Even after putting in their best effort in app development, why are so many app developers still unable to generate revenues successfully? In this article, our guest author Lina Lugova from Appgrow will reveal what’s working and what’s not in this new age of app monetization.
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App developers revenue: expectation vs realityDespite the discouraging stats you may have seen, apps can still make money. However, the days of just developing an app for a constant revenue stream are pretty much over. Apps have become the most powerful tools for user engagement. Even if your app does not compliment a bigger software or service, you can still strive for constant growth and development. Surprisingly, almost 54% of all apps have no decent monetization strategy. There are several reasons for this: some of them are made by non-profit organizations (eg Wikipedia), brands or corporations. But the main reason might be the fact that the vast majority of apps have not yet reached a decent amount of downloads to apply at least one monetization strategy properly. Here are the stats of Android app downloads per week – so the better your ASO strategy, the more likely you are to get users on the first couple of weeks after the app launch:
Three revenue blockers for in-app monetizationWhen monetizing an app, there is always the risk of a glass wall, when you can’t scale up your app revenue no matter what you do. Sometimes it’s all about your app quality, but sometimes the reason is external.
1. Overcrowded market + low user loyaltyYou may all remember the good old days when the user was not so demanding. He had an all-time favorite game and played it daily on his way to the office. Today, with thousands of apps being added to the app stores every day, the chance to reach the top of the chart or become viral is nil. The absence of brand awareness results in the pursuit to capitalize on earned media, eg TheVerge, Techcrunch and more. But even if the media is getting pickier, the user gets even more demanding. He doesn’t forbid bugs in UX or app functionality and if he sees an ad at an inappropriate time, he goes to the play store and rates the app badly. App ratings are important to developers, they influence downloads in the Google Play Store.
2. Wrong monetization modelWhen building an app, you always have app superheroes in mind: an app that you consider successful, or an app which idea you took for developing your own app. You see which app monetization model works for it, and decide to implement it too. There was a quiz app for children 9 – 11, which bombed them with banner ads and interstitials and charged 0,99 for each hint. Guess what happened — parents sued this app, rated it a 1 and abandoned it forever. The app monetization principles were the same as in many other quiz games but…for adults. If you are dealing with a children’s app, make sure you provide your audience with real educational value or entertain them. Add a “parental control” option which allows parents to control how the app is being used, it will surely make them feel safe about your app.
3. Managing multiple SDKsAccording to the stats, 74% of the top free apps have more than 20 SDKs integrated. It’s painful even to imagine how they manage all these. Basically, they just install the ad network SDK to find out what works and then forget to uninstall it even if it’s useless. The best way to keep all monetization SDKs together and manage them is to use app mediation platforms like Epom, InMobi, and more. They maximize your app profitability with the vast variety of ad formats. If you haven’t tried anything better than AdMob, then now is the time: some ad mediation platforms offer expert advice, free optimization and exclusive demand (Epom), some of them — exclusive geos (InMobi).
Working and non-working strategies to boost your app revenueWhen you are monetizing an app, you’ll most likely choose the most obvious and proven monetization strategies: advertising, in-app purchases, or both. It’s widely understood that ad revenue is highly dependant on user engagement – the amount of time users spend on your app. So the first dilemma of an app developer is figuring out how to balance between being loyal to the user while harnessing the desire to put an ad in every visible part of the app to recoup investments. According to the Research gate publication stats, the amount of downloads drastically affects the monetization strategy that the app developer chooses. But why is data monetization among them? The reason is that the benefits of using data monetization have been finally discovered by app owners. As controversial as it sounds, data monetization can bring decent revenue to app developers if it’s done right. Let’s compare the do’s and dont’s of every strategy, to help steer you in the right direction.
In-app adsIn-app ads are widely considered as a one size fits all. Video and display ad formats offer a great choice on how advertisers can reach the user without irritating him. However, the evergrowing mobile advertising industry attracted a lot of fraudsters, that are offering higher CPMs for showing fraud and auto downloads. Mobile fraud affects the entire industry: the ad networks, advertisers and app owners prefer quality over quantity in terms of traffic volumes. Aside from that, users still tend to hate in-app ads, and here’s why:
- The ad has no incentive: why click on it if it does not provide any value?
- Small ad size: in-app banners are usually too small, and they irritate users while providing zero conversions. Most of the banner clicks are accidental, and most likely you’ll just end up spoiling your karma. Use smart banners instead.
- Bad UI in general: no escape button, ad buttons that are not optimized for fingers (so-called “fat finger”), the sound is on, etc. A bad ad in the middle of maximum user engagement can result in no less than app abandonment.
- Zero relevancy, zero trust: an ad about donuts in a running app, or a credit offer in a child app is not that uncommon. If you aren’t on a first name basis with advertisers, brand safety can be a major concern for both you and him. Nowadays, less than 25% of users trust online ads, and it happened because app owners are usually a yes-man to scummy ad networks that pay more.