3 Strategies to Convert Your App into a Revenue-Generating Machine
While there are many ways to monetize your app, it’s critical to determine the best strategy for your apps and your users. If done well, you’ll have a successful method you can monitor and manage that will generate a profit! We are not suggesting that monetizing your app alone will allow you to rake in a stable and steady income; instead, you should be realistic with achievable stepping stones to build a steady stream of users and income. This guide is a methodical approach to achieving a robust and active user base who consistently engage with your app, ultimately generating revenue. Unfortunately, it’s more likely you won’t strike it rich right off the bat, but if you are invested and diligent, you can be rewarded.
Millions of apps generate revenue; we want you to join that impressive demographic. In fact, according to Statista, revenue generated globally from mobile apps was projected to reach 430 billion U.S. dollars with “an annual growth rate (CAGR 2022-2027) of 6.91%, resulting in a projected market volume of U.S. $641.10 billion by 2027.”
Let’s look at three ways to monetize your no code mobile app.
1. In-App Advertising
Advertisements are well-known across all types of media. We see them in shows we watch, podcasts we listen to, and websites we visit. However, with mobile apps specifically, app developers can leverage the placement of ads within their app to generate income. This approach is generally preferred because it allows your users to generate revenue passively for you without them having to pay a direct cost.
What Is It?
In-app advertising (IAA) uses space within an app to display ads in the form of banner ads, videos, or interstitials. This works in the same way as ads on YouTube by utilizing real estate on the video portion either as a banner or ad breaks within the video itself.
There are a few models you can implement into your mobile first design process:
Banner Ads: Banners are usually placed at the top or bottom of the app screen and will be static or animated, generally showcasing a call to action (CTA) to direct users to the promotion on the ad. When clicked, the user is taken out of the app experience to learn more about the product or service.
Interstitial Ads: These ads tend to be displayed in areas of your app that won’t interrupt the user’s experience as they move through your app. Interstitial ads can be placed when users move between screens or menus. This increases the likelihood of generating clicks and not bombarding your audience with ads. These ads are typically placed after taking action, like beating a game level or loading a piece of content. These ads try to seize the opportunity gap in attention when the user has just taken action and is waiting for the reward.
Playable Ads: These ads expose users to what they could have access to if they were to make a purchase. These are often used for games as a “try before you buy” interactive ad. These ads can be in an opt-in format and generally yield high-intent buyers. By allowing users to opt-in or ‘X out’ of the ad, the advertising service does its best to capture the attention of the right user at the right time.
These are just a few examples of in-app advertising, but app developers can layer in different forms of ads during their no code app creation process. Then you can decide which ad avenue works for you as an app developer. It can be one or all of the above options. The key to remember is that ads shouldn’t interfere with user experience. Instead, it should accompany the experience so users want to engage with your app, and, in the process, they happen to see advertisements.
You must find the perfect balance between serving ads and not disrupting users. For example, most digital advertising agencies are moving away from static banner ads because of “banner blindness,” which makes audiences immune to banners since they are prominent across many digital spaces. A banner ad on your home screen may seem like an excellent way to incorporate monetization. Still, we’d challenge you to go deeper by thinking about where in the journey the user would be receptive to seeing an ad in the journey. For example, instead of a banner, try a reward video when a form is completed instead of a banner.
The best way to integrate ads into your app is through AdMob. Powered by Google, Ad<ob helps app creators “earn more money from their apps…by matching ads to your app based on criteria you set”. The benefit of AdMob is that they connect you with advertisers, and you get to choose how and where the ads get played in your app. You can add AdMob to your no code mobile app with just a few blocks.
If you decide to bring ads into your app, you must ensure you benefit from your decision and not lose audiences. You will need to track key performance indicators (KPI) like daily active users (DAU), monthly active users (MAU), and average revenue per daily active user (ARPDAU). You should also choose the best cost model for your needs, which can include cost per click (CPC), cost per thousand impressions (CPM) or cost per action (CPA).
To start your monetization journey within your no code app creation, you must choose the best strategy for you and your audience. You can use one method exclusively or combine different techniques to maximize revenue. A hybrid monetization strategy can look like making some in-app purchases ( we’ll get to that soon) branded to your app and IAAs, which will direct users to sites or apps outside of your app.
