Developers and publishers are so caught up in their idea that they hardly think about the app monetization model. And, it is especially true for start-ups and small brands that imbibe app as a key part of their business model. So, if you are a start-up owner or your app venture is at the napkin stage, you must consider below mentioned seven app monetization models:
- Price of the App
One of the most common ways to make money is to sell it on the App store. Apple App Store’s price ranges from $.99 to $999.99. And, both Apple & Google take 30% of the total price. But they have pretty nice payment system. According to which, they deposit the funds directly into developer’s bank account.
- In-App Purchases
In-app purchase has become one of the common features of many app. And, for a free app it allows users to:
- Unlock features
- Buy subscriptions
- Purchase virtual goods/items
- And, buy additional content
In-app purchase has become so popular among users that if you check the top grossing apps on the Apple App Store, the top 30 apps are free and offering in-app purchases.
- Mobile Advertising
Mobile advertising is expected to reach $100 billion in 2016. Basically, there are 6 mobile advertising models and we’ll discuss them in our next article.
Essentially, if you develop an app that meets a business challenge, you can have its license. The best example of it is – event apps. Mobile app development companies that work on event app typically charge a set-up fee and a monthly subscription. And, they follow a SaaS (Software as a Service) model.
- Enhancing the Business Process
By effectively implementing a mobile app, you can substantially enhance the business value and revenue. One of the examples for enhancing the business process is Fandango. According to reports – their revenue has increased by 57% after they released their mobile app in 2012. Start-ups and small existing brands are adopting a native app strategy to improve their business process in order to increase revenue and value.
- Delivering a user-centric service to its users
Uber is an exceptional example of service delivery via a mobile app. In the year 2015, Uber’s revenue was estimated approx. $1.5 billion and they currently have an approx. value of $62.5 billion. Other examples of delivering user-centric services via a mobile app are TaskRabbit & Doctors on Demand. Essentially, a successful app model involves right connection of a resource to a demand, to easily handle the transaction, and then taking a percentage of that transaction.
- User Acquisition
User retention and user acquisition is one of the key factors for developers and publishers today. If you look at WhatsApp or Instagram, they had no revenue model before they were acquired. But what they had – is a huge pool of users. At the time of their acquisition, WhatsApp had around 600 million users and Instagram had around 30 million users. The strategy they followed was to apparently acquire and then retain a pool of users. And, as we all know that WhatsApp was acquired for $19 billion and Instagram for $1 billion. Without having a sound revenue model they reached this level of success just only because of its users.
Are you planning to have a mobile app in future or you already have an app? And, you are not sure what app monetization should you choose? – Parangat can help you in choosing the right monetization model and properly implementing within your app.