Business objectives drive the best choices every business owner makes.
At least, owners wanting to make money in the real world look to their business objectives when deciding how to take products to market.
Mobile app monetization represents one such choice that all app developers must make. Have you thought that through for your app?
Of course, you may have embarked on developing an app just because you love mobile technologies, and wanted to make your mark among tech peers.
If that’s the case, then good luck to you!
But if your objectives include earning your share of the projected $101 billion (with a B) app store revenue, then you owe it to yourself to learn more about mobile app monetization.
Let’s look at mobile app monetization models — and how to monetize your app without breaking the bank — by choosing the right business partner.
Considerations for Mobile App Monetization
Several models exist that support mobile app monetization. Which one is right for you? You may want to know which monetization model drives the most revenue, but no simple answer exists.
What really matters is that the monetization model you choose best suits your app. It needs to support your revenue and user adoption objectives — along with the product or service you’re taking to market.
Before you can choose the right answer for your business, it pays to be sure you’ve done the right marketing analysis. Such as:
- Who is your target audience? Determine their demographics and app usage patterns. Do they prefer video or perhaps written content consumption? Align your choices with the behaviors of your target market.
- Your Core Set of Users Includes ___? The most successful apps address a specific user pain-point. That’s a Marketing 101 truism. Yet many business owners overlook that solving a problem — aka providing value — for specific users generates profitability.
- Choose the mobile app monetization strategy which rewards match your app’s user value. Simply put, the more value provided by the app, the more users will be willing to pay.
Choose Among Mobile App Monetization Models
Pay Per Download: This is perhaps the most common approach to generating revenues with an app. But how do you convince a new user to pay the price you demand without letting them to try it first? If you can’t market your app as truly unique — compared to all the free apps out there — keep looking. Great marketing and PR are imperative with this model
Advertising App Monetization Model: You’ll find more people willing to download your app with no cost barrier (as in pay per download apps). The advertising model offers several “flavors.” It’s often used in mixed-model approaches. Common ad formats currently include:
- Banner Ads
- Native Advertising
- Video Ads
- Voice Ads
- Interstitial Ads
- Rich Media Ads
- Location-Based Ads
- Pop-Up Ads
- Notification Ads
Choose the advertising app monetization model if you expect users to visit the app frequently, and stay awhile during each session. You’ll also need to collect user demographic and behavioral data to ensure ads are relevant.
In-App Purchase Monetization Model: Do you plan to sell virtual or physical goods or services from your app? This model works well for retail, gaming, or services apps. It’s been the top mobile app monetization strategy used by high-earning game apps. Be sure to include well-designed purchase incentives that don’t spoil the user experience.
Freemium App Monetization Model: This strange-sounding model replicates the subscription model used in many ecommerce businesses. If you can attract free users, and then entice them with super-unique premium features, choose the freemium app monetization model. The 30 top grossing apps in the Apple App Store may be downloaded for free, but they all offer desirable premium content for a fee.
Subscription or Paywall Model: This app monetization model is similar to Freemium, but content is locked, not premium app features. Users are able to view a specific amount of content for free, but then must subscribe to the app to view more. Service-oriented apps succeed with this model (think Netflix or Spotify). The Subscription or Paywall model works well when the app itself inspires repeated — and frequent — use.
The bottom line is to choose the mobile app monetization model that fits your objectives, and the analysis of your target market. In-App Purchases and Subscription models continue to be most successful at driving revenue (33% and 22% respectively), according to a recent study by Apptentive. But a hybrid approach may be best for your app. Let objectives drive the choice.
Put a Cherry on Top with PayArc
Regardless of which mobile app monetization model you choose, your business definitely requires the right payment processing capabilities. They provide the cherry on top when you go to market!
Because, if you cannot accept payments via your app, then dreams of monetization go out the window. Be sure to choose a processor with a mobile app payment gateway optimized for your success. Choose PayArc.
Our mission is to bridge the gap between online merchants and payment solutions — for all types and sizes of merchants and app developers.
PayArc provides merchants with the latest technology and pay options allowing them to focus on growing their businesses. And PayArc’s mobile SDK makes it easy to integrate mobile payment solutions into your app.
Our industry leading payment processing solution gives you all the tools you need to start accepting payments while lowering your risk to fraud and giving you some of the lowest rates in the industry.
PayArc wants to act as your payments advisor and consultant, not only your processor. Because you have a business to run… Our business is to help you run it better. Put the cherry on top… Start processing with PayArc today.