Having a great app idea is one thing, but finding a way to monetize it can be a major challenge. But, if your business is going to be successful, you’ve got to get paid. That’s reality.
When embarking on any new business venture, it’s crucial that you take the time to create a comprehensive business plan, and you’ll want to include your monetization strategy within that overall plan. But, you’ve got to start somewhere and make a decision on how you’d like to get some revenue coming in.
Feeling stuck? Here are some great ways apps are earning revenue in 2018.
Advertise On Your App
Alright, the first one might not be overly creative, but it’s one of the most common ways to monetize your app because it works. The key here is to have a large user-base that will interact with your advertisements.
IHS estimates that by 2020, in-app native advertising revenue will generate around 63% of all mobile display advertising revenue, totaling $53.4B. Enough said.
Charge for App Installs
This model won’t work for everyone, put paid apps continue to do well in certain industries, like health, fitness, and productivity. People are willing to pay for proven products, so it’ll be up to your website and social media presence to demonstrate you’re worth a paid install. With this method, social proof is everything.
This can work for almost any business who creates a product that is addictive - take Spotify for example. You let everyone download your product for free, but if people want certain features they’ve got to upgrade. If your service is good enough, people will happily pay to be able to enjoy the service without disruption or hurdles of any kind.
One study found that 64% of freemium game players make a purchase every single month.
Monetize In-App Purchases
Free apps can easily offer two types of in-app purchases to get some revenue flowing.
- Consumable purchases are single-use only (think game credits)
- Non-consumable purchases are permanent solutions (such as to unlock a level to advance in a game) Set Up a Subscription Model
This type of plan starts like a freemium but gives users access to all the bells and whistles at no cost for a limited time. Eventually, you have to start paying a small monthly fee if you want the fun to continue. This worked wonderfully for Netflix - not many people are willing to let go once that free-trial ends.
Employ SMS Marketing
If you require users to provide their mobile number upon registration, you’ve got the option to use SMS (text message) marketing. Statistically, it performs much better than other things like email marketing and gives you a direct line to your customers.
82% of people say they open every single text message they receive, so this is a phenomenal tool for marketing, update notifications, customer success, re-engagement, and more. Monetize Your Mobile App with Sponsorships Similar to influencer marketing, if you’re popular enough, you can find sponsorship opportunities to align yourself with other brands.
A really great example of this is The RunKeeper app, who was acquired by Asics back in 2016.
Grow Your Email List
Email marketing works for most business models, and free apps are no different. Just like the SMS approach, you’re going to need to collect email addresses upon registration and have a solid email marketing strategy in place to take advantage of your list.
You can use the emails or newsletters you send to provide valuable content, get customer feedback, offer exclusive promotions, and keep your brand top of mind.
This won’t work for everyone, but in some niches, it makes sense to create your own in-app currency that people will buy with real money. For example, gaming or casino apps.
While this isn’t as conventional as the other options, crowdfunding can be a great way to insert funds into your app in those early stages. You can use crowdfunding sites like Kickstarter to raise money, but also to validate your idea and get valuable customer feedback you can use to help finalize your product. This is a great place to test out your MVP.
So there you have it! Whether you want to offer a free or paid service, you’ve got plenty of options to help you monetize your app. It’s not an easy or arbitrary decision, so take your time here to develop a monetization plan that fits into your overall business plan.