6 Mobile App Monetization Models

by Barbara Beauregard
10/17/2016 11:36:14 AM


These days, it's never been easier for developers to create their own apps. Unfortunately, the same cannot always be said about effective monetization. 

Confronted with a saturated market and wary users, developers must carefully consider every app monetization option. Before you eagerly release your new creation, learn some of the most effective ways to acquire users and increase your ROI.

Paid Apps: 

The most straightforward model, this involves charging a direct, one-time fee to download your app from Google Play or the App Store.

  • Pros: Revenue is generated with every download. Users also tend to be more engaged with apps that cost them money.

  • Cons: It's hard to stand out from competitors, and Google and Apple take a cut from your revenue.

Free with In-App Advertising:

Fast becoming one of the more dominant models for app developers, this involves giving your app away to encourage more downloads and create a larger user base. Once you've acquired a wide number of users, you collect data and use it to sell ad space on your app.

  • Pros: You can quickly generate a big user base. You should also have no trouble selling ad space if you have a lot of users.

  • Cons: Intrusive ads can alienate users, especially if they interfere with essential functions.

Freemium: 

With this hybrid monetization model, you offer basic functionality at no cost, keeping premium functions gated behind paid access.

  • Pros: Users tend to respond positively to a “try before you buy" model.

  • Cons: Tends to work only with highly engaged users. The free portion of your product must also offer real value.

Subscription: 

Best suited to lifestyle, entertainment and news-type apps, this model places content behind a pay wall.

  • Pros: Promotes engaged users and creates a regular, ongoing revenue stream.

  • Cons: Requires regular, high-quality content creation that will entice users to maintain subscriptions.

In App Purchases: 

The biggest source of revenue in free apps, this model allows you to sell pretty much anything, as long as it seems like a logical extension of the app experience.

  • Pros: Low risk and high profit potential. Good flexibility with affiliate and partnership programs.

  • Cons: App marketplaces can take a sizable chunk from your in-app purchases. Safeguards are also necessary to prevent unauthorized and accidental purchases.

Partnerships:

With this model, you work with another business, allowing it to offer products or services in your app for a referral fee.

  • Pros: Usually well-received by users as long as the content is valuable and relevant.

  • Cons: Can be difficult to find partners with products or services that align with your users.

Things to Consider

Many times, successful monetization comes from effective trial and error. Depending on your particular app and your specific goals, you may want to test various methods to see which works best. You should also consider blending monetization models if you can do it without overwhelming or alienating users.

Additional Resources to Help Grow your Small Business

White Paper

How Mail Services Help Entrepreneurs Succeed

In today's mobile economy, digital entrepreneurs often work from varying locations. While this can help save money and increase agility, it comes with one big drawback:

Read More >
White Paper

Virtual Assistants Provide a Competitive Edge

Countless small business owners rely on remote assistants or offsite receptionists to help with critical organizational duties. While some are content to offload simple tasks to self-employed, stay-at-home support people, others demand more comprehensive services...NULL

Read More >
White Paper

Virtual Assistants & Remote Assistants: A Comparison

While the traditional virtual assistant is likely to work from home, an executive-level virtual assistant is part of a greater brick-and-mortar presence. This fundamental difference opens the door for extensive training opportunities that broaden the professional's support capabilities.

Read More >
White Paper

Overview of Virtual Offices, Executive Suites and Co-Working Spaces

Work has changed. In an age of instant communication, cloud-based applications, and workplace versatility, the era of the traditional office culture has come to an end. Providers of virtual offices, executive suites and co-working spaces have effectively liberated the nation’s work culture, adding dynamic and energizing new choices...

Read More >
White Paper

Part 1 of 4: Introducing the SBA

For entrepreneurs and small business owners, navigating the tricky terrain of creating a sound business plan, forecasting for growth and developing an operative growth strategy can be a major challenge. Fortunately, American entrepreneurs and operators have access to one of the most effective resources in the worldwide market...

Read More >
White Paper

Part 2 of 4: Starting a Small Business

Navigating the complex terrain of creating a sound business plan, forecasting for growth and developing an operative growth strategy can be a challenge for entrepreneurs and small business owners. Fortunately, American entrepreneurs have access to one of the most effective resources in the world via the Small Business Administration (SBA).
... Click to read more

Read More >
White Paper

Part 3 of 4: Managing a Small Business

Congratulations! You have gotten your small business up and running. Now what? This part of our four-part series on leveraging the Small Business Administration to help you launch and manage a small business will focus on the operational aspects of running a business. Whether you need leadership strategies, day-to-day decision making skills
... Click to read more

Read More >
White Paper

Part 4 of 4: Marketing, Sales and Contracting

Understanding marketing and sales as well as the technical complexity of our Internet-driven society gives entrepreneurs a distinct advantage over the competition. This final segment of our four-part report will take a deeper dive into the logistics and philosophy of marketing and sales and their impact on your business success.
... Click to read more

Read More >
White Paper

DIY Marketing Tools

If a business isn’t marketing, its potential customers are not finding it. Small to medium size businesses often struggle with spending hundreds of thousands of dollars on marketing. New DIY marketing tools, however, have eliminated the need to spend astronomical amounts on online and traditional marketing. These tools
... Click to read more

Read More >
White Paper

Virtual Office for Legal Professionals

Law firms (large and small) and solo legal practitioners alike can use virtual office services and spaces to run their entire legal operations or as a supplement to a home office or traditional brick-and-mortar offices. Virtual office services can be particularly useful during trial preparation
... Click to read more

Read More >
White Paper

Finance & Tax Professionals

Finance and tax professionals, whether they work solo or as part of a larger firm, can use virtual office spaces and services to stay on top of their workloads, especially during the busy tax season. Professional virtual office spaces can be particularly useful when back-to-back client meetings are necessary...

Read More >
White Paper

Traveling Entrepreneur

As business people and entrepreneurs continually strive to grow their business, doing so frequently involves traveling around the country to attend networking or tradeshow events, meeting clients and prospects on their own turf, and getting some face-time with colleagues, contractors or employees who may operate in a remote location. Preparation
... Click to read more

Read More >
White Paper

Virtual Office Eguide

Have you ever wondered why some small businesses are successful and others are not and what do these successful companies do to gain an edge over their competition? Through our years of experience
... Click to read more

Read More >