Adults between the 18-24 age bracket spend 90.6 hours on their smartphone apps as per a 2015 report by comScore. But that’s not it. The same age group also spends 34.7 hours on tablet apps. As per a recent study of 2018, US adults spend an average of 3 hours and 35 minutes on mobile devices daily. This is an annual increase of over 11 minutes.
These numbers all tell the same story – people spend a lot of time on their apps, which is an excellent way of making money. Wondering how? The answer lies in-app monetization.
Let’s walk you through the different ways you can make money with your app:
1. Paid downloads
If you’ve paid attention, you will notice that there are two kinds of apps in the app store, paid and free apps. You can instantly download a free app, but for a paid application, you need to pay a small sum. And, herein lies the answer to your query of how can you make money with your app.
Set up a small fee that users have to pay upfront as they download your app. A great merit of this app monetization process is that users tend to be more engaged with your application when they pay for it. Plus, your app’s user interface is also less cluttered considering no free ads are running on it.
There is one drawback of this process, though, and it’s the tough competition that free apps pose. Statista reveals that 94.24% of the Android apps in the Google Play Store were free in the first quarter of 2018. In contrast, only 5.76% of the apps were paid. This gives an accurate picture of the competition that you’ll face if you choose this app monetization model.
2. In-app advertising
You are missing a stellar opportunity to make money if you are not running ads on your app. Sweet Pricing notes that 65% of the apps it studied used advertising to generate revenue. Hence, it is safe to say that this is the most popular type of app monetization strategy.
If you plan on making money via ads in your application like the CNN app does, you can encourage downloads too since your app will be free to use. Moreover, by collecting data such as user location, behavior, and preference, you can improve ad content, making it relevant for your audience. Needless to say, relevant ads get better clicks, helping you earn more.
However, you need to ensure that ads are relevant as otherwise, you face the risk of losing users. Ads take valuable screen space, which impacts the user experience. Poor user experience can, in turn, promote people to abandon the app altogether. Keep in mind that a good UI design is key to retaining users. Case studies such as that of Shofun by App verticals highlights how important it is to create a good user experience using a worthy design.
4. Paid ad removal
Another interesting way to make money is by asking users to upgrade to remove ads. In simple words, if your users mean to use your free app without a flood of ads, they can do so by upgrading to a paid version without any ads.
Hence, to execute this strategy, get two versions of your app developed. One with the ads enabled and another without any ads. With this paid version, you can generate revenue from direct sales, rather than ads.
5. In-app purchases
You can encourage an in-app purchase in many ways. These include a cheat code of a mobile game, a reward or new user level, or premium feature in your app. The chief purpose of this add-on is to improve user experience, so it is crucial that your app functions well as the user purchase the add on.
As users make in-app purchases, their experience improves, which makes them loyal to your app. What’s more, digital upgrades don’t require you to store or maintain physical stock, making life easier for you. Plus, your app will be free to download, which will attract users too.
The only drawback is that whatever revenue you generate, Apple and Google will be taking a significant cut from it. Not to forget, you may be required to make refunds if someone accidentally purchases, for instance, a child using his parent’s phone.
5. In-app subscriptions
This strategy also goes by the name of freemium content. On the surface, it seems similar to in-app purchases, which adds new upgrades, content, or so on for users, improving their experience.
However, in-app subscriptions are different as these open the entire app to a user. Essentially, the parent application of such an app monetization model is a basic version of the app. To be able to use the rest of the app, users need to get a premium upgrade.
Again, however, this strategy allows Apple and Google to take a large cut from the money you make. A case in point here is Wall Street Journal’s mobile app that is available for free download and lets you navigate tabs freely. However, most of the news content is concealed behind a paywall, requiring users to pay.
Each of these money making strategies come with its pros and cons. So you need to choose wisely by weighing what will work in your favor and what will stand against you. While selecting an app monetization strategy, make sure you know your audience enough to encourage them to pay for your content.
Additionally, look at your niche or industry to determine the best strategy to generate revenue from it. In-app subscriptions are ideal for blogs and news sites with a wide readers’ pool so decide accordingly and you are ready to make your move!