MONETIZATION MODELS FOR YOUR MOBILE APPLICATION

Mobile app monetization models
App monetization model can be defined as a framework showing how a mobile app can earn revenue, generate profits higher than the average return on investment (ROI). In other words, app monetization model provides answers to two fundamental questions:
1. Which type of value will be accessible? At what price? And for whom?
2. What source(s) of income will be pursued?
NOW, I Just Try to make it simple & Basic for Mobile Revenue

# ADVERTISING

Online advertisement is broad and growing gradually. Here are some facts:
  • According to Business Insider, 2016, United States Internet promotion income increased to $72.5 billion exceeding the previous $69 billion spent on ads.
  • The world internet advertising costs hit more than $200 billion in 2017
  • In 2017, United States digital promotion exceeded a target of $83 Billion
There are many ways to implement mobile advertising. They include:
  • Display the third party ads on your iOS or Android app.
  • Create your ad networks like LinkedIn, Facebook, Twitter and Google
  • If you want to operate the app as a marketplace like Craigslist or eBay, you can include a listing fee. Or/and
  • On the ads, you can add job listings, similar to websites like Angel List and Stack Overflow.
The primary disadvantage of using advertising as mobile app monetization model is the fact that many users don’t like ads. So says HubspotBusiness Insider, and Vieo Design

# LEAD GENERATION AND AFFILIATE MARKETING

Lead generation and affiliate marketing is the second mobile app monetization strategy that you can consider. Pat Flynn of the Smart Passive Income provides some useful description of “affiliate marketing.”:
“Affiliate marketing is a means of promoting other people’s (or business) products and earning a commission in return. If you find a product you are interested in, you can advertise it to others and receive a profit for each sale. What are the benefits of this app monetization strategy?
  • You will be excited if you earn a commission
  • The company will be delighted that they have a new sale from a client that they didn’t expect.
  • Also, the client will be happy that they learned about a product directly from you that will meet their needs or desire.

“[T]he marketing process of stimulating and capturing interest in a product or service for the purpose of developing [a] sales pipeline”.
Lead generation, then, involves attracting the interest of potential customers in order to sell them down the line.
(If you’re interested in learning more about the intricacies of initiating and building customer interest in your product or service then this HubSpot article is a good place to start).

# SELLING DATA

The third mobile app monetization model involves the selling of extensive data to interested third parties. If your app can generate a significant amount of data on client preferences or habits, then it is possible that these data would be useful for other businesses, whose products relied on knowing people want and need.
For example, the famous free check-in-app Foursquare permits users to share their locations to the public (i.e., “check-ins”) with other parties. This data usually complies with huge databases; later Foursquare sells the data to interested third parties.

# TRANSACTION FEES

Here’s fourth mobile app monetization strategy. If your business startup operates in the form of digital marketplace or platform that allows financial transactions to occur regularly (just like Kickstarter, the international crowd-funding platform work towards creativity), the transaction fees will represent the app monetization model.
Presently, the online payments processing startup, Stripe, is estimated to be $9.2 billion. The company generates revenue by charging users reasonable fees for every completed transaction. Airbnb, Uber, ebay, Amazon, Etsy and many others also work with this app monetization model.

# FREEMIUM

The “freemium” app revenue model helps to create revenue in the web-based services, including digital apps. This basic approach is simple to understand. All you have to do is to offer users with a functional, basic and full free version of your product or service sample. After some time, this will persuade potential clients to become regular clients by providing them a premium, advanced, feature-rich version for a price.
Most “Software as a Service” (SaaS) based products make use of the freemium business strategy. For instance, Dropbox provides new users with free storage of 2GB with premium versions that enable users to buy extra space. Dropbox makes use of the freemium revenue model to acquire more than 500 million users globally.
  1. Capacity-Based freemium: a free version of your product or service is offered up to a certain capacity—such as usage amount or number of users—beyond which users are required to pay to keep using the service. Examples: DropboxEvernote
  2. Feature-Based freemium: a free version of your product or service is offered but its functionality is limited unless users pay to unlock the full range of features. Examples: BufferSkype
  3. Time-Based freemium: a free version of your product or service is offered but only for a limited time, i.e., the standard “free trial offer”. Examples: AudibleShopify

# E-COMMERCE

e-Commerce is another app monetization model option you can consider even if your startup doesn’t operate as e-shop. This is a right place for many business startups selling promotional materials (like t-shirts) on their websites.
Apart from this, it is possible to combine m-commerce with freemium-based app monetization model. The way to do it is to sell services or products directly to what you offer. For instance, the Evernote app takes note, organizes and archives data, up till 2016 was combining the freemium app monetization model with extra e-commerce revenue in the form of product sales through the Evernote Market. Sadly, Evernote was unable to generate much profit via its market. Due to this, the company doesn’t continue with its e-commerce operations in 2016.

# VIRTUAL GOODS

One of the most popular mobile app monetization strategies for game apps is to create virtual goods. The world market for virtual goods ranging from avatars, stickers, weapons and unique levels is estimated to worth approximately $15B. Practically, any electronic good can provide monetizable virtual good including video games. Even more, they are the usual type of virtual goods. The super popular Pokémon Go provides users the opportunity to purchase different types of virtual goods such as “PokéCoins.”

# SUBSCRIPTION/SOFTWARE-AS-A-SERVICE (SAAS)


  1. PAYG (Pay as you go) plan. You can charge your users based on each usage rate. Previously, this approach was the common among mobile phone plans. Many companies like Twilio and Amazon Web Services use this model to provide their users flexible pricing plans today. The downside to the PAYG model is intrinsically based on the number of services a client uses; it is usually difficult to maintain highly anticipated revenues (this can lead to uncertainty into your business).
  2. Tiered pricing. You can split your services into different levels according to the usage amounts and features that the clients require more and expand. Tiered pricing is the most popular model among Software-as-a-Service companies.

Contributer

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard. Google

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