Advantages and Disadvantages of Mobile App Monetization

Mobile App monetization can be defined as a way of generating revenue from mobile apps using strategies. Like we already know, every investment is made with an expectation of ROI, and the same fact applies to mobile apps as well. Regardless of the type of app you offer, monetization methods are implemented as paid marketing is crucial for mobile app success.

There are many different ways to monetize your app, and it depends on the type of app you are offering. Most apps are free at the install point, which makes it even more vital to adjust the revenue model to account for this. Mobile app monetization involves multiple strategies: paid downloads, in-app purchases, in-app subscriptions, in-app advertising, etc. It is important to understand that some apps focus on a specific area of the monetization strategy, and some may incorporate more than a single strategy to generate revenue from the app.

No matter which monetization method you choose, advantages and disadvantages are part and parcel of every monetization strategy. Making money from apps is no easy task, and we must understand the pros and cons of every monetization model before we invest in it. This guide will discuss these monetization models and disclose the perks and perils associated with them. After reading this blog, you will learn how it works and how to best ensure revenue generation with your choice of a mobile app.

App Monetization Strategies: Perks and Perils

Let's dive straight in. The different types of app monetization models include:

• Paid downloads/Premium apps.

Premium or paid apps demand users to pay upfront to download from the app store or Google play. This model is a good approach for apps that boast strong brand names.

*Advantages: Paid app advantages include growing revenue, intact user experience, limited storage or maintenance, loyal and engaged customers, high user engagement, fewer competitors and better quality than free apps.

*Disadvantages: People who don't want to pay, stay away from paid apps, continuous pressure to facilitate maximum engagement, high design costs, limited monetization options.

• In-app purchase model

Also known as the freemium model, these apps can be downloaded for free, but some features remain locked. To enjoy those features, you need to pay. These features are made available to customers in packages called in-app purchases.

*Advantages: Higher chances of getting large profits, making multiple purchases, steady and reliable income generation, light user experience effect, and significantly drive user engagement. There is also a factor of increased attractiveness, more installs, positive reviews and even low expectations from users.

*Disadvantages: The perils include a huge competition in the market, users get used to free content, pay commission to big shots like Apple and Google. Moreover, when implemented poorly, the in-app purchase leads to dissatisfaction in customers and bad reviews. Lastly, the development cost is also high.

• In-app subscriptions

App subscriptions can be set up for weekly, monthly or annual fees for a specific service or feature offered by free apps. Google Music, Spotify, etc., are popular in-app subscription models that let customers access as per their chosen subscription package.

*Advantages: More users everywhere, the convenience of browsing inventory and choice; the features offered could be endless with choice galore. Apple and Google also offer auto-renewing subscriptions and create recurring revenues until customers cancel subscriptions.

*Disadvantages: Potential drawbacks include Increase in data errors, software integration issues, poor inventory visibility, poor m-commerce experience, etc.

• In-app advertising model

Popular and most convenient mode to earn money from apps. However, there is no one size fits all approach to this model. Each app implements different ads such as banner ads, interstitial ads, native ads, affiliate ads, reward ads, etc. These are quick to implement, and without this model, many apps won't even sustain long enough to generate profit.

*Advantages: With CTR, this model elevates the income, and the chances of gaining your target

audience look much higher. This model also measures user engagement and increases traction.

*Disadvantages: The ads are limited to function with many users, pop-ups of irrelevant ads, high chance of getting ignored by the customers, potential time to time interruptions, additional ads will irritate users as well.

We hope that this blog gives you a good understanding of mobile app monetization's advantages and disadvantages. The bottom line is this: if you want your app to make some money, you need to understand how free and paid monetization models work effectively. Another crucial point- not to compromise on the quality. Do you want to earn money from a telemedicine app? Invest in the best telemedicine app development team that would provide you with extensive IT consulting and professional advice. Whether you decide to make a paid app or charge it free, the pros and cons of your chosen app monetization model should be thoroughly investigated. Only then can you yield better results.

Natalia Jane is a freelance app developer in India. She loves to read a lot. She is really passionate about her coding skills.