Having a strong marketing strategy is crucial to the success of your mobile app, but the various ways to make money from your app can be confusing and overwhelming for many first-time appreneurs.
Traditional advertising, paid downloads, in-app purchases, and unlockable features are all commonly used strategies when monetizing apps, and it is important to determine the best monetization strategy based on the type of app you are developing.
To monetize your iPhone or Android app successfully, you must stay on top of current trends within the mobile app industry, which is dynamic and rapidly growing.
Continue reading to learn the facts about the most effective method for profiting from app downloads now, which will help you to develop the most ideal monetization strategy for making money from your mobile app when it is released on the App Store and/or Play Store.
Numbers Don’t Lie
Everybody may have a different opinion as to the best way to monetize your app, but we prefer to stick with objective, statistical facts.
As such, let’s take a look at some interesting statistics that will give you an idea of how explosive the mobile industry is and why in-app purchases are presently the most popular way for app inventors and developers to gain from sharing their unique and innovative app ideas with the world.d
Industry Size And Growth
- Over 40% of the world population is presently online, which equates to just over 3.4 billion people. If we look back to 1995, less than 1% of the global population was connected to the Internet. This is an interesting statistic that gives insight to the exponential growth of the mobile app industry.
- As of 2016, there are over 2 billion mobile users. With such a massive demographic, it’s easy to understand the mobile app revolution that is taking the world by storm.
- Citizens of developing countries primarily in Asia, South America, and Africa have been a key driving force behind the global mobile app boom because it is less expensive to buy a smartphone than a traditional desktop or laptop computer.
In-App Purchases – Why It’s Typically The Best Way To Go
Because every app is unique, we at BrainyApps work closely with you to determine the best way to profit from your app.
However, a majority of our clients choose in-app purchases (IAP) as their preferred monetization strategy because it is statistically the most productive way to monetize apps. Here’s why:
- Only 5% of app users spend money on in-app purchasing, yet this 5% of users brings in more revenue from in-app purchases than any other monetizing strategy.
- By 2017, total global sales from IAP are projected to reach $37 billion dollars. By comparison, total sales from paid app downloads are “only” projected to reach $29 billion dollars.
- By 2017, IAP revenue is set to be the number one source of mobile app revenue, accounting for 48.2% of earnings, compared to 14% from ad-based revenue and 37.8% from paid app downloads.
Why Are In-App Purchases Popular?
As you can see, in-app purchasing brings in the majority of mobile app revenue, but understanding why this is the case will help you improve upon your monetization strategy, thereby leading to higher revenues.
In-app purchases are bringing in the most revenue for two reasons: they provide value to users and they create a more enjoyable app experience overall.
Have you ever downloaded an app you were excited about, but your enthusiasm faded to discouragement when you were bombarded with advertisements?
If you are an active mobile app users, this has likely happened to you on many occasions and you may have just ended up uninstalling the app altogether.
Offering IAPs eliminates the need for distracting ads and creates a more engaging experience for the user.
In-app purchases are attractive and give the user perceived value for their money because a user can spend a small amount of money and greatly enhance their app experience because most users see the value in spending a mere 99 cents if it will unlock an attractive feature or make a game more fun to play.
A Balancing Act
The key to implementing a successful IAP strategy is maintaining the ideal balance of paid and free functionality.
You must give users enough free functionality so that the app is enjoyable and usable without having to purchase anything.
This gives users who do not wish to pay a chance to familiarize themselves with the app.
Essentially, this keeps wary users on the app for a longer period of time.
The longer they use and enjoy the app, the more likely they will make in-app purchases.
It is also important to consider the content of the in-app purchases themselves.
The in-app purchase must provide a good value without negatively affecting those who do not wish to purchase.
For example, in some multiplayer game apps, users are able to pay their way through the game and gain an unfair advantage over users playing for free.
Not surprisingly, this model generally does not work well because remember that only 5% of users statistically make in-app purchases.
This means the other 95% will be left frustrated and disinterested in the app.
One Size Does NOT Fit All
In-app purchases bring in the highest revenues because they provide an interesting and enjoyable app experience for the user, without the frustration of advertisements.
Nevertheless, a monetization model based on in-app purchases is not perfect for every application; in some cases, traditional advertisements and other strategies could be more fitting for a particular app.
Although IAP is certainly not “one size fits all,” it is hard to look past the impressive statistics we’ve discussed.
As always, we would be pleased to answer any questions you may have and help you get started with transforming the dream of your app idea into reality.
If you enjoyed this article, please drop me a comment below to let me know your thoughts.
Deron | co-founder @ BrainyApps