Are you considering developing a mobile app for your business but unsure if it’s a sound investment?
You’re not alone. More than 40% of small businesses have a mobile app, and that number is only expected to grow.
These businesses have a variety of compelling reasons for turning to apps, including providing a better customer experience, increasing sales, and staying competitive in the market.
Others, however, have the goal of developing an app as an additional revenue stream.
Of course, while we’d all like to develop the next billion dollar app, competition is fierce. As of 2017, there are some 2.8 million apps in the Android App Store and 2.2 million in Apple’s App Store.
In this guide, we explore two popular mobile app monetization strategies:
Learn what these mobile app monetization strategies entail and how to choose the best fit for your business’s mobile app.
Step 1: Define Goals for Monetizing Your Mobile App
Before deciding how to make money with your mobile app, clearly define the goals for your app by asking yourself 3 questions:
- What is your mobile app’s value proposition?
- What are your competitors doing?
- How will you acquire app users?
What Is Your Mobile App’s Value Proposition?
Defining a strong value proposition is key to monetizing your app.
What problems do your users have? How does your app solve them?
Your value proposition says how your app benefits users, not which features it offers.
For example, project management app Trello’s value proposition says, “Trello gives you perspective over all your projects, at work and at home.”
Focusing on the value of the Trello app shows users how they can incorporate it into their daily lives. This approach is more beneficial than focusing on features: “We’re the best project management tool in the app store.”
What Are Your App Competitors Doing?
Studying your competitors’ app offerings may reveal how you can differentiate your app: features, value proposition, and monetization model.
Do your competitors have apps? What monetization model are they using?
For example, if reviewers on your competitors’ app complain about spammy ads, that’s a sign that you could offer a better user experience with a different monetization method.
How Will You Acquire App Users?
Defining your user acquisition strategy is a key step in generating revenue with your app.
A survey of app development firms from around the world recommends using social media (37%), paid advertising (28%), and app store optimization (ASO) (21%) to attract app users.
A plan to market your app and attract new users likely will include a combination of marketing tactics such as ASO and social media or advertising and incentives such as rewards or points.
Step 2: Choose A Mobile App Monetization Model
App user’s today are increasingly unlikely to pay for apps: Only 33% of mobile users paid for an app in 2017.
Making money with a mobile app used to be simple: You had free apps with ads and paid apps without ads.
But, as in-app advertising falls out of favor, what methods for app monetization can you pursue?
Below, we explore three of the most popular app monetization strategies:
- In-app advertising
- “Freemium” mobile apps
- Premium mobile apps
- Subscription-based apps
This example of a native advertisement integrates smoothly with the content on Kayak’s app — flights, car rentals, and hotels. An ad for Airbnb is relevant to a user searching for travel deals.
However, if you pursue in-app advertising to monetize your app, remember to keep the user experience in mind.
Choose a trusted mobile ad network that can help you avoid user drop-off and find success with in-app advertisements.
Freemium mobile apps allow users to preview what your business offers without any upfront investment.