Jedi mobile developer techniques: how to monetize the app in 2019?
How much effort and money does it take for an application to start generating revenue? Why mobile developers are never millionaires, and where is the glass ceiling in advertising profit? The guys from Appgrow analyzed 320+ applications and talked about the main mistakes of the developers, which cut off up to 40% of their advertising profit.
Despite the discouraging statistics, mobile applications can still become profitable. But to create an application to cut money from it, not really investing and receive a steady income will not work. Applications are now the most powerful user acquisition tool. Even if your application is not an addition to a larger software or brand, you still need to strive for continuous growth and development.
Surprisingly, almost 54% of all applications do not have a decent monetization strategy. This phenomenon has several reasons: some of them are created by non-profit organizations (for example, Wikipedia), brands or corporations. But the main reason may be the fact that the vast majority of applications have not yet reached a decent number of downloads in order to correctly apply at least one monetization strategy. The better your ASO strategy, the more likely it is to get users in the first couple of weeks after launching the application:
Three Reasons That Block Ad Profits
When monetizing applications, there is always a risk of running into a glass ceiling - when the profit from the application is kept at the same level, whatever you do. Sometimes the reason is the quality of the application, but more often - the way the developer monetizes it.
Reason 1. Super competitive niche + low user loyalty
We are all nostalgic for the times when the needs of a user of a mobile device were limited to games of the Snake and Tetris level. When the mobile application universe just started to take shape in the market later, users downloaded one application and used it for years.
Now thousands of applications are added to appstores daily and the chance that your application will get to the top or become viral like Pokemon Go is small. For unknown applications with a “big idea”, the only chance for recognition is to create an information feed and an article in top technical publications such as TheVerge, Tech Crunch and others. But even the editor can be easier to convince the uniqueness of the application than to convey it to users.
The user does not forgive bugs in UX or functionality, and if you also show him an advertisement at the wrong time, he will not be too lazy to find the application in the app and put him a unit in the rating. The application rating is extremely important for developers, it directly affects the number of further installations (here is an example for Google Playstore):
Reason 2. Wrong monetization model
When creating an application, developers often focus on more successful applications in a similar niche, or copy the main idea of the application from those who have already thundered on the app. There is one striking example of a friend who created a quiz application for children 9-11 years old based on the school curriculum, showed them banner and interstitial advertising, and set a price of $ 0.99 for a package of additional tips and saving the level. After a couple of months, the parents of these children found that once they paid a dollar for tips, they continued to automatically pay for them each time (the children took tips constantly), deleted the application, and some even sued.
He used the same principles of monetization that quizzes used ... for adults. This sad case teaches one thing: if you have a game for children, it should bring maximum benefit or fun to young users and have the option of parental control. If the application looks safe and doesn’t show ads at random interaction points, parents will most likely trust its children.
Reason 3. A bunch of promotional SDKs
According to statistics, more than 20 SDKs are installed in 74% of the top free apps. It is painful even to imagine how the developers manage to manage them. They install an advertising SDK to find out what works, and then forget to remove it, even if it is useless.
The best way to combine and manage all the SDKs for monetization is to use advertising mediation platforms such as Epom , InMobi and others. They maximize the profit of the application through the use of the most conversion advertising formats. If you still haven’t tried anything other than AdMob, now is the time: some advertising mediation platforms offer expert assistance in choosing placement, free optimization and exclusive traffic (Epom), some of them are unique geo (InMobi).
What works and what doesn't work in the usual monetization strategies
When monetizing an application, developers usually choose the most obvious and proven monetization strategies: advertising, in-app purchases, or all together. It’s known that ad revenue is highly dependent on user engagement — the amount of time that users spend in your application. Thus, the first dilemma of the application developer is to figure out how to find a balance between user loyalty and the desire to place ads in each visible part of the application in order to recoup development costs.
According to Research Gate statistics, the number of downloads significantly affects the monetization strategy that the application developer chooses.
