One of the most considerations when building an app is its monetisation strategy, as app development is no cheap undertaking and the costs need to be recouped by those who invested in it. The best way to to do so is to make sure the app you develop is one is available to as many users as possible, increasing your monetisation chances. Don’t believe me? Just take a look at the ratio of free apps when compared to those that are free!
Sourced from Statista
It’s clear that opting to make your app downloadable for free will make it attractive for a large demographic to whom you can market, convince and provide your app. But once this is done, how exactly will you be monetising the app? Well, we have 5 key tried and tested methods through which you can use to earn revenue from your free app.
1. In-App purchases
Used by most app makers these days, in-app purchases are essentially a strategy of attracting a user to an app before pitching extra services that are only accessible for a set fee. Earning revenue via this method is rather easy if your app is a game as the players can be encouraged to buy token in exchange for bonuses. You can do the same with non-game apps by offering an ad-free premium version of your app. Such a strategy can be a sizable revenue generator for both game and non-game apps as the stats from Business of Apps (2019).
In-app purchases (50%), paid downloads (50%), and in-app advertising (49%) were the most common actually used app monetisation strategies for non-game apps
For games, only in-app advertising (81%) edged out out in-app purchases (79%)
2. Sponsorships
Done right, sponsorships are a very lucrative method of monetising your app and can bring a steady stream of income. The trick is to build an app for a niche audience who would be interesting to a potential sponsor, who can then model the app with their branding, for a fee. Do, however, remember that such sponsorship opportunities are only good if your app caters to a niche demographic that is sizable.
3. Advertising
Sourced from techpatio
One of the most common and best means to monetise an app is through advertisements you users might find relevant. Setting up such advertisements is a relatively easy task as there many third-party networks to assist with this. The type of ads that you can run include, but are not limited to:
- Banner ads– the most common ads format you might have often come across, banner ads pictorial and often found at the top or bottom of a mobile app. Such ads goal is to remain in the users’ sight at all times so as to increase the chances of clicks on the ad. Some banner ads, however, might get blocked by adblockers if your users have invested in one, thereby throttling your advertising efforts.
- Native ads– heralded as the answer to adblockers, native ads are ads that are more ingrained to the app and its content. Such ads cannot be blocked and tend to be more appealing and less intrusive than banner ads.
- In-app video– a fantastic means of getting marketing messages across, videos on average receive more engagement than the typical ads, making it more attractive to advertisers.
- Interstitials– closely related to pop-ups, these ads are displayed to users during transitions in the app. Such ads are less intrusive and offer decent interaction with the users in your app.
The important thing to remember is that advertising is not the only strategy you should be depending on for monetizing your app, as it takes a substantial amount of regular users to create sizable income.
4. Referral Marketing
Referral marketing is a strategy through which you can monetise a free app by displaying ads for other apps and/or services. The revenue generated is dependent on several metrics and can be a very good source of income if done right.
- Cost per view (CPV) – this revenue model is based on the number of views on an ad, whether it be an image or a video.
- Cost per click (CPC) – a revenue model on which the number of clicks on the ads displayed, decide the revenue generated.
- Cost per install (CPI) – equivalent to the cost of acquisition (CPA) of an app, the CPI is a revenue model based on the number of installs that result from a particular referral ad.
5. E-mail Marketing
As old as it might be, email marketing is still a very powerful method of reaching out to customers who are actively interested in your products and those related to it. To do this, you can collect user emails via popups that offer rewards in exchange or a Facebook SDK that allows users to log in using their Facebook profiles. Once collected, these email addresses can be used to reach out with updates on new features on your app, offers, news and anything that might bring users back to your app and increase its monetisation opportunities.
In any case, do make sure that the emails you collect are done with full transparency on how they will be used. Such personal data should be collected and used with due diligence as failing to do so can have you incurring huge fines under regulations such as the General Data Protection Policy (GDPR) of Europe.
Sourced from gamesindustry
Conclusion
Building an app is a serious financial undertaking and we understand that recovering these costs as soon as possible is a key consideration for you. These 5 monetisation strategies, however, can go along way towards helping you obtain a good return on investment, provided you pick the right one that is suitable for your app, its users and expectations. Remember that you can opt for either one or more strategies concurrently, provided you keep the user experience top of mind.
