What is App Monetization and How to Monetize?

App monetization is exactly how it sounds: a way to generate money for your app. As of 2020, the increase of free apps is astonishing. Marketers need to work that much harder to gain revenue for these free apps. Additionally, the use of smartphones far exceeds media consumption and the amount of time spent on apps is also remarkable. Looking at the statistics below, one could easily understand the potential of the market and its potential to reach amounts of consumers and make money from them.

Breakdown of Google Playstore in 2017 and 2018

Before making the decision whether to have a monetized or not, one must understand the customer’s journey. Based on this train of through the understanding of how potential and future customers will utilize the app, the question to ask one’s self is: does it make sense to monetize the app?

The difference between monetizing and not monetized and that a free app any user can download from the app store without having to pay for any of the apps. Comparatively to a paid app, the app as soon as it is downloaded there is a price. However, this is only the tip of the iceberg when it comes to making money with mobile apps. Free app monetization can be broken down into many categories.

Let’s take a look at these monetization methods.

Strategy 1: Pay-to-Download Apps (Paid apps)

Pay-to-Download means to pay an upfront price to download the app. This is the oldest and most straightforward monetization strategy. Set a price and collect the money as soon as your app store takes its own share.

Only a few years ago, the majority of the apps were monetized apps in the iOS app store. In 2008, there was no sophisticated strategies to monetize apps through advertisements or in-app purchases. But today, in 2020, customer behavior has shifted and so has the market. Only a small percentage of paid apps remain.



Strategy 2: In-App Purchases

In app-purchases in one the top number one source in making revenue within the app industry. In fact, in-app purchases make up about 47 percent of the total revenue generated from apps worldwide. If you’re planning to create a free app, including an in-app marketplace is one of the best things you can do for your business.” For example, in the games “Clash of Clans”, users would be willing to purchase in-app tokens to further gain a competitive advantage over their opponent.



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Strategy 3: In-App Subscriptions

You may not want to monetize your app with pay-to-download apps or in-app purchases but there are other opportunities to charge users in the future: with in-app subscriptions. This strategy is particularly effective for games and is also seen within dating apps.

An in-app purchase monetization strategy is particularly effective for mobile games (extra lives, power-ups, in-game currency), but can also be seen in dating apps (more visible profiles, enhanced options) and other categories. When done right, in-app purchases allow both users and app publishers to win.

In-app purchases have become increasingly popular, as freemium apps are the new standard in app stores. Users like the idea of a free game, for example, with the option to spend more if they find themselves hooked on the gameplay. The numbers show that in-app purchases have been on the rise. The projected revenue for in-app purchases is expected to hit $71 billion in 2020, which is double what it was in 2018.



Reuters Digital News Report from 2018

Strategy 4: In-App Advertising

In-app advertising is a very effective monetization strategy for mobile publishers, in which app developers get paid to display advertisements within their mobile app. Not only does the app drives mobile usage but they also drive global media consumption. It is truly a vital marketing channel for brands, organizations, and agencies.

For users, the app is free to use. All that is asked in return, is to be able to show users ads that could possibly interest them and could lead to making money.

Sweet Pricing



What types of ad formats can be used?

With in-app advertising, there are tons of ways to display ads and to lure in potential customers. Pick a format that will bring you to the most revenue and build strong user experience.

What Does App Monetization Mean For Marketers?

App monetization is crucial for marketers who want to remain in a competitive field with free mobile apps while also maintaining a healthy ROI. Additionally, another benefit to this technique is an increase in user experience. Marketers can personalize ads to target a segment or users, which results in the delivery of relevant content whilst also re-engage later on. Similarly, the users who have been targeted early on in the process with personalized ads will feel values more and may continue using the app on a long-term basis. Having a free app is definitely not a barrier to gaining revenue; one must simply find an original and monetization strategy to ensure the longevity of the app's success.

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