2. Subscription and Freemium Models
We all know subscription models, from streaming services like Netflix and Hulu to dating apps like Tinder and Bumble. Similarly, you are probably utilizing freemium models without even knowing it. Statista reported, “Apps offering subscription plans are becoming increasingly popular in monetization. For example, in 2020, the leading subscription apps in the Apple App Store generated more than 10 million U.S. dollars in global revenues.”
Let’s look at how you can utilize subscriptions and freemium models to profit from your app.
What Is It?
A subscription offer within an app depends upon the app being free to download. However, to access the app's content, users need to purchase a subscription to access the app's content. For example, think of the Disney+ app. The user must sign up for a subscription tier to access the content. Freemium plans, however, tease features to entice users to make a purchase or subscribe to a service. For example, an app like Headspace offers limited features for free, such as daily meditation, but to access more in-depth features, users need to pay to unlock the rest of the app.
For freemium and subscription models, it’s best to give your users a phenomenal free experience that allows them to see the value in your no code mobile app. But don’t give away too much for free! Give a preview of your best content, game, or experience. Demonstrate value to your audience first, then carefully gate the premium materials, which will naturally entice users to upgrade and pay.
With subscription and freemium models, you should keep track of your app’s downloads and active users. Tracking these metrics will give you a baseline on the audience size you need to convert. From here, you can use marketing tactics such as re-engagement or offer promotions to encourage your users to subscribe to your app or content.
3. In-App Purchases
In-app purchases (IAP) are a common way most apps on the market generate revenue. You may have encountered them yourself in some of your favorite apps. Keep reading to better understand what IAP is and how to implement it seamlessly in your app.
What Is It?
In-app purchases are a monetization method whereby users can exchange money to enhance their experience within the app. In-app purchases can be offered in two different ways: consumable and non-consumable.
Consumables are “products that can be used once (consumed) and then repurchased multiple times.” Consumables are often found in games to purchase extra lives or in the case of dating apps like Bumble, to offer Bumble Boost, which allows you to access unlimited swipes or extend time on matches with a set expiration. Non-consumables are items you purchase that have no expiration and, once purchased, the item remains permanently in your app. Within the gaming category, this can look like buying skins for characters or unlocking a new level.
The intention behind in-app purchases is to entice users with tantalizing offers to get them to make a purchase to boost the app’s revenue stream. According to Sensor Tower data, “worldwide consumer spending and first-time installs of mobile apps climbed to $33.6 billion and 35.7 billion, respectively, across Apple's App Store and Google Play in the third quarter of 2021.” App developers get paid for these IAPs from the app, the app store, or third parties.
Let’s dive into some best practices to prepare your app for a revenue stream.
Most successful apps that make money from IAPs are free to download. Why? Because this gives audiences a chance to check out your app’s content before investing further. By allowing your audience to explore through the app, they get to see the value you bring them, and by locking exclusive features, you create that desire for more which will entice them to ultimately make a purchase. According to Statista, “In recent years, the growth of global consumer spending on apps has shown users’ healthy appetite for premium services or paid app content.”
The most successful monetization methods are discreet, not overwhelming, and enhance the user experience. As an app developer, you want to integrate the selection of consumables and non-consumables to best fit your app’s brand and needs.
Some methods for setting up your app for success through in-app purchases are utilizing gamification methods, personalization, offering rewards or bonuses, and re-engagement methods.
To understand the success of implementing a new revenue model into your app, you need to keep track of its success and understand how to pivot or change your method when needed. Some KPIs to track include daily active users (DAU), monthly active users (MAU), average revenue per daily active user (ARPDAU), average session length, and user retention rates. This might feel a bit overwhelming, so you can start with tracking one metric and then build from there. Remember: the key to success is diligent monitoring, analysis, and optimization.
Begin App Monetization with Thunkable
Monetization methods are vast and varied, and with Thunkable, the best no code app builder, we make it easy to get started monetizing your app with a few simple steps. Then, with the right placement and user experience in mind, you can choose a strategy that works best for you and your audience.
To learn how to leverage your no code mobile app as a revenue generator, follow us to our next blog, “How To Implement an App Monetization Strategy”.
Need more assistance with your business needs? Reach out to our team so we can get you started on your no code app creation journey!