so on is fine, but any sort of users’ personal data is a no-go. Stay away from that and try to not get anything in the way of the product.
Another main advantage is that this allows you to get involved in categories where there is money to be made. The bad so many things, especially on what you sell. So be careful here. All in all, this is a bit of a minefield, so if in doubt, don’t do it. Here’s the list of the full monetization strategies. Very often, you can combine things, and then you have a really good revenue.
This way, you monetize different kinds of users. Some users are willing to pay for the app. Others are willing to see ads. If you know other creative ways of making money on apps, please let me know in the comments. If you want more content just like this, please consider person-like and sub. And you want to miss any future videos? Thank you very much. Fortune roll startup. Stop watching. Go build something.
1. One-time Payment:
Let’s look at the first option and the most obvious one, having a flat fee upfront cost for your app to pay for your app and unlock all the features, with none of the features being available for free at first. It’s the common use case you used to see a while back when the online app stores first started.
It’s something that’s becoming less and less popular out there. Mainly because it doesn’t even let the user try your app before buying it; this obviously makes it extremely difficult for the developer to get traction on their app because it’s hard to get that initial, you know, the influx of people that are willing to buy your app before there’s any feedback to it.
This is something that applies to the user who understands what he’s getting for that upfront fee, and on the offline gaming side of developing, it’s easier to manage because finite games might have a couple of patches here and there, but most of the time won’t require a huge amount of maintenance post-launch, and so the developer can kind of launch his app.
Research and understand the users and then move on to this project down the line. This is something you can’t necessarily do with utility apps and things that people are going to use daily. The reason is that in a lot of cases, they’re going to expect some kind of updates, some kind of bug fixes, some kind of improvements over the app. As explained earlier, this is not much of a popular option anymore, and this is because people opt for free apps and then purchase in-app currencies of any sort as they’ve gotten familiar with it, instead of buying an app without first using it.
2. Pro Subscriptions:
Most of the basic features that are going to be available from the get-go when you download the app can be chosen from, and some of them that are more useful than others can be put behind some kind of pro subscription. However, if the users want to use so for a small monthly or yearly fee, the users that really need to push the app to the limit can pay for those features without having to make the people that use one or two simple features from the app can pay for it.
At this point in time, this is probably one of the best ways to support yourself as an app developer. This is because it’s always going to take time to maintain an app to push updates, to update it for new iOS releases, for example. That way, you’re ensuring that you’re going to be getting some kind of income from your apps that are going to be ongoing. It’s also probably the way that you’re going to end up making more money over the long term. It’s really no surprise that you’re seeing a lot of companies use this kind of service nowadays.
Moreover, a lot of developers out there are kind of put off by the idea of adding recurring subscriptions to their apps just because there are so many things that must be done right. Attention to detail must outperform every other statistic for this step to be achieved and successfully utilized.
3. Single Purchased Unlock Features:
You can obviously do kind of the same thing but with flat fees. You’re most likely gonna make less money from doing this, but you might feel better about the way you’re treating your user from it. That same set of features might have been a pro sub. Them, or something like that, can just be made available for a flat fee for the user. Whatever you think is reasonable for the user to pay as a one-time thing to access everything that’s beyond the basic scope of the app and finally beyond just the features.
You can even use the idea of small purchases in a free app to do things like letting the user unlock special appearances for the apps or app icons and things like that. This idea also works in video games with skins and customizable features within the game, and there’s no reason why it wouldn’t work in an iOS app if done correctly.
If people enjoy using your product, they’re going to be happy to support it in small ways, and they’re going to be happy to be able to customize the appearance of something they use probably every day or every week or whatnot.
5. Selling products or services:
With this method, you basically facilitate the sale of a product or a service. This can be done in many ways with very different complexities, from a very low-complexity affiliate deal to full-on e-commerce in many countries.
This can also be done with non-physical products like hotels, flights, or car rentals. In that space, we have apps like booking.com and Sky scanner. Usually, you get a cut and some kind of commission on everything sold through the app. That’s how you’re making money this way. Let’s have a look at how a sale can be made through an app. This is important because the complexity changes a lot. Affiliates basically send buyers to somebody else who handles the e-commerce aspect of the business.
Amazon has some organized complexity, with its capability of providing drop shipping features. You take orders, but somebody else does most of the shipping. With full-fledged e-commerce deals, you’re on a full e-commerce shop just like Amazon.
Now, let’s have a look at the good and the bad. When it comes to selling stuff in your app, it is a feature that doesn’t really get in the way of your app. However, this depends on the model of complexity you’re working off. All in all, this is a very complicated way to make money off an app.
6. Digital Subscriptions:
Have a paid digital subscription where users pay monthly or annually. This model is very popular for many reasons, and it’s especially good for apps that are used on a regular basis, monthly, weekly, or even daily. Apps that use this model that you probably have heard about already are Netflix, Disney Plus, HBO Max as well and most other streaming apps. There are also a lot of health and well-being apps that use this model.
