It’s quite hard to choose the right strategy in order to make money on an app. Sometimes even big developers make mistakes. Today we’ll make a brief review of the most widespread monetization models.
Today there are various business models for mobile apps. Some of them are used often and some of them aren’t. But still, you can encounter them in this or that product. All the conceptions may be divided into 2 large groups: offline and online. First ones don’t allow to make money in the apps, they only bring clients from mobile to offline. There are many examples: apps for booking tickets, taxi, food, etc. The second one provides a possibility to make money in the app. We’ll talk about them in this article.
It’s the simplest model to imagine. An app can be downloaded for money only. The payment is taken from a user in a store.
The model is quite widespread but not very popular. It’s rational to use it in cases when an app doesn’t have free analogs. The model is often used for complex business apps. There are also paid games. But as a rule, this model works when product is released by a big publisher who has made his name on the market already.
This model is the queen of mobile games. According to statistics, a lion’s share of income in apps is generated with its help. It’s used in games mainly. Its essence is that an app remains free but includes built-in purchases. Without these purchases, the game process is possible but difficult. That’s why gamers have a choice: they can play free but have difficulties and wait longer or pay and enjoy the comfortable game process. Different resources in a game may come as IAP (prompts, weapons, fuel) or game currency.
Peculiarities of f2p:
- The low share of users who pay (it rarely exceeds 5%).
- It’s difficult to find optimal balance between a paid game process and a free one.
- It’s perfectly suited only apps of well-known studios who have a large user base.
Users know this model not only by mobile apps. It allows using the freely main functionality of a product. But for the extended possibility and additional functionality, you’ll have to pay. The main idea is to interest users showing all the advantages of the product. The success of a model consists in the fact that many people start to use free functionality without the desire to pay for the app. But further on they agree on a transaction.
10% of paying users is a great conversion rate. Usually, it’s 1%.
Peculiarities of a Freemium model:
- It’s rational to use it for major projects only, as only a small part of users will generate income.
- It suits many app categories, including games.
This model implies a paid install and the presence of in-app purchases. It means that a user will have to pay a fixed price for an install and then he/she may make additional purchases inside an app.
You may meet this model rare, in games mostly. For example, in Asphalt 7.
Peculiarities of a Paymium model:
- A paid model with additional IAP.
- Demands a large user base and suits for big publishers mainly.
- It’s difficult to attract users as an install itself is paid.
While using this model, the app is free but it has a limited amount of functions or content or doesn’t have them at all. You can get access to them only for money. And the access is given for a definite period of time only. Such a model is widespread in news apps and journals. You can encounter it in various educational services.
Peculiarities of a paid subscription:
- it suits only several app types (journals, news portals, useful services, content projects).
- a possibility of permanent income because of the existing user base.
- flexible business-model setups.
Try and buy
The name of the model totally displays its essence. Not every user will pay a regularly paid app as he/she doesn’t know what he/she buys. But with the help of this business model a user has the possibility to try an app without spending money.
Nowadays this model is the most widespread on the Windows Phone platform.
Peculiarities of a try and buy model:
- suites for games and various services.
- its conversion rate is usually higher than of a paid model.
- there are many possibilities for attracting users.
It’s a business model used in games only. A gamer is offered to take part in a series of competitions for game objects. A user pays money and gets a random prize each time. The goal is to get a full collection of prizes and get a big game bonus.
This model has gained its popularity in Japanese game apps. Gamers have spent huge amounts of money in a desire to get the whole collection. But the game mechanics are built in such a way that some objects drop more rarely than others. So gamers are forced to take part in competitions again and again.
There are many monetization models. Each has its own peculiarities and may not be suitable for all the app types. Besides a product category, there are many other important factors which should be taken into consideration while choosing one. It can be audience peculiarities, marketing budget, and many others.
Read more about mobile app promotion
- Part 1 Choosing a niche
- Part 2 Typical strategies
- Part 3 App Store and Google Play rules
- Part 4 Choosing app name
- Part 5 Screenshots and app description
- Part 6 App icons
- Part 7 Making up a marketing plan
- Part 8 Creation of a landing page
- Part 9 Preparing banners
- Part 10 App localization
- Part 11 App monetization: banner advertising
- Part 12 Incent traffic
- Part 13 Featuring
- Part 15 TOP algorithms
- Part 16 Video on the app page
- Part 17 Promotion in mass media
- Part 18 Alternative stores
- Part 19 Reviews and ratings in the stores
- Part 20 Analysing competitors
- Part 21 Viral mechanics in app promotion
- Part 22 Soft launch
- Part 23 Selling triggers
- Part 24 App design A/B-testing
- Part 25 App of the Day
- Part 26 Retargeting
- Part 27 Promotion in social network communities
- Part 28 App tutorial
- Part 29 App authorization forms
- Part 30 Mobile advertising in video networks
- Part 31 How do trackers work?
- Part 32 Main efficiency metrics of mobile advertisements
- Part 33 Search in app stores
- Part 34 Pre-installations
- Part 35 Push-notifications