Mobile app monetisation

From the archive: originally published on the Eastpoint blog on 26 January 2018. Some details reflect that time.

Monetisation - the process of taking an entity and harnessing it to produce money or legal tender - is a major part of app development.

In most cases, is the driving force that allows apps to emerge into and thrive in app marketplaces.

Eastpoint was recently featured in the Cambridge News for an article on how to make money from apps, and we've followed up here with some more info.

Billion dollar business

Apps are a huge money earner - the amount earned by companies and individuals with apps published on the Apple App Store alone in 2017 was reported to be $26.5bn.

This staggering rate of earnings has been steadily increasing since the Apple App Store was launched in 2008 and saw a 33% growth rate in 2017 (asymco.com, 2018).

Adding Android, Windows and a handful of other platforms into this mix means there is a lot of potential money to be earned in the app business.

How does app monetisation work?

First, it’s important to properly plan the type of app that’s going to be built, and to consider the target audience and architecture of the app. From these factors, the most appropriate monetisation methods can be derived. What methods are available?

Monetisation methods include paid apps, in app purchases, and advertising.

Advertising

Advertisements can be introduced into apps in the form of interstitial ads (full screen) and/or banner ads (partial screen, often seen at the bottom of the screen).

These offer a good solution for producing revenue when the initial download of the app is offered for free.

However, many users will be irritated when presented with ads and see them as an unwelcome obstruction and distraction.

As for system architecture, ads should only be displayed in areas and at times deemed appropriate. Ads should not cause an obstruction while a feature of an app is in use and should be implemented in a way which causes as little distraction as possible.

Users will be quick to leave negative feedback and uninstall when annoyed by these aspects of an app.

Paid apps

To combat irritating ads, a paid version of the app can be offered, which removes the presence of ads entirely.

Paid apps also ensure a guaranteed payment from users is received, whereas ads are an investment which pay off when users return and produce impressions (ad views) and ad clicks over time.

In app purchases

Lastly, in app purchases can be used in both free and paid apps to enable users the ability to unlock additional content and/or features for a fee.

Which one is best?

Where target audience is concerned, ads are often inappropriate for apps targeting younger audiences, as displayed ad content can be unpredictable at times. But in general ads are suitable for most age groups.

In app purchases can also be a costly mistake for any adults that receive a surprise bill listing the transactions made by a child while using an app.

This means that when targeting a younger audience, paid apps are a good route to go with. This enables an adult to purchase an app for a child and removes any worries of inappropriate content being viewed and surprise bills.

Furthermore, some apps may be aimed at a more professional user base, this usually rules out the use of ads and makes paid apps and in app purchases the best choices.

References:

asymco.com, 2018 - http://www.asymco.com/2018/01/08/the-ios-economy-updated/

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