App Monetisation: Top 5 Strategies for 2022

When it comes to mobile app monetisation, there are multiple routes your business can go down. From branding to marketing, you’ll already know that perfecting your mobile app monetisation strategy will do more than sell a product or service — it’s the gateway to your customers.

It’s predicted that the mobile app market will be worth $407 billion by 2026. However, not every app will earn an equal share of Android and iOS market revenue, and it’s also indicative of the market peaking.

Choosing the right app monetisation strategy for your content, audience, and needs is essential to your future success. So, whether you’re looking for the right monetisation model pre-launch or considering optimising your revenue strategy for an already existing app, this post will provide you with invaluable insight into each model and help you decide what monetisation strategy is the right one for you.

But before we jump straight into the five best app monetisation strategies you can adopt for your mobile app, let’s recap what monetisation is all about.

What is App Monetisation?

App monetisation is what happens when you convert your app users into revenue. 

With so many app models to choose from, you’ll need to understand the best mobile app monetisation strategies to stay competitive in 2022 and beyond. With almost 3.5 million apps available in Google Play in Q1 of 2021 and further 2.22 million iOS apps available in the Apple App Store, it’s clear that there’s money to be made from mobile apps. What’s more, this growth shows no sign of abating.  

apps worldwide
Source: techjury.net

So how do you make money from apps? What methods can make your customers part with their cash, and what app strategy best suits your mobile needs? Let’s dive deeper.

 

App Monetisation Strategies

Mobile app marketing is about engaging with your users — from when they first discover your app to becoming loyal customers. To succeed in the mobile marketing game, you’ll have to figure out who will use your app, where to find them, what they want from you, and how you can support their needs. 

Here are our top 5 app monetisation strategies you can use to connect with your customers.

#1 Subscription-based 

The subscription-based model involves users paying a monthly fee to access your app. It’s proven to be an enormously successful model for brands such as Netflix, Disney+, and Spotify. 

This subscription model enables brands such as Netflix to predict their revenue every month and use it to improve cash flow. Only last month Netflix lost 200,000 subscribers globally and expects to lose a further two million this quarter. By utilising the subscription model, the streaming giant can adjust their subscription offering in a timely manner, helping them acquire new users or offset costs whenever existing users drop off. 

Subscription revenues have increased to US$13 billion since 2019, so it’s no surprise this model is gaining in popularity. Especially that offering a free subscription model doesn’t stop you from generating revenue by using targeted ads to monetise users, which makes this model an attractive entry point for start-ups and SMBs. 

Subscription-based apps not only offer a greater chance to increase revenue, but they also provide a steady income stream for businesses. However, it’s worth keeping in mind that your users will expect more for their money if there’s a monthly fee. This means you’ll need to monitor your user churn regularly and implement effective techniques to increase retention at each stage of the user lifecycle. 

#2 Freemium 

Freemium is a pricing model where the basic app features are free, and more premium ones require payment. Apps, such as Tinder and MyFitnessPal, use this hybrid-pricing strategy.

By attracting users for free, you can persuade them to pay to access premium content, either through subscription fees or in-app purchases. If you’ve added contacts on LinkedIn, shared files through Dropbox, watched cartoons on Disney+, or flirted with a stranger on Tinder or Bumble, you’ve interacted with this model already. 

Free features are the ultimate marketing pull as they allow you to scale up and attract new users ideally at a lower cost for your ad campaigns or acquisition efforts.

Social sharing is a powerful force for this app monetisation model too as many freemium apps offer incentives for referring friends, which is easy when the app is free. Also, this model is more attractive than 30-day-trials as customers are increasingly wary of cancelation processes, which are often challenging to execute and easy to forget about.

#3 Pay-to-download

Pay-to-download apps can cost anything from $0.99 to $999.99, generating money upfront from every new user.

Crucially, anyone paying for your app is more likely to engage with your wider services once they’ve signed up. This app monetisation model attracts users who prefer to pay for quality and enjoy the full experience that the app can offer. But before they hit that pay-to-download button, they’ll likely weigh up the benefits of doing so very carefully. Therefore, to entice the right users, most apps using this model have an outstanding design, navigation, and a huge marketing budget.

pay to download apps

It’s worth keeping in mind, however, that not many people want to pay for apps before using them nowadays. They will also have zero tolerance for any monetisation tactic that disrupts their user experience while using the app. So, if you decide on this monetisation strategy, make sure you demonstrate your app’s value to users, include beautiful visuals and work on those five-star reviews, as they will validate that your app’s purchase is essential.

