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Recent Trends in App Monetization

Numbers of Smartphone users are growing each day. In the mobile world things change quickly so it is important for developers to realize and understand app monetization models and trends. Sticking to a model for too long might mean losing out on the money-making race. Inapp purchases can provide for good revenues. With the decline of paid apps in-app advertising and Freemium are reaching broad user bases. Understanding of markets is important for app owners to target the right stream of consumers. With mobile territories expanding monetization is all set to reach high roads in the app marketing world.

Paid App and in-app Purchases

Five years back the only way an app generated its revenues was by being a paid app. The trend changed with the introduction of inapp purchase system. Surveys in 2015 suggest 59.5% as paid apps and 30.9% in-app purchases and the remaining 9.6% for advertising.

Though the numbers are not highly different (when a comparison of numbers from gone by years is done) but this is a changing trend which needs to be taken seriously. Developers remain worried of implementing in-app purchases into apps. Some of the well-known in-app purchase options are Clash of Clans for functionality, NY Times for usage, SoundHound for User Experience, WhatsApp for Time, etc.

Companies like Skype and Evernote do not focus on in-app purchases. Evernote provides its users with premium versions. Skype on the other hand gives Skype credits inside the app.

What developers need to look into is the type of their app and the functionality. That way a route map for suitable in-app purchase options can be developed. In-app purchases are not considered huge revenue earners. But developers must keep track of app monetization trends as technologies keep changing. Numbers for paid apps are decreasing but still paid app market is still running high over in-app purchases.

Paid Downloads

With numerous apps flooding the market there are several players offering free services for apps. It is difficult for new comers tog in traction via the paid app route. Businesses trying to get a grip on the market are advised to take inapp purchase/ Freemium route. This allows users to try a part of the app or the whole app for a limited period. Based on their experiences they can decide to invest in the app.

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In-app Advertising

Large number of developers prefers this revenue model as it is a two-way process. There is promotion clubbed with sales. Right marketing strategies need to be set, in order to attain desired revenue figures. There is no assurance to the profit numbers as revenue per user is not assured. Going by the current trend banner ads are not favored by major mobile advertising companies. Native ads are considered hassle free. Focus on users has made it essential to have native ads as user experience suffers minimum hindrance.

Top developers have switched to various forms of in-app advertising. Gartner carried out a survey in 2015 which indicated a substantial decline in the percentage of paid apps. Geographical regions will evolve greatly with increased mobile channel and 360-degree advertising campaigns ushering growth and emerging economies. Given below is a table including worldwide mobile advertising revenue including a veritable future projection:

Mobile Advertising Revenue by Region, Worldwide, 2012-2016 (Millions of Dollars)

With the rise in internet users there has been a rise in opportunities for app developers. App monetization will increase in its reach and scope as long as there is a rise in mobile device along with internet users.

Source: Gartner (November 2012)