It takes hundreds, if not thousands, of hours of design, coding, and testing to create a truly great app that is ready to hit the app stores. But once the app is ready, there is still a great more deal of work to be done on the marketing end to promote an app and get it into the hands of thousands, or even millions, of users around the world.
All that time and money put into design needs to be supported somehow, yet app monetization is one of the trickiest parts of the mobile app business. A monetization strategy should fit the product, not be too intrusive, and be able to provide a steady stream of income for years into the future, if possible.
Of course the easiest mobile monetization solution is to simply charge a download fee. These days, with literally millions of apps out there, it can be incredibly risky to charge for an app because most likely, there is another similar, free app that people will just choose instead. For most developers it is much better to encourage downloads by keeping the app free and utilizing other in-app monetization techniques.
One of the most common ways to monetize apps is through hosting advertising inside the app itself. The biggest benefit of this is that the developer can earn money without actually asking the end user for money. So the app stays completely free for the user, encouraging more engagement and more downloads.
While it is possible to sell in-app ads directly to advertisers, it is much more common to work with an established mobile advertising network. They are able to provide well-targeted ads that might actually be relevant for the app’s users, as well as keep the ads from being too intrusive and disruptive of the user experience. That being said, too many ads turns people off, so they should be used sparingly, and until you build a large customer base it can be difficult to earn much money with this method.
Another extremely popular app monetization technique is offering in-app purchases. This is of course natural for retail apps where the entire goal of the app is to sell either physical products or services. However, it can also be an effective monetization tool for other kinds of apps.
Most commonly, in-app purchases are presented in what is called the ‘freemium’ model. This technique, especially popular with games, allows users to use the basic app for free, with premium content or functionality available for an additional fee. The premium content could be more levels or better weapons in a game, or it could be enhanced features like extra cloud storage space or a way to put your profile on the first page of a dating app.
It is vital that the in-app purchases feel natural and are optional ways to enhance free content. While it may be tempting to offer one free level and 49 paid ones is simply, that a bait-and-switch and will turn users off incredibly quickly. As with offering in-app ads, purchases should not detract from the core user experience.