In 2021, according to Statista, mobile apps are estimated to generate 693 billion dollars in revenue. This value is projected to grow rapidly over the next four years, raising a pronounced concern for all app developers: How to monetize an app to generate the maximum revenue possible.
While at first glance, a simple Google search will bring up plenty of advertising networks that promise significant returns for integrating their banners and videos, it is worth it to dive deeper and understand the different types of app monetization to choose the right one for your app. In this article, you will learn the pros and cons of different types of advertising formats relevant in 2021.
The most traditional form of online advertising has made it into the app world very soon after mobile apps emerged in 2007. Banner ads can be displayed the entire time someone uses an app and do not require any advanced integration methods. The publisher gets paid a marginal amount for every minute a banner ad is shown. A more significant amount is produced when a user clicks on the banner to the advertiser’s website.
Being around for so long, users have gotten acquainted with banner ads and started to ignore them. As an alternative, Overlay ads emerged. Instead of appearing as a small banner, the user’s whole screen is filled with an advertisement for 10 to 30 seconds. While this makes it harder to ignore the advertising and may force some clicks out of users, it inevitably leads to more frustration and is one of the least user-friendly ways to monetize an app.
This form of advertising is still around for a reason, as it is easy to implement and a set-and-forget method to monetize your app. But especially when you start with a smaller user base, it makes sense not to annoy your users while still getting the most revenue out of each user. Always keep in mind that everyone clicks on a banner or an overlay. They are leaving your app – often to download another one. Because of that, banner and overlay advertisements are not the best ways to monetize your app in 2021.
Everyone knows in-app purchases. It is the most common form of monetization out there. To set a basis, there are various forms of in-app purchases a user can make depending on the app:
In-App purchases allow greater certainty as you can set prices for content and features yourself. However, there are two significant downsides to in-app purchases:
1. A study has found that 99% of all users are not willing to spend money on mobile apps. While it may sound harsh at first, your users will have to decide whether your app is worth spending money. This is only determined by the product they are using and not the hard work developers put in to make it happen to the end-user. This is why monetizing your app with in-app purchases can lead to disappointment. On the bright side, in-app purchases are easy to implement and can be used in virtually any app. If users find your app worth it, in-app purchases and even more subscriptions can lead to excellent financial stability.
Adding on to the financial aspect, every in-app purchase is “taxed” by Apple, Google, or any other app store provider. That means 30% of the revenue generated from in-app purchases will never reach the developers. When monetizing with in-app purchases, this has to be kept in mind when setting the pricing.
One of the best things about a subscription monetization model is the predictability it offers for developers. Once enough users are subscribing to a particular feature, it’s easier to estimate your future app revenue from month to month. Again, users will have to decide whether the subscription is worth it to them. Paying for an app every single month rather than just once requires a lot more value to be gained from your app.
While it’s certainly possible to make money from an app using a freemium subscription strategy, you will most likely need a large user base to create a feasible income from the fraction of users signing up for a subscription. We think that this is still a viable option that can be a great add-on to rewarded advertising, where users could earn your subscription every month – more on that in the conclusion of this article.
Offerwalls are the most common way to monetize an app with rewarded advertising. They present the users with a bunch of various tasks to complete to achieve a reward. This works brilliantly in games and dating apps, where tokens can be earned that unlock recent matches or characters.
Monetizing an app with an offer wall is excellent for your user experience, as it seems like a fair deal for the user. Watching a video or completing a survey to get something feels a lot better than being forced to do so. Due to the high engagement rates, rewarded advertising pays significantly more than banner ads. Combined with being more well-received, both app developers and users are more satisfied with this ad format.
Not all users are fans, though. Since offer walls frequently involve a user leaving your app (at least temporarily) to complete the offer, there's a chance that you'll lose their attention and won't get the back. Apple's tracking regulations have had a big impact on a significant portion of the offers, but rewarded videos and surveys are still viral offer types and widely available.
Rewarded Surveys allow you to monetize your users' opinions. Market Researchers are highly interested in bringing their surveys to people's devices. Depending on personal interests and life situations, a survey complete can pay a lot more than a traditional ad conversion. On average, users from the U.S. earn about $ 2 for single survey completion, leading to the ad industry's highest eCPMs. Monetizing your app with rewarded surveys has a few other perks, which we find more valuable than just high CPM values.
Your users will never have to leave your app, resulting in a great user experience and eliminating the fear of leading users away from your app. In our product, the BitLabs Survey Offerwall, we have put a lot of work into making the offer wall adapt to your design and app experience. We always want the user to feel right at home in your app, which we think is the best foundation to keep users interested.
Adding on to this, users are asked for their opinions on topics that are relevant to them. This is a lot more engaging than other rewarded ad formats. We have seen this lead to the willingness to take surveys repeatedly, resulting in very high revenues, even from smaller active userbases.
As a company that offers to bring rewarded surveys into your app, you would only expect us to say that rewarded surveys are the best, and you should give them a try. We think that many developers are leaving money on the table by going with one major ad network in a set-and-forget approach. In 2021, app monetization should be more than that. A mix of rewarded advertising, subscriptions, and in-app purchases would suit almost every app.
Paying users are great, and if your app is giving enough value to justify subscriptions and paid content, you should provide users with the option to make in-app purchases. However, we recommend having other options available for those who are not willing to spend money. This is where we think rewarded surveys are the best fit. We are biased, but for a reason: You can ask users to take a single survey instead of making the purchase or give them the option to earn credits or tokens over and over again through a survey offer wall. For a better understanding, see how we’re implementing our products to monetize dating apps.
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