In this article I am going to expose the main 4 strategies that I follow to monetize my applications and that allow me to live as an independent developer.
I don't need to explain the rise of smartphones, or that mobile use has surpassed desktop computer use in many fields. Either because you want to dedicate yourself to this full time or because you want to get an economic return on your pet projects, here I will explain how to get the most out of each of the following strategies:
- 💰 In-app subscriptions
- 💰 In-app purchases
- 💰 Ads
- 💰 Affiliate links
To finish, I am going to explain the strategy that I follow and that combines all the previous points to be able to monetize your projects to the maximum. Without further delay, let's study each of the strategies:
Strategy #1: In-app subscriptions
Offering subscriptions within an app or game is for me the best way to monetize it. For this, we first have to formulate a value proposition, that is; offer something to our users so that they decide to pay for it on a regular basis, and the reality is that it is easier said than done.
One of the most used use cases by developers is the freemium model, in which a set of basic features is offered for free and another set of premium features is offered to those who wish to pay for them. This model has the advantage of attracting a large audience, since users can first see and try the app or game and, if after having enjoyed the basic features they consider it appropriate to pay for the most advanced ones, they can do so through the subscription.
There are other business models, for example restricting 100% of the app or game under a subscription, but allowing the user to try it during a trial period. Although both this model and others can be more profitable in very specific cases, in my experience in most cases the freemium model is the one that can potentially have the best results.
Tips to get the most out of the freemium model with in-app subscriptions
- Carefully consider the overall value proposition of your project. Analyze what are the basic features that best highlight your app or game and what could potentially be the upgrades that people would want to make on those basic features.
- If you think a feature could be used by a large audience it makes sense to include it in the free part. If instead it is something very niche that only certain groups of people could take advantage of then add it as a paid feature.
- The way you present your subscriptions matters. The subscription screen must clearly state the advantages that subscribing members will enjoy, as well as the different payment methods (monthly, annual...). Long product pages with detailed descriptions usually work best. This is because people want to know what they are going to pay for, they want to know as many details as possible. I suggest you not to be concise but to expose in an extended way the payment improvements that you propose.
- Present your subscription screen right after the initial onboarding of the app (if you don't have an initial onboarding screen, I suggest you create one, it helps the user a lot at the beginning when they don't know what your project is about). Although it may seem like a somewhat aggressive mechanism, many users, after having analyzed your store page, and after you have explained to them all the good things that your app offers, will be willing to buy; or at least to start the free trial.
- Always add a free trial. In my case, when I was analyzing the refactoring of my Super QR Code Reader app, I saw that what interested me the most were the annual subscriptions, so I opted to add a free trial only to the annual subscription; as a dissuasive mechanism for the user to prefer it over the monthly subscription.
- Always be transparent and never lie to the user. Clearly and unequivocally present the price of your subscriptions, the premium features they include and their duration. It is in your interest to have a healthy relationship with your paying users, if they see that you have deceived them they will not hesitate to cancel their subscriptions and leave you a terrible review that will not help you in the future growth of your project.
Strategy #2: In-app purchases
These types of purchases are similar to subscriptions, they are used through the same APIs, however they have the peculiarity that instead of being a recurring payment, it is a one-time payment.
From my point of view, the in-app purchases make sense in the following cases:
- If you consider that the extended value that you provide in your advanced functionalities within the app or game does not justify a recurring payment. For example, if you only offer a small add-on to free users, users may find it excessive that you ask them for a payment every month or every year; however, they could understand that you asked them for a single payment. In my particular case, since most of my apps are small and simple, I provide users with the ability to pay one time to unlock a small set of advanced features.
- If in your project you have the concept of a consumable, for example an extra life or a chest of special objects within a game. In this case you could offer the user the possibility to buy that consumable only once. The positive part regarding the previous point is that being something that is bought and consumed, the user has the possibility of buying another unit of the same element; with which we could consider that this strategy is more profitable than the previous point.
Tips for getting the most out of in-app purchases
- The most fundamental aspect is to differentiate it from subscriptions. As a general rule, you will prefer a subscription, since it is usually much more profitable, however, if you see that users do not subscribe or do not show interest in your offer, consider changing it to a one-time purchase. In my case with my Notification History app I initially did add subscriptions, however I noticed that users found the premium features too simple to justify a subscription. I changed it to be a one-time purchase and that was a good idea, since I usually have quite a few users who buy the premium lifetime package.
- If you have a game strongly consider implementing consumable purchases. In that case make sure that you really create an attractive package that includes a substantial value proposition for the player, since if they make a purchase once and they are happy with what you have provided, they are likely to make more purchases.
- Another successful strategy is to take advantage of certain times of the year, such as holidays or Christmas, to offer discounted products. Since the offer is temporary, many users will tend to make the purchase during this period in order to take advantage of the offer.
Strategy #3: Ads
As annoying as they are, after in-app purchases, ads are the next best way to monetize an app or game.
