Dave Thorpe
7 mins

How to Monetize Your App in 2021

There are many ways to monetize your app in 2021. As with the whole app ecosystem the lines are shifting on what you can and cannot do and the best ways to generate money.

For some apps monetization is a bonus. The aim of the app is engagement within a larger enterprise and therefore monetizing the app is a nice way of recovering costs of app development and maintenance. It isn’t really a necessity when it comes to determining whether or not the app is successful.

However, lots of apps are required to generate profit, and depending on the core function of the app, the main way to achieve this is through monetization strategies (as the app might not be a sales- or subscription-based model).

Here are the 4 things to focus on when aiming to monetize your app.

Offerwalls

At the start of the year, 25% of the top grossing game apps used offerwalls, which has been one of the tried and tested methods of monetizing your apps. Offerwalls are a reward based system that encourage users to engage with content outside of the app for a benefit to themselves. In-game currency or more free messages are common rewards. However, earlier in the year Apple banned them in all iOS apps and their popularity has unsurprisingly dipped in response. This change has made it more difficult to increase awareness of apps, as well as acting as a being a successful monetization tactic.

Offerwalls are still available on Android, and even if this means more work for your development team, this is a tried and tested method for growth and revenue and should be utilised. Android has three-quarters of the market share and offerwalls are well accepted by its users. Over half of users will opt-in to receiving rewards based in-app offers, and therefore engagement with offerwalls is high.

App Store Optimisation

This is a bit of a cheat as it isn’t directly an app monetization technique but App Store Optimisation (ASO) is key to supporting the growth and marketing of your app within the app stores, which in turn will help you monetize your app. Generating users in app stores is difficult, but there are many ways you can boost your chances of gaining new users. To do this, we should think of app store growth in two main steps:

  1. Gaining more traffic to your app. This is people that see it within the app stores.
  2.  Converting these people into new users of your app.

To gain more traffic within the app stores, you will need to spend some time working on the language used in the name of your app and its description. Much like search engines, app stores use specific keywords in order to rank apps, therefore you should select the keywords you wish to target and use them wisely within your app’s description.

You also need to increase your app’s ratings. Engaging with your users and rewarding them for rating your app will greatly improve visibility in the app store.

Converting this traffic into users comes down to some more traditional design and user experience features. Apps with video demonstrations in the app stores typically receive more downloads, so including this in your app store advertising is key. It doesn’t have to be fancy, but this will make a huge difference to your conversion rate. Keep your logo design simple and clean and make sure you are using coloured backgrounds to make your screenshots standout.

In-App Bidding

In-app bidding is an advanced advertising method where mobile publishers are able to auction off their ad inventory to their advertisers. Over the last year, the number of apps using in-app bidding has increased rapidly.  Often, it has resulted in an uplift in revenue of around 20%, so if you weren’t already using these advertising solutions, it’s probably time you were. Big mobile game companies are starting to use most of their ad spaces this way, and the rest of the app market is quickly catching up.

Subscription Model

Another way apps generate revenue is with a subscription model. Users pay a monthly fee to access your app. This model is probably the way to make the most money, however this will take lots of investment in terms of time and resource to sustain. Apple and Google offer a better revenue split for subscription model apps dropping from 30% revenue share to 15% share after year one. This means you need to keep your customers engaged for a long time and obviously suits certain media apps better than others.

As the app owner you have reliable income and the average spend for subscription apps is greater than any other app model. They have the most engaged audiences and promotions are a great way to capture new users to show your value.

Sounds great — but there are some catches. You need to provide updates to features and content regularly. If you want this level of loyalty from your users you will have to work for it. Your onboarding process needs to be fantastic. If you want someone to part with their money on a regular basis they need to be convinced from moment one that they will be getting a great service that provides them value and this means you can’t afford any slip-ups. Find out about how the app Fabulous’s onboarding process gets users to opt in.

Another problem is transitions to a subscription model will generate negative feelings in your current user base. This needs to be handled with extreme care and even then you will still receive lots of backlash.

What Changed in 2020

2020 has seen huge growth in both in-app advertising and purchasing, both increasing by around 20% from 2019. In 2020, in-app advertising spend was a massive $240B, and in-app purchases totaled $140B. Clearly, the power of spend in mobile is huge. We have also seen a surge in time spent on mobile, which correlates to money spent on mobile. In the UK specifically, the increase in time spent is approximately 15%, with the impact of COVID-19 meaning that this rate has increased much faster than previous years.

What's Next?

Setting up multiple revenue sources is key to successfully generating reliable income. Most apps only have a very small amount of their user base contributing financially, and as app owners, we need to mitigate our reliance on these people. Generating revenue outside of this “core” method will create a more robust and successful monetization strategy.

Augmented reality is also seen as a powerful tool in gaming and retail and we have seen some great examples of early adopters over the past few years. With the ARkit launched by Apple, it is becoming easier to implement AR solutions. To Learn more about the impact of AR read “Augmented Reality: The Impact on Industries So Far.”