#4 In-app Advertising  

In-app advertising enables companies to pay you to advertise inside your app. Using this model is a win-win because:

1) The app is free for users to download, making the user acquisition process that little bit easier

2) You can generate revenue through targeted adverts 

If you want to make the most of this app monetisation model, placing the right ad will be essential. A relevant and interesting ad will encourage users to interact with the ad more, which in turn leads to increased engagement, retention, and revenue. For example, videos that provide rewards, such as in-game currency, will appeal to users because they’re people-focused and increase app engagement over time.

One thing to consider for this model is incorporating emotional advertising into your plan. Emotional advertising plays to our desire for love, power, security, and gratification, which are subconscious and can be tapped into by in-app marketing. One way to achieve this is by creating content that appeals to your customer’s emotional needs. Here’s an example of emotional advertising by a popular car traffic app Waze.

emotional marketing
Source: 9to5google.com

In 2021, Waze has partnered with Burger King and Heinz offering a free bottle of ketchup and a free burger at Burger King’s if the drivers reached the speed of 0.045kph – the exact speed of Heinz ketchup coming out of a bottle. Users could claim their prize by simply tapping a pop-up notification that would appear on the screen. What better way of bringing joy to the drivers stuck in traffic? 

#5 In-app Purchases

In-app purchases occur when users buy content inside your app.

This involves selling extra content, subscriptions, or virtual goods, such as gems and coins that can be used as in-app currency in games. With this app monetisation strategy, you can make big profits while forming a long-term emotional bond with your customers and lead to a deeper level of in-app engagement.

This model is particularly popular within the gaming vertical but other app categories such as photo & video, education, or publishing have adopted this strategy successfully. If you want to leverage this monetisation model, consider features that provide value to your users and enhance their experience. Keep in mind, however, that app stores will take a commission on all virtual goods you sell inside the app.

Choosing the Best App Monetisation Strategy for your Business

If your goal is to build and grow revenue through your app, selecting the right mobile-app strategy is essential.

For example, a subscription model will work better if your app is content-focused, such as news, video on demand, fitness, or music. Having a daily stream of content will provide value to your users and motivate them to use your app regularly, which psychologically justifies the cost they spent paying for it.

However, if your app involves gaming or video editing, the in-app advertising model might be a better choice. These examples of apps incorporate interactive and visual elements that enrich the user experience and motivate your customers to make the purchase within the app.

Regardless of what your app offers, the bottom line is that people expect to receive value to engage with your product. So, if you want them to buy something upfront, you’ll need to show them beforehand what your app offers.

Alternatively, if you’re offering a free to download app to your users, you’ll need to demonstrate its value through its utility, so your potential customers feel motivated to invest further and access premium content or new features.  

Wrapping up 

Brass tacks, you’re developing an app to create or supplement your income, so choosing the right monetisation strategy is essential for your mobile app success. Whether your goal is to earn money from the get-go or acquire users at a slower pace, it’s best to consider the suitable monetisation model before you launch your app. By taking the right approach, your app monetisation strategy can not only increase sales but also ensure the long-term popularity of your product.

 

We’ve been recognised as one of the top Mobile App Marketing Agencies by DesignRush.  If you want to find out more about how improving the mobile customer experience can impact your app marketing campaign or you have any app marketing questions feel free to reach out to the Yodel Mobile Growth Team. Additionally, you can sign up to our newsletter for exclusive industry updates and app marketing insights. Want to find out more about optimising your app? Make sure to subscribe to our Mastering Mobile Marketing video series. Follow us on LinkedIn, chat with us on Twitter @yodelmobile, and join our #AppMarketingUK LinkedIn group.

 

About the Author:

Agata is the Marketing Manager at Yodel Mobile, a leading mobile app marketing company. Assisting the agency growth efforts, Agata regularly shares insights on the latest app marketing strategies, promoting sustainable and long-term growth.

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