Developing and marketing a great app takes resources. When it's time to launch your product, you need to make an important calculation: How much should I sell it for, and how will that affect my ability to recoup my costs over time? Offering an app for free will make it more attractive to users, but unless you plan on taking a loss on the project, it requires that you generate additional revenue elsewhere.
That's where app monetization comes in. Monetization is the process of creating new revenue streams once a user has downloaded and installed your app. Here's how it works.
The possibilities for monetizing a successful app are virtually limitless. Some of the most popular ways to generate additional revenue from a product include:
In-app advertising is an obvious form of monetization. If you have a large user base and can integrate ads into your app in an unobtrusive way, selling ad space opens up a potentially lucrative revenue stream.
A sponsorship is an alternative to native advertising that promotes meaningful collaboration between brands. With a sponsorship, you have more of a say in who you work with, which makes it easier to choose partners that reflect your values and the interests of your users.
Not all apps can upsell additional purchases, but if it's a possibility for your product, in-app sales are an excellent way to monetize. In-app sales are fast and convenient, too. With the touch of a button, users can buy new features, often for a small cost.
Instead of, or in addition to, encouraging in-app purchases, you can offer a premium version of your app with enhanced features or an ad-free experience. This is an attractive option for anyone who prefers paying a one-time fee over making ongoing smaller purchases as they use your product or service.
User data sales are controversial. But when done with transparency, they can be a way to monetize your app — so long as you are open with your customers and don't violate applicable privacy laws.
White labeling is a little like franchising your app — you sell the core program to another company who applies their branding to it. This allows organizations to save on development costs and get a model that works. However, it does introduce new competition into your app ecosystem.
When developing a mobile app monetization strategy, it's always important to balance the user's experience with your own revenue generation needs. Using a variety of tools, rather than leaning too heavily on one option, will minimize the overall impact on your product and its users.
App monetization is a complex topic, and one that is continuously evolving as companies explore new ways of doing business. When you work with Los Angeles-based Wve Labs, you are choosing a partner that's committed to staying ahead of the curve. We help clients in a range of industries develop app monetization strategies that maximize their ROI. To learn more about your options, or for help with any stage of an app development or marketing project, contact us today.