Which is easier, building a mobile app or making money out of it?
With the number of apps in the market clocking at billions, it goes without saying that the former is easy. Making your mobile app earn for you is not as easy as it used to be. Ask any top mobile app development company or an app owner, they would say that monetizing is a challenge that is all-too-common in today’s scenario. True.
But there are businesses who generate decent revenue through mobile apps, and quite successfully at that. So, what is that they know that others don’t?
The truth is that there are no new strategies. Many successful app owners still use the same tried and trusted strategies to make their apps ‘work’ for them. Unfortunately for others, they have either ignored or just overlooked them thinking they don’t work anymore.
The best way to start generating revenue from your app is not just diving into strategies. It begins by acquiring the necessary knowledge on current monetizing methods and having a clear revenue mandate that suits your business model.
Here are four tried and tested revenue generating models that are still helping businesses reap some good moolah.
1. In-App Purchases
This revenue strategy is prevalent and widely preferred, and they are mostly used with the freemium model. Nearly 50% of the popular mobile apps employ in-app purchase revenue model to monetize.
Freemium apps are free to download, however, users might have to purchase a service or a product, or may have to pay to unlock certain features or aspects of the app. Gaming apps are a good example.
2. In-App Advertising
People tend to confuse this one with In-App Purchases. If your app is well-known or has a growing number of downloads you can let other businesses put up their ads in your app (in the form of video ads, banner ads etc). But you should analyse your user reactions before you allow in app advertising, because too much ads or irrelevant ads can drive away users instead of retaining them.
As a contrary strategy you can also earn by not showing the ads to the users. That’s right. Advertisements, as much as being useful, can turn out to be equally annoying. So, you can earn from users by offering ad free version of the app, which can be sold as an upgrade.
Sponsorship is an effective strategy, however, just as the name suggests, it works only when you have a sponsor with a similar or same target audience. This method is fast turning out to be a lucrative proposition.
After you’ve secured the sponsor, you can white label the app and design it to be in line with the sponsor’s brand. Now, why would a company sponsor a mobile app you may ask. The benefits are manifold for the sponsors: Showcasing their brand name in different apps, create strong impressions with new audiences, and it could set them apart from their competitors.
There are various kinds of promotions a sponsor company will pay for:
Sponsor Icons: A clickable icon of the sponsor appears on home page, and when clicked it takes users to the sponsor’s website.
Homepage Logo: The sponsor logo will appear with ‘Sponsored by’ or ‘Powered by’ for better reachability.
Multi Sponsor Page: You can invite multiple sponsors with their names and logos.
Splash Screen: It displays a full size splash screen branding just before the home page.
Push Notifications: Notification is a widely used method today. There are text notifications, image notifications, and animated text notifications through which sponsors send quick alerts and take the user engagement to a new level.
Typically, in sponsorship method app owners can earn in any one of these two ways:
- A revenue split
- Monthly subscription fee
4. Mobile Affiliate Network
This concept is slightly wider in its practicality and demands a little bit of explanation.
There are three groups involved here and they are streamlined as such:
Image source: Mobidea
Though there may be other parties involved, the above structure is sufficient enough to give you a gist about this concept.
Advertisers: They rely on mobile products to advertise their content and generate revenue out of it. These parties could be VAS companies, app owners, product/service owners etc. Since they can’t advertise all over the net, they prefer a platform, like an mobile app, to advertise to a large number of users under a single roof. For this, they take help from Publishers to manage their ads and increase traffic to their offers.
Publishers: They rely on user traffic to make money from it. For example, mobile apps, websites, social media channels. These are the people who supply mobile ad spaces where offers are promoted.
Affiliate programs: They create a bridge between supply and demand. In other words it is a mobile platform which brings together advertisers and affiliates under the same roof. By joining a mobile affiliate network you would be advertising relevant products, apps and services offered by affiliates and earn money from it.
You can earn either through:
- Cost per action: You can earn every time someone installs the app or clicks on ads, or carry out any other action.
- Revenue sharing model: You would receive a certain percentage of revenue from the amount you’ve managed to generate for the advertisers.
An advertiser can directly control an affiliate program. Amazon is a very good example of advertiser-owned affiliate program.
Here are a list of some famous affiliate platforms you can check out:
The above mentioned are some of the well-known monetising strategies. However, you can carry out further research and implement other models, or even implement multiple models to suit your business.
Monetising is challenging, but not impossible. Due to the huge flux of mobile apps into the market, many app owners think it is too late to monetise through mobile apps. That is not true. The number of businesses who are earning through apps are rising, proving that there is still enough scope to generate revenue through apps.
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