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Mobile App Monetization Strategies – Crack the Code in 2024

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Calibraint

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December 22, 2023

mobile app monetization strategies for 2024

Mobile apps are the modern-day genie in a bottle that grants the wish of enhanced brand visibility for businesses. Craving for deeper customer engagement and better ROI? Abracadabra! Poof! It grants you the wish! Just like that, but with a catch, A CATCH. 

To succeed in the mobile app market, app developers and businesses need to understand the mobile app monetization strategies, current trends, challenges, and opportunities in the industry.

According to a report on Milionsights, the global mobile app market is projected to attain $756 billion by 2027 at a CAGR of 11.5%. Several reports from reputed sources also show projections with high numbers for mobile apps in the upcoming years. These numbers show that the mobile app market is growing rapidly and has a huge potential for app developers and businesses. 

Importance of having Mobile App Monetization Strategies

Having a clear monetization strategy is an important aspect of mobile app development for a business. It supports the business in several ways, primarily helping it to achieve several goals. There are many monetization strategies to choose from, depending on the type, purpose, and target audience of the app. Monetization can also help the business measure the performance and success of the app, by using various metrics and indicators, such as: 

  • Revenue 
  • Average revenue per user (ARPU) 
  • Lifetime value (LTV) 
  • Return on investment (ROI)  

metrics to measure mobile app monetization

Common and Effective Mobile Apps Monetization Strategies

In-app advertising:

In-app advertising involves displaying ads such as banner ads, video ads, or native ads within the app. The revenue earned will be based on the number of impressions or clicks. This strategy is suitable for apps that have a large and active user base, and that can provide relevant and non-intrusive ads to the users. Almost every popular social media app in the market follows this strategy to gain revenue.

In-app purchases:

Remember that time when you wanted to continue playing your favorite game even after you lost and it asked for the premium items to trade in which you never had? That’s what in-app purchases are all about. It’s a strategy that involves offering users the option to buy additional items, features, or services within the app, such as virtual goods, premium content, or extra functionality.

This strategy is tailor-made for apps that can provide value and engagement to the users. These apps are highly capable of creating a sense of scarcity or urgency for the users to make purchases.

Subscriptions:

Subscription strategy is nothing but offering users access to the app or some of its features or content for a recurring fee, usually monthly or yearly. It will be used by apps that can provide consistent and high-quality value and service to the users, and that can retain and grow their user base over time. Spotify was recently in the news for locking several features behind a paywall which is one of the ideal examples of this strategy.

Freemium:

This strategy involves offering users a free version of the app with limited features or content, and a paid version with full or enhanced features or content. This strategy is suitable for apps that can demonstrate the value and benefits of the paid version to the users, and that can convert a significant portion of the free users to the paid users. For example, Spotify uses freemium to monetize its music app.

Data monetization:

Data is in high demand nowadays and quality data is very scarce. Data monetization is the ideal strategy to bridge the existing gap as it involves collecting, analyzing, and selling user data to third parties, such as advertisers, marketers, or researchers.

Despite having several controversies around collecting user data, this strategy is being used by apps that can collect a large amount of valuable and relevant data from users.

Sponsorships:

Partnering with a sponsor (such as a brand, a company, or an organization) that pays a fixed amount to promote their products, services, or causes within the app is all about sponsorships. This strategy is suitable for apps or influencers with a niche and loyal user base. Sponsorships will help bring in a positive and natural association from the target audience.

Reverse monetization:

As the name suggests, it involves paying the users to use the app or perform certain actions within the app, such as watching ads, completing surveys, or referring friends. This strategy is suitable for apps that can attract and retain a large number of users, and that can generate revenue from other sources, such as advertising or data monetization.

Common Monetization Models with Mobile Applications

Monetization models are the types of revenue generation methods that app developers and businesses can use for their mobile apps. There are various monetization models available, each with its own advantages and disadvantages. Here are some of the most common and effective monetization models that you should know about –

Cost per install (CPI):

CPI involves charging advertisers for each installation of their app by users who have seen their ads. This model is suitable for apps that want to increase their user base and visibility, and that can provide high-quality and engaging apps.

Cost per click (CPC):

CPC is one of the popular models out there. It works on the basis of charging advertisers for each click on their ads by users. Apps that want to generate traffic and leads for their advertisers, and that can provide relevant and targeted ads use this model.

Cost per action (CPA):

This model involves charging advertisers for each specific action performed by users after clicking on their ads, such as registering, subscribing, purchasing, etc. It will be ideal for apps that want to generate conversions and sales for their advertisers, and that can provide high-value and incentivized ads. For example, Tapjoy is a platform that offers CPA campaigns for mobile games.

Cost per view (CPV):

CPV is about charging advertisers for each view of their video ads by users. This model is suitable for apps that want to increase their brand awareness and recognition, and that can provide engaging and immersive video ads. For example, Vungle is a platform that offers CPV campaigns for mobile games.

Conclusion

Navigating the landscape of mobile app monetization strategies can be challenging, with a plethora of avenues vying for your attention. However, understanding the unique needs of your app, target audience, and market trends is crucial to finding the perfect fit.

By carefully analyzing your app’s potential and strategically implementing a monetization model that aligns with your goals, you can unlock its earning potential and achieve sustainable growth in the ever-evolving mobile app market.

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