Google Play Store and the Apple App Store are filled with thousands of apps. Even though most apps are free to use, especially for the basic features, others require the users to spend money.
It is where app monetization comes in. App developers generally monetize their apps to generate revenues from the app user base. Numerous app monetization strategies can be used to generate revenue. However, it is only with the right app monetization strategy that the developers can convert the free users into paid users.
How To Choose The Right App Monetization Model?
Choosing the right app monetization model starts with a thorough analysis of the target audience. For instance, a certain section of users will happily pay for an app for its features. However, others will not, and in such a scenario, the app developer might be required to engage in in-app advertising of 2D Lotto or other products and services of the advertisers.
Also, the monetization model that you choose for the app should keep the user experience smooth and, further, should complement the UX. Another important thing that an app developer should consider is the financial investment that will have to be made to implement the app monetization strategy. Now that we know how to choose the right app monetization strategy, let us look at the different monetization models available.
1. Freemium Subscription Model
It is the most popular app monetization model right now. In this model, the app developers provide the users with free features and a set of paid features. The idea behind this strategy is that the users get to see how the app works for them. Once they are satisfied with the features of the app, they might pay for the paid app.
However, to ensure that the freemium subscription model is a success, the app developers should maintain a delicate balance for the features that the free version of the app offers. It should be enough for the users to crave more but not so much that they do not need to buy a premium plan.
2. In-App Purchases
In-app purchases are similar to the freemium subscription model in a way as both offer the users a certain set of free features. The key difference between in-app purchases and the freemium subscription model is that in-app purchases happen once, whereas the freemium subscription model is an ongoing process.
For example, an app that shows Lotto Result running on a freemium subscription model will regularly earn money from the subscription. On the other hand, if it runs on an in-app purchase model, the revenue for the app developers becomes unpredictable due to its one-time purchase model. However, in-app purchases work best for gaming apps.
3. Paid Apps
Sometimes the apps offer such a high value that it does not need to support a free version to gain popularity. The developers of such apps prefer to go for paid apps directly and charge their users upfront. It is a monetization method that only works for extremely high-quality apps.
The advantage of the paid app model is that the developers clearly know the revenue each download will generate. However, it also needs to be noted that sometimes people do not consider the app quality and avoid paying for the app at the first encounter.
4. In-App Advertising
In this app monetization model, the app developers do not collect money from the users. Instead of the users, the app developers charge the money from the advertisers who want to show their ads to the user base of the apps. It is, therefore, obvious that to engage in an in-app advertising model, the app needs to have a large user base. The only downfall of this monetization strategy is that it can spoil the user experience.
Therefore, while engaging in in-app advertising models, it becomes crucial for the developers to ensure that the apps are not intrusive and spoil the user experience. Surveys have indicated that one in every two apps that engage in in-app advertising face uninstallation within a month by the users due to the frequency of the ads shown to them.
All these app monetization models come with their own sets of positives and negatives. We have already discussed how you should choose the app monetization balance. Remember, balance is the key in all monetization models.