Service-Based Monetization: What are the Growing Trends?

This week we have a guest post about The Growing Trends of Service-Based Monetization from our friend Eden Beinart, Marketing Manager at Appnext. She is passionate about App Marketing and loves writing about Mobile Growth. Follow her on Linkedin or contact via Twitter.

Facing The Facts – People Download Less Apps

People don’t download apps the same way they used to a couple of years ago. That is a fact. My phone looks like an all you can eat buffet filled with apps I don’t need, never use, and too lazy to delete. Seriously, my phone is so crowded that sometimes I can hear my mother screaming at me to clean it up. At this point, it would take a freaking miracle for me to download another app, and unless there’s an app that solves world hunger or has the cure for cancer it ain’t happening.

People use about 10 apps a day and getting them to install new apps is a hard nut to crack:

Number of used apps per day

Source: App Annie

They know what’s out there, they know what they want to use, and they look for new apps less and less often. Just check out the below chart of the most popular apps in the US.

Facebook is the most popular app in the USA

Source: Searchnative

Not exactly surprising that Facebook and Google are dominating the chart. These top brands have managed to gain our trust and become an inseparable part of our daily lives but where does that leave everyone else?

According to a report by AppAnnie, emerging markets like Indonesia, Vietnam, and India (+ certain cities in China) will see a surge in app downloads through 2022 but what about mature markets?

In mature markets like the US, Korea, and Japan, the combination of app availability combined with less frequent downloads will require publishers to invest more to acquire each new user. Publishers need to find innovative ways to nurture app downloads and engagement. One approach currently gaining popularity is Service-based Monetization.

Service-based Monetization for Apps – What Is It?

Service-based monetization is an innovative business model that adds a brand-new dimension to the classic in-app purchase and ad-based monetization methods. It is based on a simple and powerful idea that people need services and solutions to their specific needs in real-time. Service-based monetization helps users compare their options to make the best choice for them, such as deciding which taxi to order, the best way to navigate through urban jungles, or what types of food to order on lazy Sundays.

Service-based Monetization is not meant to replace existing ad monetization models but to provide publishers with an additional source of revenue that doesn’t come at the expense of user experience.

Turning Apps Into Service Hubs

Leading companies like Google, Facebook, and China’s WeChat monetize by turning their apps into service-hubs.

Google Assistant offers its users the ability to search for over 1 millions actions. Users can manage tasks, listen to music, find nearby services, pretty much do anything from their device.

Over 1 million of actions offered by Google Assistant

Facebook is trying to fight banner blindness and enhance the user experience by monetizing through other services. According to eMarketer, about 80 percent of smartphone users are on messaging apps so it’s no wonder Facebook is choosing its Messenger product as one of its key monetization strategies.

“Our people are spending the whole day on Messenger, and they want to be able to run their life from Messenger,” said Kemal El Moujahid, Facebook’s product manager for Messenger and virtual assistant M “Being able to consume these services without having to download an extra app is a huge added value for them.”

Facebook Messenger provides users with suggestions (according to keywords) for certain actions. For example, users can order food from local restaurants using the app Instead of competing directly with other food ordering services. Facebook partnered with several industry players such as EatStreet, Delivery.com, DoorDash, and others.

WeChat is a perfect example of an app that completely transformed into a service hub. It’s dominating China by providing users with added value in the form of content and services. Users can chat with friends, order food, shop, pay for goods and services, all from within the app which is why 46% of Chinese users have made it their number one app.

WeChat is dominating China

WeChat has over a billion monthly active users. The app/service hub is available in 25 countries and offers 13 different currencies. 50% of WeChat users spend 90 minutes of their day in the app. The range of services in the app provides many revenue streams for the company, and it is estimated to be worth over $100bn!

More and more apps have started to offer their users other services. Recently, India’s popular messaging app Hike incorporated Ola cabs into its app to provide its users with a quick and simple cab service. Hike users can set pick up and drop locations, track the ride, and view the driver partner details from within Hike.

OLA App - Cab Service

No additional setup for a payment system is required as users can pay directly from their Hike Wallet.

Appnext enables all publishers to monetize services and turn their apps into platforms through Appnext Actions, a non-ad product that provides publishers with the same capabilities available to the industry giants. With a simple integration, every app can turn into a service hub, providing users with added value while generating an additional revenue stream. India’s leading news app DailyHunt and popular US messenger TextNow have already implemented Appnext Actions offering their users cab, food delivery, entertainment, travel and shopping services.

Conclusion of Service-Based Monetization – Be of Service

While app downloads will continue to grow in emerging markets, publishers will need to come up with different monetization strategies for mature markets in order to make money. These strategies must place users in the center and provide them with added value.

Service-based Monetization is one method worth trying… Just ask Google, Facebook, or WeChat.

What do you think about Service-Based Monetization? 

Let us know in the comments section below! 

The Growing Trends of Service-Based Monetization for Apps
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