Monetization in Apps – The Basics

Monetization in Apps – The Basics

The past years put huge emphasis on the tremendous growth in the mobile world and in the years to come this won’t change.


App data 1

source: Forbes and Global Web Index

Mobile apps can provide exciting opportunities and challenges to new and old developers. This blog post is part of a monetization series, in which we will cover aspects of monetization and get into more detail with regards to the topics covered below. Let’s start with the basics. In the next few lines I will go through all the different app monetization methods, and explain them briefly for the app marketing rookie.


Android vs. iOS

Monetization is different between iOS and Android. The latter tends to monetize more with in-app ads while iOS tends to focus on in-app purchases. When launching your app, make sure to choose the operating system which fits best to your monetizing needs according to variables such as target audience, download rate per OS, GEO, etc.


Incent Vs. non-incent

There are many pros and cons to each and it is important to find a balance between the two. As a rule of thumb we would say, if promoting a new app, start with running both incent and non-incent campaigns at high volumes to gain a high ranking in the application stores. At the early stages of the campaign there are clear advantages of running incentivized campaigns, you get a lot of new users which raises your ranking in the stores for example. Although these users’ quality might be considered lower, the advertiser does actually gain some highly engaged users from incent campaigns and at a lower cost. For example organic users gained through the high ranking. Now the users need to get an incentive to stay on the app and engage, one example could be a 24 hour discount on in-app purchases.
Non incentivized campaigns are good to run as sustain campaigns. The users might be harder to obtain, but they offer high user value. These users might download your app by seeing a banner or video that catches their eye.
Whether incent or non-incent, the highest quality users are organic users, users who see your app at the top of the stores and download it because they are interested in its content or users that are brought through other users (by shares, recommendations etc). These users will most likely engage highly.


Freemium vs. Paid app

Looking at the list of the most downloaded apps, free apps lead at almost every category. But how can free apps be profitable? The answer is IAA (In-App Advertising) and IAP (In-App Purchases).

All the top freemium apps are using one or both of these methods for monetization. Let’s elaborate:

  • In-app advertising
    Advertisements are generally for other mobile games, which might seem counter intuitive but a user who’s enjoying your game will continue playing it regardless of other games he may download. IAA is a great way to utilize already existing user views, and receive passive income.
  • In app purchases IAPs
    Users who are engaged in the app and are enjoying the experience will often invest money in order to get extra value from the app. Take a game for example; the in-app purchase may be in the form of bonus levels, gems or coins, more lives, anything that will give the paying user an advantage over users that aren’t paying. Developers need to figure out at what point the user is so engaged in the game that he wants to continue playing, that’s the best timing to offer the user to buy his way ahead in the game (usually on day 3-5 retention).




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A couple of extra tips regarding monetization that we’ve learned through collaboration with clients:

  • Make sure to offer different types of non-irruptive IAPs with clear benefit of the purchase.
  • Reward your users for retention and social sharing and give incentives around specific occasions (holiday bonuses, discounts on IAPs for the holidays).
  • The IAAs shouldn’t interfere with the gameplay and only show up when losing a level etc.
  • Supply the user with out of the app notifications that will update the user of what’s going on with the app in order to draw them back.
  • Develop other apps and advertise the various products within your apps, so you get free advertising. History shows that if the user is enjoying your app he’ll enjoy similar apps and will download and engage with your other apps.
  • Make sure to launch and test your app in different GEOs around the world. Remember that just because one type of monetization works well in one GEO, doesn’t mean it will work for all GEOs. For example: In India IAA works very well and in Japan IAP works better than ads.

Apps are here to stay, we have them on our phones and they’re already part of wearable devices. We’re spending more time engaging with our phones and you want to make sure that users are engaging with your app. Test all operating systems, test all types of monetization and find where you can be most profitable. Most importantly develop the app with the user in mind if your product is good and the users are engaged the monetization possibilities are plenty.

In our next monetization blog post, we will explore the difference between Android and iOS and their advantages.

Feel free to contact us to learn more on how to promote and monetize your app.

Set up a meeting with our experts at Casual Connect Asia in Singapore. May 19th to 21st.


NADIVNadiv Schorer is a Mobile Advertising Account Manager at dmg

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