Revenue generated by mobile
apps has been growing exponentially. Revenues from paid apps will be $195
billion while that from in-app purchases is forecasted to be $289 billion in
2017. Still, 54% of that revenue will be claimed by 2% of the apps. Choosing
the right monetization channel is essential to be on top of this hierarchy. The
right revenue model for an app depends on the user engagement, type of app and
expense needed for marketing. Take a look at various revenue models used by Windows,
Android and iOS mobile app developers to make money.
In-App Advertising
Selling ad space in
the mobile app is one of the most common methods to generate revenue. This
allows Windows, Android and iOS mobile app developers to offer free apps. The
lack of cost barrier helps in acquiring larger user base which is targeted by
advertisers. These free to download apps possess information regarding user
location and behavior which is in great
demand for marketers. Availability of such information and the willingness
among advertisers to pay for it makes this model sustainable and popular among
developers.
Even though free apps
bring more users, ads can compromise user experience and design which can
become a roadblock to scaling the app further. Also, this model doesn’t work with utility apps
whose USP is user experience. However, targeted and limited in-app advertising
can bring revenues without compromising on user experience.
Freemium
In Freemium model, the
Windows, Android and iOS apps offer
free as well as paid features. Free features help in acquiring users and bring
user engagement. Certain additional features cost money to be unlocked. The
large user base allows more prospects of purchase of extra features. This
combination of lead generation and sale conversion suits game, entertainment and
productivity apps.
The developer should
ensure that free features aren’t
inferior and strike the right balance between free and paid features to reduce
rejection rate and also to give adequate incentive to buy extra features.
Paid Windows, Android and iOS apps
Paid App model helps
developers get upfront revenue. A paid app which can cost between $0.99 and
$999.99 needs to convince its users that it is worth paying than using free
substitutes. It can do so by selling its unique features and functionalities,
that free apps cannot offer.
This model allows Windows,
Android and iOS mobile app developers to bring more innovative features to the
mobile app with cleaner interface for their users. The user base for such apps
is small but more engaged than regular users. However, Paid apps have to endure
stiff competition from their free alternatives and also forego part of their
revenue to the app store.
In-App purchases
In this model, the Windows,
Android and iOS apps act as a sales
channel for either physical goods like clothes and accessories or virtual goods
like mobile game currency or extra lives, which brings engagement from the
users. When it comes to revenue, this model brings comfortable profit with less
risk. It is especially suitable for e-commerce which can earn higher margin
than their brick and mortar stores. It is to be noted though that app stores
take a share from the revenue earned by
selling virtual products.
Subscription
This model is similar
to freemium as it offers free predetermined content and offers paid
subscription for premium content worth paying, often with free trial. This brings user loyalty and engagement,
and continual revenue to the mobile app developers. This monetization model
suits news, lifestyle and entertainment apps.
Partnership
with Advertisers
In this model,
advertisers reward Windows, Android and iOS apps users for certain in-app
action and the app earns a small share of the redeemed reward. This ad-free
model brings revenue as well as user engagement and satisfies mobile app developers,
advertisers and users alike. This model is however relatively new and less
tested.
All these revenue models
are not mutually exclusive but can be used depending on the user segment the
app targets. It is very common for freemium apps, for example, to use
advertisements for the free version and offer paid ad-free versions of the app.
Twistfuture
Software Pvt. Ltd. is a Mobileapp development company in India which specializes
in Android App development, iPhone App development, Windows App development, MobileGames development, Unity 3D development, Multiplayer Games development, Casino
Games development, and more. Get the Windows, Android and iOS Mobile App from
TwistFuture and monetize it using the revenue model that suits your app.
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