You have just made an app and you are almost ready to launch. The time has come to ask yourself one of the most important questions about your product: What is the best way to monetize your app?
Finding a way to make money is one of the biggest challenges facing startups in this field — and it’s one that cannot be ignored. Doing it correctly can secure you a return on the investment you’ve made, it can provide you with the finances to build your team, and it can allow you to make bigger and better products in the future.
But what is the best way to monetize your app? And what do you need to consider before you do?
Nobody enjoys ads. They are annoying blockades between customers and their entertainment. However, that doesn’t mean that customers won’t tolerate them if they have to, and if they are used correctly.
In-app advertisements are one of the most popular ways to monetize your app, but startups must consider how they are used. Long ads that appear in short bursts will quickly wear on even the most patient of customers’ nerves. Meanwhile, pop-ups that interfere with the use of an app will quickly prove to be frustrating.
You need to find a natural way to integrate your product with advertisements. Even consider ways that advertisements could enhance your app. Pandora has mastered this by offering ‘sponsored’ playlists among their music service, so too has the real estate app Trulia that provides a list of advertisements for agents that you can call alongside their content.
In-app purchases — things you can pay for within a free app — are controversial. Rovio’s Angry Birds came under fire for having them cost up to $100. Parents worried that their children were unknowingly purchasing them at huge expense. Some complained to network providers demanding safeguards to prevent this. Vodafone customer service heard these calls, and the network released a Vodafone Guardian app that introduced a ‘safe mode’ for children.
On the other hand, app developers who have attempted to incorporate them in subtle ways have often been unable to make money. The game Punch Quest, for instance, suffered because they offered too many free prizes that reduced the incentive to purchase items within the app.
Finding a balance between the two is difficult, but those who have succeeded have often seen their app soar to both consumer and financial success. When considering this as a route to monetizing your app, you need to take a look at what your product offers and how its services can be extended for a small financial cost in a way that is beneficial to both you and your customers.
The concept of a pay wall is very simple: you can only get so far into the product before you are asked to pay for it. The sports game New Star Soccer is one of the most popular examples of how this method can be used to monetize your app. It gives you the chance to play a few matches before preventing you from progressing any further until you buy the premium version.
As with in-app purchases, pay walls a complex area to navigate. If you don’t tease enough, it’s unlikely people will want to continue using your app. If you tease too much, people will reject purchasing it out of sheer frustration. However, when the balance is just right, a pay wall is one of the most effective ways to monetize your app by encouraging customers to purchase your product.
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