When it comes to how you charge what you charge, the strategies vary a little bit. A very common way of doing it is having a free app and adding a few features, and you have your users pay for that. That’s known as freemium; Others are paid only. Maybe you get a short trial, but then after that, you must pay to use the app. Price depends on the service value and the category.
Prices can be all the way from a few dollars a month all the way up to 20-30 dollars every single month. If you have a free app and a good number of users who are willing to pay, you can use this to your advantage.
The main advantage is that it’s instantly global, high margin, recurring, and predictable. The main disadvantage is that it’s not for occasionally used products. Some markets and people just don’t like subscriptions. All in all, this is a fantastic way to monetize an app. There’s a reason why it’s very, very popular, and it’s because this method works.
7. Advertising and Sponsorships:
Basically, putting ads or some kind of advertising into the app; these ads even include interstitial ads. They take over the full screen, and the user must wait to get rid of them. They’re more intrusive, and they will pay better.
The main disadvantage is that You’ll need a lot of users to make money here, or it can also be hugely targeted as it will result in better income generation. Then you can make a little bit of money showing ads to a small group of people; 200 people is not going to get you very far.
You will need a lot of users, but the usage is wide. It’s used in all kinds of different apps. That’s good and easy to do. The bad part is that this can be intrusive for your users. Users often don’t like banners, and advertising, in general, takes a lot of volume of people to get a good output. Usually, millions of users before it becomes meaningful and advantageous.
8. Sell Digital Goods:
This is sometimes referred to as in-app purchases. Basically, you pay something to unlock a feature or get something special inside the app. These days, it’s mostly used in games where you can buy things like skins, weapons, extra lives, or turn levels. These are slipping into two categories: consumables and Non consumables. Consumables are things that you buy, and then you use them, and then you need a new one. Non consumables you buy once, and that’s it.
Maybe it unlocks a feature or something like that. The cool thing about consumables is that people keep buying them. It’s almost like a subscription. This can be used outside games, but you have to be a little creative.
The main advantage is that its instantly global. There is a willingness to pay in certain categories, especially games. The bad part is that its not recurring unless it’s consumable; then they sort of keep coming. This is a good way to monetize, especially in certain categories
How to Use Advertisements to Monetize Your App:
There’s a huge variety of ways that developers incorporate ads in their apps in ways that make it so they don’t have to manage, target, and find people to purchase their ad spots and whatnot. You can easily add some kind of paid tier to your app that’s going to adjust for a flat fee to remove all the ads from your app for that user, but that is extremely difficult to pull off.
One of the reasons that using third-party services that just choose the ads and manage everything for you is that it can easily make your app look cheap. Let’s just take the idea of adding A banner at the bottom that’s managed by Google. You spend all your time working on that fancy design, making it look nice, making the colors work together and look professional, and you just add that banner that, for some reason, you know, has something that’s completely missing the mark and clashes completely with your app.
You’re going to end up with something that looks so much worse than if it was just left blank. This is not to say it never works, but when the developer completely did them in a custom manner, and none of it was left to be managed by a third party, it was exceptionally better.
But here’s the catch. Doing all of this is a lot of work inside the app, and A ton of work outside of it too. It’s hard to apply the kind of idea that you can keep everything inside the app if you don’t have something that lends itself well to promoting similar stuff inside your app. So it can obviously be done, but it’s going to be done at the cost of a lot of work and effort, and it obviously might be extremely rewarding if you pull it off accurately. However, if you don’t pull it off right, it might be a complete waste of your time.
Most people, when using apps nowadays, are expecting some kind of free tier where they can use some of the features, at least the basic ones, or at least the ones that most people use. Then, what you can do on top of that is just add layers of stuff that you can unlock through purchases. You’ve probably seen that type of content in a lot of the apps that you’re using right now.
Hopefully, all the above-given information gave you a basic idea of what’s available out there and what can be done to monetize your app easily. Obviously, all these options are dependent on the project you’re doing, what kind of application you’ve been building, and what your target audience is. Nothing’s going to work for everyone. You just must put in the time and try to think about what’s going to work for your project, what works with your values, and how you want to treat your users.
1. Do app ads make money?
The average revenue per ad impression can be anywhere, starting from a minimum of $0.10 and a maximum of $10; this depends on the type of ad you’re running.
2. How much do 1000 app downloads make?
It all comes down to the usage of your app and the number of people who tap on the advertisements you’re running on it. You can make up to 10$ per day if the app is heavily trafficked.
3. How much do Free apps make?
Free apps generate revenue from advertising, in-app purchases, selling subscriptions, etc. This varies according to how much the responsible party is charging its users. However, when it comes to advertisements, the app could generate between $0.1 to $10 per day if it’s heavily used.