Just for an experiment, go to your app store and look at the app libraries not as a regular user but as a professional who observes the marketing trends. There are so many categories and subcategories that you would usually find under some attractive headlines, such as “Top 10 apps for wellness,” “Top 10 apps for office”, and so on. These labels are helpful for mobile users, but from the marketing perspective, let’s face it, no app developer creates these apps just to be helpful or to find its name in the list of Top-10s.
The mobile app market is huge, and so are the big players in this industry, covering several aspects of our lives. Even modern gambling platforms bring their offerings to mobile screens, which is phenomenal given the fact that casino gaming was born in physical buildings and now has a competitive life on smartphones. One great example is the famous Ignition poker mobile app, which has a modern design and intuitive structure. When we count the number of people who play their poker matches on a smartphone via such apps, it speaks about the success of the casino and other gaming applications.
However, creating an app and releasing is one thing but making people love and use it is difficult. You know what is more difficult? To make people pay. But don’t worry, if the product is good, people will be willing to pay. At least, that’s what the numbers tell us. Just consider the fact that the mobile app market is expected to reach $571 billion by 2030 which is a great value and speaks about the cashflow circulating in the field.
Monetization of mobile applications is quite a complex process, depending on the type of the app, people who use it, their age, budget, and much more. In this article, we will particularly discover several alternative methods of making money for developers, such as alternatives to one of the most popular methods – advertising.
In-App Purchases: A Strategic Revenue Stream
The concept of this method is pretty simple: Users download the app at no initial cost but have the option to purchase additional features or content within the app. These could be cosmetic enhancements for a game character or premium features that enhance functionality. The key benefit is that users can trial the app before committing any financial resources.
The effectiveness of IAPs for developers is undeniable in terms of accumulating revenue. Besides that this market is worth billions of dollars globally, it’s expected to see an annual growth of 12,9% between 2023 and 2030. This revenue stream is significantly impacting the app development landscape.
Understanding the psychology behind IAPs is crucial. Imagine encountering a frustrating level in a game. Conveniently, the app offers a power-up for a small fee. This strategically timed offer capitalizes on the user’s desire for immediate progress.
The advantages of IAPs are twofold. Users have control over their spending, choosing which features or content they value enough to purchase. For developers, IAPs function as a continuous revenue stream. Furthermore, the growing trend of subscription-based IAPs provides developers with predictable income.
Freemium: Ideal for Customer Acquisition
The strategy of allowing customers to try a sample of service and make a purchase only after they like it has proven highly successful. One great example is the famous music streaming platform Spotify, which is used by millions of people, but not all of them pay a subscription fee.
The free version of the app can often be annoying because it offers a library of unlimited songs and playlists, but your hands are tied to skipping some songs or listening to them with high quality. Over time, the users of the free plan decide to have better options and simply start paying for a service that they have been using for a while. So, it’s not surprising that today, Spotify has 239 million premium subscribers, and this has been a growing number since 2015. Does the model work? Absolutely.
However, there is a delicate issue developers need to take into consideration when it comes to adopting the same format as Spotify and similar platforms. It’s the balance between what’s included in free and premium offers. If people get enough services for free, they won’t have the motivation to become paid subscribers, and vice versa. So, it’s important to make the right decisions and strategize the offerings of a freemium method.
Partnerships and Sponsorships
Finding the right people to partner with is a reliable way of ensuring some income for the app since it can be beneficial for both sides. The financial impact of partnerships and sponsorships can be significant. According to industry reports, some companies generate over 20% of their total revenue through these collaborations. It’s no longer a secondary revenue stream; for many apps, it’s becoming a primary source of income.
However, there is another advantage when it comes to this type of collaboration, and that is the opportunity to build a trusted authority among customers. If a famous football player endorses a football gaming application, people will accept it more seriously and will be more willing to give it a try. In other words, good partnerships mean more than a financial income and can be super helpful in building a brand name in the overcrowded market.
