6 Apps Monetization Methods

Apps Monetization Methods

For many of us, we begin our daily routine by turning to certain mobile apps. Perhaps to be able to monitor our exercise routines; check our health conditions; go through our budgets or our to-do list; check our day’s schedule for meetings and presentations; have a quick run through our presentations or keep up with friends and family.

We are an ‘appy’ generation. According to Nielsen’s report on the average, we spend about 30 hours a month using apps. Research shows that an average smartphone user uses fewer than 10% of the apps installed on their smartphones daily. According to Verto Analytics data, an average person has about 89 apps on their phone. But, out of the apps we have on our phones, we only use five to eight of them daily.

This usage is highly dependent on the person. Research points to communication and social apps as the most used kinds of apps. Come on, we need to WhatsApp friends and family; keep up with our fave celebs on IG; Facebook writers full everywhere; Twitter na for #wordsontheinternet (a replacement for words on the street); awon ti Snapchat. Then Slack away with colleagues and teams.

Media apps are also popular. We gats know where Buhari is na. Games; Music; Streaming; Maps/Navigation; and  Productivity apps are also amongst the most used apps. The use of shopping apps is high too, though their usage doesn’t increase as much as expected following the rise of e-commerce and online shopping.

Apps Monetization Methods

Apps come in handy when trying to make most decisions we are faced with; they are our go to when in need of just about anything. We barely can do without them in this generation. This, of course, opens up a lot of opportunities. Brands are trying to find out how best to build better relationships with their customers. This boils down to giving you and I better app experiences that would have them smiling to the bank. For me, it’s not my ‘consign’ whoever decides to live in a bank. My own is to have apps that meet my endless needs.

According to Statista, the app industry is projected to gross an annual revenue exceeding $189 billion in 2017. It’s crazy that a promising industry as this is dominated by two mobile app giants – Android and IOS. A Gartner’s report found that 87.8% of all smartphone sold in the third quarter of 2016 were androids. Google and Apple have dominated the market. One begins to wonder if any competitor can catch up with them in terms of the variety of their apps and number of developers.

Inmobi estimates that 55% of app developers make less than $1,000. It’s also surprising that one-third of app developers worldwide haven’t gotten up to 10,000 total downloads. This is regardless of the fact that as much as 46% of the world is believed to own smartphones.

What’s a smartphone without apps? How have a few apps been able to dominate the industry having downloads in millions while others are struggling to get 10,000 downloads? How does Nigeria come into the picture? Are we beginning to already develop apps that can meet our needs and possibly the needs of users in other parts of the world? How best do app developers make profits in this promising industry?

These and more are the questions that should run through your mind. Think about how well your app is positioned, think about your pricing system and how effective it is to generate funds for you. Come on, app development could be your hubby, making some dough off it ‘won’t hurt nobody’. In light of this, I’d want us to discuss the available pricing system. This would help you figure out how to integrate money making into your app development craft, so you can smile to the bank more often (and possibly write me a cheque one of the days).

Apps Monetization Methods

APP MONETIZATION METHODS

Presently, there are six app monetization methods which we would discuss briefly (and possibly extensively in subsequent posts).

DIRECT SALES

This monetization method requires users to pay for the app before they can make downloads and then subsequently use the app. The amount charged can vary. This method can be discouraging to users as many would want to have a view of what the app could offer before they pay (that’s if they consider paying for an app an option). This is probably the reason no app with this monetization method has ever been amongst the most revenue generating apps worldwide. This method is becoming less popular by the day. Minecraft Pocket Edition is one of the most paid apps in Google play store.

FREEMIUM

Freemium is a combination of ‘free’ and ‘premium ‘. With this method, users get basic features free and at zero cost, but can only get access to richer functionality for a subscription fee. Not many users are willing to pay the subscription fee, so this method thrives on the ability of the developer to get as many downloads as possible. This increases the possible chances of more subscriptions. It is often feared that this method has the potentials of being exploitative. We would discuss the Freemium monetization method extensively in a future post, as it is fast becoming an ideal monetization method for other online businesses asides apps.

SUBSCRIPTION

This method is similar to the freemium method. The difference is that here, users pay to have access to all the features not only for a few features. This is to say that in this method, users must have to subscribe to be able to use the app. Subscription can be monthly or annually and sometimes quarterly. This method generates predictable, and long-term revenue for the owner.

IN-APP PURCHASES

Apps monetization through in-app purchases is more common in mobile games. Agh, Kim K’s game chop Philip(my friend)’s money that year. Tech Times revealed that as of February 2016, about 1.9% gamers made in-app purchases and this number is steadily rising. Online dating sites do make money from in-app purchases too. Meetme charges users a certain amount to increase their profile views. Biko, raise your hands if you bought 2go credit.

CROWD-FUNDING

This method is relatively new. App developers present their app ideas on popular online platforms requesting donations. Some ideas attract funding higher than the required amounts. Then, some ideas don’t even get enough of the amount they seek. This would mean that to use this method, you have to think of an idea people would easily want to part their money to crowdfund.

ADVERTISING

Monetization by advertising is the most popular monetization method. Users like free apps and to make money off the app, there gats be lotta ads popping up while you use the app. While I find this annoying on every level, truth is that I have clicked on some of the ads, sometimes mistakenly. IHS Markit in a report estimates that by 2020, in-app advertising will attract $53.4billion in total revenue per year.

The bottom line is that the app industry is booming and there is no sign of a slow down anytime soon. Developers are seeking for monetization methods that suit their app and recently a new method (Sponsorship) is in the pipeline. This means that other methods could spring up and prove more effective to a particular developer than any of those mentioned above. Hybrid monetization is also workable. The mobile app revolution is just beginning and there is just much happening and a whole lot more to expect.

What apps do you use the most? And for what purposes? Oya, come and whisper to me, shey you get apps wey you no even know wetin you fit use am do. *winks*

 

Victor Ugoo Njoku

I am human. I love life. I learn as much as I can every day and share the knowledge on my blog.

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