Chances are you have asked one or more of these critical questions: Why should my business have a mobile application? What is its Return on Investment? If you have the correct answers to these questions, you are either a mobile app developer or someone that understands how the mobile industry works. If you don’t, this is an opportunity for you.
Mobile applications, which many simply refer to as ‘apps,’ have become an integral part of our mobile device experience. Whether it is a social media app, an e-retail shopping app, or an app that helps with productivity, the mobile screen has become all about apps. According to statista.com, as of July 2015 there were 1.6 million apps on the Google Play Store and 340,000 in the Windows Phone store, and more than 100 billion mobile apps had been cumulatively downloaded from the Apple App Store.
However, this does not mean that every business has to start developing apps even when there is no reason to. There are some facts to consider before you jump unto the phenomenon. Different users want different apps for different reasons. The concepts of usefulness, relevance and speed should be considered in the context of the current situation of any business. But, this is story for another day.
If all key areas have been considered and there is clarity about having a mobile app, I’m speaking to you today.
There are a number of options available for monetizing apps. It is important to have a clear understanding of the monetization model to be adopted from the beginning. Whether you decide on a free or paid monetization model, there is a viable stream of income from them. I will focus on free apps and highlight 3 ways they can be monetized:
1. The Freemium Upsell: Do you have a free app on your phone that requires you to upgrade for a fee to enjoy some locked features or stop seeing ads? Then you understand the freemium upsell model. Freemium – a term coined from “free” and “premium” simply means that users will be able to download the applications from the app store at no cost but will be restricted to having full access to its content. Proven to be the most effective strategy to monetize app, mobile application owners can eat their cake and have it. Free users are served with ads and have limited access to some features and when they want more, they upgrade and pay the premium price. This ensures there is a constant stream of revenue no matter how the users decide to swing. While some apps have forever free features, others have a trial period.
2 .In-App Purchase (IAP): This is a purchase made inside a free app that has been downloaded from an app store. By allowing users to unlock features or purchase additional content or services, IAP can be set to be one time only or an ongoing option. This can be in form of game coins – Bought to proceed to another level while playing a game, extra level to get to the end of a game quickly, custom background themes or even monthly subscription for the application, among others.
To ensure that this model is successful, the app must be engaging and the implementation must be done correctly. Implemented wrongly, it can lead to bad reviews from customer and in extreme cases, the app may be boycotted by users or removed from the app stores.
3. Advertising: This is the most common one. We all have that free app that displays an advert anytime it is opened or we interact with it. The success of this is by a considerable amount of traffic. Once the traffic is constant, in-app advertising can serve as a constant stream of income. It is, however, also important to note that the adverts have to be integrated in such a way that it does not disturb the user.
All these monetization models can be achieved by becoming a publisher to an Ad network like Twinpine. On integration, the ads link to the advertisers landing page. However, the way to achieve a sustainable growth is through repeated transactions from existing partners – advertisers or users. The most successful app stories starts with a well thought out revenue model and a great developer.