AppMaster.io Blog

Mobile app monetization: 2021

The mobile application market is growing, and the competition for users is getting higher. According to statistics, 20% of projects are not profitable at all. What to do? Think over your monetization strategy at the development stage!

Let's talk about current ways to monetize a mobile app in 2021.

Advertisements placement in the application


The main issue here is to maintain a balance between visibility and unobtrusiveness. If you succeed, you will not only make a profit but retain loyalty and increase audience engagement.

Pros:
  • Free applications are downloaded more, and you can monetize them immediately after publication;
  • Users who understand that advertising is your way to make money will not be repelled by it;
  • Relevant ads won’t be annoying and can improve user experience;
  • You can experiment with many different formats;
  • The easiest way compared to the rest.

Cons: 
  • Not suitable for most niche applications;
  • Low revenue per user;
  • The audience may leave  the app due to intrusive ads;
  • Many people get used to not paying attention to ads or turning off/skipping them;
  • Ad traffic blockers may hide ads in applications.

Types of advertising in mobile applications


  • Banner: static or animated images; a classic that is outdated and ineffective;
  • Rewarding: for viewing an ad/clicking on a link/repost, the user is given bonuses - virtual currency or access time to functions;
  • Native: mimics part of the application; its task is not to attract attention, but on the contrary - so that the ad is clicked without understanding what it is;
  • Built-in: for example, inserting at the beginning of a video is an effective way to monetize if used wisely;
  • Interactive (game): simple actions are available in it; helps to pass the time and increases interest in the ad;
  • Interstitial (intermediate): displayed in transitions between screens or levels within the application; often animated or interactive.


In-app purchases


The most common type of monetization is buying items in mobile games. But you can sell individual features or add-ons to users.

Pros:
  • Low risk;
  • Users are used to them.

Cons:
  • It is difficult to integrate so as not to harm the main functionality of the app;
  • Very few users make constant purchases.


Percentage of the deal


With this type of monetization, you build a marketplace and allow your users to search for goods or work-for-hire in the application.

Pros:
  • A well-tuned model works by itself;
  • Your application is free;
  • You can post additional niche ads.

Cons:
  • It is not easy to find a free niche and develop it;
  • A technically complex system of payments and integrations;
  • It is important to think over the whole scheme of interactions with partners and clients in advance;
  • Negative reviews will be in your direction, not in the direction of actual sellers and contractors.


Different versions at different prices


A familiar monetization system, where the price for an application depends on the functions provided to the user. The basic version is usually available for free or at a nominal price. This also includes the Trial versions and Freemium (when the basic version is provided free of charge, and the full version is provided after payment).

Pros:
  • It lets you evaluate the advantages of the application and increases loyalty;
  • Provides users with a choice;
  • Such applications attract more interest than completely paid ones;
  • A flexible approach that allows you to adapt to different categories of clients.

Cons:
  • As a result, usually, only a small percentage of users pay;
  • It's hard to find the right balance between basic / trial and paid options.


Subscription


Similar to the previous one, only that users pay for advanced functionality regularly.

Pros:
  • Regular payments, which often increases LTV; 
  • You can use a reward system (user ranking, discounts).

Cons:
  • It is difficult to gather a loyal willing-to-pay audience;
  • Content must be premium, and regular updates are needed;
  • Not suitable for all mobile applications.


Sponsorship


You agree with advertisers who provide rewards for your users for performing certain actions in the application. The revenue generated from the rewards used is then split between you and the advertiser.

Pros:
  • Suitable for any niche;
  • High level of user engagement.

Cons:
  • May be difficult to find sponsors with a similar target audience.


An integrated approach and unusual solutions


It is unlikely that you can find a way that is 100% suitable for monetizing your application. Combine them, experiment, and most importantly, turn on your creativity!

You can create a limited edition or design (for example, Halloween edition or in the style of comics), allow users to set the amount of payment themselves (yes, it works very well), find out their income level and occupation (for example, by asking to fill out a questionnaire) - based on this, to extend or restrict access to the functionality.

Of course, do not forget to conduct tests and confirm your hypotheses with specific data - and then you will get the maximum profit!

You can learn more about how to create and market your mobile app on our blog, Twitter, Facebook, and Linkedin.