All app publishers want to get their money’s worth by mapping the right mobile app monetization strategy. Success of an app on the market depends on so many factors, that one may write a whole book in the effort to analyze everything that influences this challenging process. We focused on app monetization process in terms of app distribution channels and whether a new app should be launched to one market or across multiple platforms and classical making money schemes + paid apps pros, cons and what your app can gain from it.
App Store success is taken for granted because it is reliable and trustworthy. 93% of all the applications on the market get downloaded monthly. The most important reason for its financial success, whether developers like it or not, is Apple’s tortuous approval process. Google Play beat AppStore in size but not in revenue.
Even though Android has won the market with their numerous devices, apps developed for iOS make more money. To cut a long story short, not all that glitters for a user is gold for a developer. According to App Annie Index – Market Q2 2013, apps downloads in Google Play were about 10% higher than those in the iOS App Store. Although Google Play led the iOS App Store in this key measure, there still remains a wide gap in app monetization between the platforms. iOS App Store generated 2.3x the app revenue of Google Play.
Those two big monsters are not the only ones. Other popular brands are Blackberry, Amazon and Microsoft.
What is good about Blackberry?
Blackberry offered a $10,000 revenue guarantee to any app maker that sold at least $1,000 worth of apps. To add more, incentives like 80% cut of revenue from each sale, support for PayPal billing, keyword searches, and other changes may draw developers’ attention to this market.
What is good about Amazon?
The mobile analytics firm Flurry said the Amazon Appstore is nearly on par with the Apple App Store in generating revenue for developers, but it’s much smaller. Amazon Appstore, unlike Google Play, lets you put your paid app free for some time and then come back to a paid version + they have their own Free App of The Day promotion.
What is good about Microsoft?
Windows Phone Store has a $99 registration fee. But Microsoft has upped to 100 the number of free apps that companies can submit without paying another $19.99 per app. Microsoft does not charge for submitting paid apps + they are well-tested. When the app gets successfully sold on the mainstream markets it may also be a good idea to cover the third party venues in order to maximize the profit.
Outside the mainstream
Among the best ones, you may consider stores like GetJar, F-Droid and SlideME, Appoke, Handango (Pocketgear) and MobiHand. They have their pros and cons. The biggest concern here is malware and security policy. So don’t jump to conclusions and make sure you weigh all the risks and make the right choice. AppStore is likely to bring you money, compared to Google Play. You can try both at the same time + other markets if you are a big fan of the saying “the more the better”. Your app is new and green, nobody knows about it and you have “0" metrics data. Do you want to cover all the markets from the start? What’s the point?
After our Event Countdown app called My Day had been launched to App Store it got many downloads within a short period of time. However, after half a year all the users suddenly disappeared leaving us with 1% of retention rate and food for reflection.
In order to gain customers again, we had to consider users experience, retention, engagement, and other metrics to optimize and improve our app. With all the work that had been done My Day reached 45% of retention and is already on Google Play. A large number of downloads doesn’t matter anything as 69% of users — according to the SessionM study — will never visit it again. So instead of focusing on the vanity metrics, it is most important to find out who your loyal users are and study their interaction and engagement with your app. The reasonable approach for making profit and minimizing risks looks like this:
Choose one market > collect the metrics > analyze > improve > iterate, iterate, iterate > win other markets
Read also: Best mobile analytics tools for your app
Classical Mobile App Monetization Strategies
Once the place to sell an app is picked, the next question on the path to monetization is how to choose the right business model. We outlined the most common ones.
“The mobile app ecosystem is steadily trending to a point where the free mobile app is the rule, rather than the exception,” said Mark Stetler, the CEO of AppMuse. Free apps currently amount to about 60-80 % of the total available apps in Apple’s App Store and Google Play respectively.
Freemium app monetization scheme: you give users basic app functionality for free and use in-app purchase as a method of monetization. By far and large it is the most profitable model. But the features you make the user pay for should bring value to them.
It is not very common in the app world but still exists for some really unique apps or high-budget games. Paid download is not advisable for Android because this market has a lot of pirated apps and big competition. You also run the risk of chargebacks, which does not cause any trouble for a user to do.
This app monetization strategy requires regular content or a service valuable for users and charges weekly, monthly or annual subscription fees. This way of earning money will take a long time as you need to learn about your audience and collect the data they would be interested in. Developers can learn some lessons from an iPad-only subscription news app The Daily’s. “Don’t ignore the Web, don’t make your content platform-specific — unless it is unique — and don’t put a paywall around something no one has ever seen before,” said Mathew Ingram on GigaOm.
In-app ads or Advertising model
You build an advertising space into a product and sell it to brands whose production appeals to the app’s target audience. The “old school” approach to mobile apps which means “data first, it doesn’t matter who the users are and how they get engaged with the app” and “CPM banners – stick and hope for a click” is becoming less efficient and overestimated. Even using CPA networks (like Flurry, Tapjoy, Nativex + of course Google and Apple), which sell app downloads has freed up its place for a “new school”, which creates native to the app ad experience by means of getting a detailed knowledge about a loyal user and becoming an essential part of the product. These ads create quality and improve the user experience. Eventually loyal to the app audience will be exposed to more ad content.
Paid apps issues
Unless your app is unique and applicable for a definite sphere of business, it’s not a good idea to even try to use a premium monetization model, especially in the Android Market. Even though the cost for the app download is often low, customers are not really willing to buy stuff without being sure they totally need it. Dave Addey, who runs an app development studio in the UK even wrote a whole article headlined “ Apps are too cheap.
By putting a price tag on the app, you may run the risk of the users rating it harshly, in case they find any flaws in it. There is always a chance that a user may like your app as to want to buy it. Otherwise, you should look into newly invented devices and markets that have enough space for new ideas and customers.