How to monetize mobile apps?

The mobile application industry is growing at a breakneck pace. In 2020 alone, customers had already made around 218 billion app downloads. And this number will continue to rise year after year. However, creating popular mobile apps is just half of the story.

Mobile app development is, first and foremost, aimed to help businesses make profit. Global income from mobile applications will reach $808.7 billion in 2022, according to Statista. It’s a significant jump compared to $693 billion in 2021.

But how successful apps become such and what monetization techniques they use? We’ll discuss it in the article.

How to Monetize Mobile Apps

Businesses can make money even on free applications. For instance, one of the most prominent categories in the mobile app market iste entertainment, which includes games. When users download and play a free game, they bring its developer significant earnings. And it’s all because the game’s creators have planned ahead what monetization methods they’ll employ.

There are several basic strategies on how to make money on mobile apps. You can use one monetization plan or combine several of them. You may either make a paid app right away or launch a free version with paid features. There are enough options to choose from.

What is Mobile App Monetization?

Mobile app monetization is a way to make money by selling services, displaying ads, or subscribing through mobile apps. Effective monetization helps to get financial benefits and increase user loyalty and satisfaction with the product. It’s not just another way to make money, it’s about providing users with valuable services or information that they are willing to pay for. Therefore, both parties are interested in receiving certain benefits from this cooperation. 

Let’s take a closer look at what exactly is included in the list of services that can be monetized in mobile apps. We talk about this in the section above, but let’s conclude it shortly. Most often, it’s advertising, like the display of ads in apps, for which developers receive income. The next way is in-app purchases: selling additional features, content, or virtual goods. This is the most common for game apps. 

Monetization also works with subscriptions, where users pay a regular fee for access to certain features or content. You may have encountered this when buying access to Netflix or Premium services on LinkedIn. 

Today, it’s the most popular method of generating revenue through mobile apps. Think about how many times you’ve seen this in apps on your smartphone. So, it can be used for financial gain and business development. In the next section, we’ll dig deeper into this. 

Why is Mobile App Monetization so Important?

Monetization is so vital because it helps to maintain and develop a mobile application. Without setting up this function, the application may be financially inefficient because it requires additional maintenance and system updates. Therefore, it’s necessary to think over a detailed monetization plan and implement it in practice. 

Another important point about monetization is investments. Monetization helps to invest in additional app functionality, improve user experience, and customer support. This starts the process of attracting new users. With investments, you can offer them more advanced mobile products that will fit their needs completely. No matter what kind of application it is: games, social networks, TV services, etc. 

Mobile monetization also stimulates competitiveness in a market where new technologies and services are constantly dictating new requirements. If you have the right strategy, you can keep your mobile app high quality and provide users with extra value, while keeping earnings and audience loyalty in balance. 

Which Monetization Model is Best for Your App?

Choosing an effective monetization model for your mobile app depends on several factors. First, it’s the type of application. Depending on its goals, you will subsequently consider a monetization plan. If it’s a game app, you should consider advertising or in-app purchases. If we’re talking about Netflix again, it’s more logical to use a subscription format. Therefore, first of all, note what your app is about and move on. 

The next factor is your app’s audience. There are different options: whether it’s an app for teenagers, solvent young people, or an older age group. Always take into account your audience’s solvency to increase the chances of your app’s financial efficiency. It’s also notable to highlight the market niche and business goals, which also have a great impact on the further monetization strategy. 

If your app offers unique services, a paid model may be appropriate here. But note that it requires strong marketing to convince users of its value. A quick tip: often the best approach to choosing a fitting monetization model is to combine multiple models to maximize revenue and cater to different audience segments.

How to Make Money on Mobile Apps?

Once you’ve decided to create mobile apps, you’ll need to figure out not just what kind of users you aim to attract but also how you’ll make money from them. Even in the early stages of development, you should consider how to monetize your mobile app.

The major strategies to monetize mobile apps include:

• in-app advertisements;
• in-app purchases;
• freemium;
• premium;
• subscription.

Let’s take a closer look at each of these approaches.

1. In-App Advertisements

It is one of the best ways to monetize mobile apps. Why is this method so popular? Selling paid applications may be a challenging task. But monetizing free ones through built-in advertising is way simpler. You don’t need to persuade users to buy your app—instead, you let them watch some ads and navigate through your app for free. Besides, there are numerous types of advertisement: banners, interstitial, video, interactive, native ads, and even more. This is, for example, how mobile restaurant apps can get their money—by offering advertising options to restaurants.

2. In-App Purchases

In-app purchases account for nearly half of all revenue generated by mobile apps. This approach to monetization involves real or virtual purchases within the application. It’s most commonly seen in mobile games where players may buy extra items. This earnings model, however, is appropriate for almost any app category. It is already used in e-commerce, photography, health & fitness, lifestyle applications, etc. For example, in the e-commerce app, the user can purchase gift vouchers for friends, and in the photography app – buy filters or presets for advanced photo editing.

3. Freemium

The freemium model provides a minimal set of free features, while the advanced functionality is accessible at an additional cost. If users enjoy your app’s free version and you make it clear about how extra features can be helpful, they are likely to purchase the full version.

4. Premium

It is, in a nutshell, a paid application. According to Statista, the market share of such apps is only 6.4% for iOS and only 3.1% for Android. It is the most transparent method of monetization but also the most complex. If you choose this earning strategy, you must ensure that the user is interested in buying your product. You may profit from premium applications by demonstrating their exceptional features and giving an outstanding experience to potential customers.

Typically, applications for productivity, health & fitness employ this method of monetization. It may be a customized to-do list, a handy calendar, or a fitness app that enables the most personalized training experience.

5. Subscription

This approach to monetization is similar to freemium, but instead of the additional functionality of the application, subscription usually offers access to premium content. It works on a weekly, monthly, or yearly basis, and users make regular payments to continue enjoying the app’s content.

The MindZip project, for which TRIARE has built a whole ecosystem, including a mobile app, uses subscription for monetization. The application’s primary goal is to strengthen knowledge through frequent repetition. By purchasing a subscription, users may unlock premium collections on a variety of topics.

Summary

As you can see, there are many ways to make money on mobile applications. We have listed only the basic approaches to monetization. In reality, mobile app developers can combine tools that help profit from applications following the needs and goals of your business.