I don't need to expose the myriad ways an app or game can display ads, we see them all daily in the form of inline banners, full-screen interstitials, bonus ads that reward us if we see them through to the end...
My recommendation is that you combine the ads with the previous monetization strategies, and add the option to remove them as an advantage to those premium users of your app. In this way you will be monetizing those users who are not paying a subscription nor a one-time access; while at the same time offering them one more incentive to do so.
Tips to benefit from ads
- If you have an app, consider focusing on inline banners. This type of ads can be placed in many places, generates many impressions and therefore many clicks, and it also has the great advantage of having a slight impact on the general user experience.
- You can add interstitial ads in some key points of your app or game, however I advise you to do it very carefully since these types of ads block the user and do not allow him to continue using your software until the countdown has finished. My recommendation is that you carry out A/B tests to determine the optimal frequency of this type of ads with the least possible impact on the user experience.
- If you have a game, or if you have an app in which you think you can provide rewards, consider using bonus ads to encourage the user to watch them to get their reward.
- Like I said, no one who pays for a subscription or has paid for lifetime premium access should see ads; I strongly suggest you add removing ads as a premium perk.
- Be careful about the ad providers you use in your app or game. The advertising industry is plagued by entities that abuse users by extracting every bit of data possible, and you would be acting as an intermediary for them. Not only is this unethical, but it can get you in trouble with store policies. Always use reputable ad providers that come from reputable companies.
Strategy #4: Affiliate links
This strategy is a little less straight forward than the previous ones. It basically consists of:
- Reach a commercial agreement with a company or brand which agrees to pay you a commission when you send them clients
- You would then have to create specific ads within your app or game to encourage them to buy from that company or brand
- Unlike ads, you will only collect the commission if the user has gone to the brand's website or app and has performed a conversion action; which is usually a purchase or has started a free trial.
Since the user not only has to click on the link, but also has to buy something on the site, the general performance of this type of campaign is much lower; however, they can be compensated by the high commissions offered by the brands.
Tips to get the most out of affiliate links
- Read carefully the conditions that they propose so that you can collect commissions, and evaluate if they are really offering you a profitable and achievable deal.
- The type of company or brand that you are going to advertise in your app or game must be in tune with the general nature of your project. For example, it would not make sense to promote meat products if your application is for vegan people.
- As I said, the overall conversion of this type of campaign is lower than that of the ads, that is: there will be more people who click on the ad than those who actually buy on the advertiser's site. Therefore, I advise you to combine this strategy with normal ads, and perform A/B tests to determine the optimal frequency.
How to combine the above strategies for maximum gains
Now comes the good part, we are going to combine all of the above to increase the general performance of your app or game and, consequently, your profits:
- At the origin of everything is the value proposition. None of the above strategies is going to be useful to you if the value that your app or games provide doesn't fulfill user needs and expectations. If you have an app, make sure it does the job and solves the problem it was designed to solve. If you have a game, make sure it is of quality and provides large doses of entertainment to users. Before working on monetization, work on the value proposition of your project.
- Now that you have a useful app or game that users enjoy, start adding ads. It is better to fall short than to go over. Start by adding inline banners, and a few interstitials. Add bonus ads if you have consumable products. Pay attention to the feedback from users, to the reviews that they leave in the app stores to see if they are satisfied with the number of ads you have in your app or game. If you see negative feedback left because of your ads, consider reducing the volume of them.
- Now that you are monetizing all users, consider adding purchases and/or subscriptions. If your value proposition has enough weight and continuity, add subscriptions. Otherwise add one-time purchases. You can also combine both, for example you can add a monthly subscription, another annual, and then a single purchase (which logically has a much higher price) to unlock everything for life.
- Now look into adding affiliate links. I would leave this part for the end since it is the most complex mechanism to add, not only at a technical level, but also at a logistical level. Run several A/B tests to see the best way to combine them with the ads.
Once you have done this you already have the base, but the work does not end there, quite the opposite: you have to continue doing this process in a loop throughout the life of your app or game, this is called optimization:
- Use A/B testing tools like Firebase to find the best combination of elements. At first you may have many questions about the number of ads, their position, what subscriptions to offer... it is normal for all these questions to arise, and it is normal not to know the answer. To do this, use this type of tools that will give you certainty in the form of data.
- Always pay attention to feedback from your users, whether it is direct feedback through email or other mechanisms (by the way, I suggest you have a feedback form somewhere in your app or game) or indirectly through comments from the app stores. Always ensure that the user experience is good, that will make your app grow and have a long-term upward projection.
- Do not forget the marketing of your app or game. Having a refined ASO strategy and investing in paid acquisition will be a way for your app or game to reach a larger audience, and also your income will also grow.
In this article I have explained the way in which I monetize my applications. It is a fairly standard mechanism within the industry that usually gives results. If you want me to delve into some of the topics that I have discussed do not hesitate to leave me a comment below.
Good luck with your projects!