How to monetize your mobile app

The global mobile app market was valued at over $154 billion in 2019 and is expected to reach over $407 billion by 2026. The astronomical growth of the market makes sense when considering the behavior of apps. People turn to apps to carry out their daily activities, whether it’s reading the newspaper, dating, banking, shopping or even creating to-do lists. .

Smartphone users around the world are spending more time than ever on mobile devices. It is estimated that American adults spend more than four hours on the mobile Internet, with the vast majority of this activity occurring within apps.

However, the barrier to entry into the mobile app market is not negligible, with the average cost to develop and launch an app estimated at $270,000. Even more daunting, the majority of mobile apps won’t hit a thousand downloads, and those that do won’t necessarily pay off.

In 2022, mobile apps can live on their own, as is the case with many mobile games, or they can be a key channel in brand marketing and sales, fulfilling omnichannel consumer expectations for s engage and purchase easily on various platforms.

Whatever your app’s goal, with so much at stake, it’s important to have a clear strategy. Let’s see how to monetize your mobile application.

Understand what you can monetize

As app stores and consumers evolve, it’s important to understand the nuances and the different channels that drive revenue.

Of course, the most obvious ways to monetize an app are through in-app purchases or just a paid download model. But there are plenty of other methods to consider – and often these other strategies can be more beneficial.

The subscription model is becoming increasingly popular, in-app advertisements keep the product free for customers, and premium versions of apps can generate revenue while providing unique benefits to the user.

With a large enough user base, referral opportunities are another way to go, usually implemented through a splash screen upon opening an app.

In-app purchases are an extremely popular and successful monetization technique. Users pay real money for digital items like coins, outfits, boosters, and even just to disable ads for good, or just for a certain period of time. Pokemon Go generated over $2 billion in in-app purchases in the first two years of its launch.

A “freemium” model is also a popular approach where all application capabilities are locked in by a paywall. Often the freemium model is combined with in-app advertising, so even free users generate revenue and it’s an added annoyance to encourage an upgrade. To access premium features, users must upgrade to a paid version, sometimes a subscription.

Get the most out of your ad inventory

The anticipated concept of header bidding, which allows customers to simultaneously collect bids from multiple sources of demand, has been in beta for years and the benefits are finally being realized by early adopters.

“Header bidding for mobile apps is getting sophisticated and actionable, after a while in beta,” says Debra Fleenor, president of Adapex. “At a fundamental level, header bidding simply increases the competition for your inventory, which increases the revenue you earn for the same inventory.”

“There is also a technical reason to adopt header bidding,” continues Fleenor. “Your header bidding platform should have done the job of aggregating demand partners for your ad inventory, which means it should be a one-stop-shop rather than forcing many SDK implementations of your development team.”

In other words, header bidding can reduce the cost of carrying your ad inventory while simultaneously increasing your revenue.

Consider the needs of your advertisers

It may sound intuitive, but marketing the value proposition of your ad inventory is essential for your advertisers to understand important metrics for their campaigns, such as your users’ demographic and geographic information.

“When you clearly state your parameters in the ad request, it will make your inventory more attractive,” continues Fleenor. “You also want to make it as easy as possible for your advertisers to track your ad viewability so they can get the full picture of how your ads are impacting their business.” You can do this by implementing an Open Measurement SDK.

Finally, make sure your technology solution takes steps to fight ad fraud and own their data. “It’s important to focus on advertising solutions that prioritize first-party data,” says Fleenor. “We’re embarking on a cookie-free future, which means the ability to personalize ads based on key data is at risk if you don’t partner with partners who take first-party data seriously.”

Although the advertising opportunities in the app are high, it is crucial to ensure that you are on the right track for monetization. Understand the app monetization landscape and adopt a model that makes sense for your business. Remember to put yourself in the shoes of your ad partners to make it easy for them to justify their spending. Finally, look for partners who solve future problems, so your app monetization strategy is relevant even as the regulatory landscape changes.