Why is monetization of user data found among these strategies? Surprisingly, American developers finally realized its real advantages. Properly configured data monetization gives a stable passive income to the developer. In order to understand how to work with each of the three strategies, I propose to compare the advantages and disadvantages of each of them.
In-app advertising is considered the universal way to monetize all free apps. Advertising formats evolve towards nativeness in order to engage the user while remaining as unobtrusive as possible.
However, the growth of the mobile advertising industry has attracted scammers who offer higher CPMs for displaying questionable ads. Mobile fraud affects the entire industry: ad networks, advertisers and application owners are constantly introducing new standards for checking traffic purity and prefer to buy an audience rather than dead souls (bots).
In addition, users still don't like in-app ads, and here's why:
- There is no call to action: why click on an advertisement if it gives no value?
- Small size: banners in the application are too small, they annoy users, while ensuring zero conversion. Most clicks on this banner are random and spoil the karma of the application. Use smart banners that adapt to screen size.
- Bad UX in general: there is no button to close the advertisement, or buttons that cannot be reached with your finger (the so-called “fat finger”), the default sound is included in the advertisement, etc. Bad advertising during the maximum interaction in general can lead to the removal of the application.
- Zero relevance and zero confidence: Donut ads in a fitness app or credit in an app for kids are not uncommon. It is important to determine the type and topic of advertising that you are willing to display. Now less than 25% of users trust advertising largely because developers are partnering with questionable advertising networks.
Give users the choice: ads don't always appear unexpectedly.
Rewarded video, request to take a survey and other options should be of real value to the user. 71% of users said they would rather watch the video than start shopping within the application . The full checklist of how to configure in-app advertising correctly is here .
Monetization of user data
The essence of data monetization is the collection, analysis and transfer of non-personal user data to generate revenue from the application. For application developers, this is a good source of passive income and a real opportunity to earn money from users.
Why am I saying non-personal? Because this type of data is the only monetization option that fully complies with the GDPR and Google policies.
With a minimum DAU of 50,000+ and the presence of a couple of hours, you can prepare the application for monetization. A complete guide to this type of monetization is here , below I will go over what you need and what you don’t need to do.
- Make sure you have 50,000+ DAUs. Low DAU application developers are installing an SDK to monetize data in the hope that it will bring them a fortune in the future. And disappointed.
- Before collecting data, you need to get clear permission from the user to use his non-personal data.
- Combine data monetization with other monetization strategies.
1. Condemn this method of monetization without understanding the subject. Monetization of user data involves the use of only non-personal user data, such as screen size or Bluetooth connection, which are used by quantitative data and third parties only as quantitative data, and therefore pay less for them than for personal data.
2. Neglect additional application security measures. This picture is funny, but many application owners do not spend enough time on security, which can affect users.
3. Strive to do everything at once. The desire for greater profit pushes some developers to transfer some personal data with non-personal user data in order to receive at least 50% more. Remember the 'Weather Forecast — World Weather Accurate Radar' app , which subscribed users to the paid version of the app without their consent .
Statistics show that 9.2% of applications use personal data as a monetization strategy, 6.2% of applications combine personal data with advertising, and 1.2% of developers combine all three monetization strategies.
Despite the fact that only 5% of users spend money in the application, the total amount of income from purchases in applications is 20 times higher than the total profit of all other methods of monetization combined.
In-app purchases include access to unique features, virtual currency, extra health, the ability to use the app without ads, or any other bonuses that you can spend in the app.
Purchases within the application work great if you place them in that part of the application where the user has already completed some action, but still remains involved. For example, the Candy Crush application has 23 localized versions. Can you imagine the size of their audience? By offering users various in-app purchases — extra lives or gold bullion packages, Candy Crush has turned some of its users into paid customers. Today, Candy Crush makes nearly $ 1 million a day.
Another cool way to sell in-app purchases is to offer all the premium features as a single package, as the guys from the 7-minute workout application did:
The competition among applications in appstores is incredible, so hoping for random success is not worth it. But the rules of a regular store also apply in the app store: brands on the shelves do everything to force the buyer to choose their product exactly before he leaves the store. The same with applications.