Hundreds of thousands of apps circulate the iOS and Android markets, each trying to prove their worth to increasingly picky app users. It’s enough of a challenge to cut through the clutter (though we have some good ideas of how to do that) and get a user to download your app, but most organizations also need to monetize. While there are a few ways to generate revenue, the most effective method is one that plays to the unique content, design, and audience of your particular app. Here are some tips to create a winning app monetization strategy:
In other words, what are you bringing to the app table? If you’re a gaming app, ideally you’re bringing hours of entertainment to those who are smart enough to download your app. If you’re a news app, your content is king and users will be treated to engaging articles and news. You get the picture. Knowing what value you offer users lets you decide which monetization path (or paths) is right for your app, because you’ll know which parts of your app users will pay for or expect to be advertising grounds.
For example, a social media app delivers a somewhat intangible “engagement” experience for users that has proven to be addictive (I hear Facebook is worth a large chunk of money). While this means users will want to check in several times each day, even avid users wouldn’t consider paying money to download the app. Social media apps benefit from a ton of user preference and interest data that can be used to personalize ads which most users will see at several different points in a given day. For this type of app, unobtrusive, highly relevant advertising based on user behavior and profile information is the best monetization strategy.
You may have a killer app, but you can still end up trying to monetize in ways that ask too much of your users or miss opportunities to cash in on great features. Further, two apps within the same segment or category could have two different audiences and therefore require unique monetization approaches. In the same way that a premium goods manufacturer like Louis Vuitton wouldn’t market to dollar-store shoppers, your app monetization strategy should be tailored to your user base.
For example, Robb Report knows its reader base can easily afford a magazine subscription in addition to an app subscription. Putting a pay wall between users and full article content will prompt most users to pay for a subscription, probably without hesitation. Conversely, if Buzzfeed was to use a pay wall monetization strategy, they would lose many users who are familiar with free website content.
It’s a question you, as the developer or app marketer, should have asked yourself a thousand times as you were building your app: “What am I trying to get out of this project?” Whether your organization is limited to the app ecosystem or you’re a Fortune 500 company with hundreds of initiatives, clarifying your business goals as they relate to the app is essential to constructing a monetization strategy.
For example, travel companies have probably woken up to the concept that mobile bookings are surging. While many travel itineraries are constructed and booked online, mobile apps have begun to add a layer to the exploration process. While consumers might shy away from paying for and expensive three-week vacation on a mobile app, the accessibility of apps can allow users to discover and save interesting options for future travel while on the go. In this case, the monetization strategy won’t focus on in-app purchases, but rather on the interplay between mobile and web. Tee up the trip via app, and score the booking via web.
Whether you’re charging for app downloads or offering the complete app for free, with all revenue coming from ads, the best way to make users feel most comfortable with spending money on your app is to be transparent. You could have the coolest app on the market, but if users feel conned by your monetization strategy, they’ll ditch your app in a hurry - and they won’t go quietly. For any monetization strategy, being honest about what’s free and what’s “pay-to-play” in your app as early on in the user experience as possible will let users grow into the idea of spending money on something they really enjoy.
What app monetization strategy has worked best for you, and how did you get there?
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