App Monetization Statistics: In App Advertising And In App Purchases

With the rapidly evolution of mobile elements it is very challenging to create the perfect monetization strategy for your app. You are probably thinking: What is better, in app advertising or in app purchases? But, our question for you is: Why not both? Yes, it is possible. Let’s see how.

Free And Paid App Models

It is a big decision for you to make when you are about to upload your app on the market, if it will be a free or a paid one. But if you take a look at the forecast published by Statista for this year you realize that you have minimum chances to attract users with a paid model. Think about a second. Why somebody would spend money on something when there are so many free alternatives? So, to gain money after you invested so many resources into creating the app you need to go with in – app purchases. But, we will show you why you need to think out of the box and take actions in increasing your revenue.

Image Source: https://www.statista.com/statistics/271644/worldwide-free-and-paid-mobile-app-store-downloads/

In App Purchases And Advertising To Complete Monetization

As we promised, we are sharing with you the why and how of a complete monetization strategy.

Mobile In – App Purchase Is Not Enough

If you based your income flow only on in – app purchases you probably noticed that it is not enough. The reasons are obvious.

Higher User Acquisition Costs (CAC)

Even with a small decline in December, user acquisition costs continue to have high values for both markets. In October, CPM was over $4 on Android and almost $7 on iOS. Of course, that happened due to the launch of iPhone 7 but CAC is still a dynamic factor which influences the evolution of your plan.

Low IAP Rates

There is no need to mention that even if you have some results after adopting this model, the values are still small. You can see the low numbers published last year regarding In – App Purchases made in spring, 2016 all over the world for both Android and iOS apps.

Image Source: http://marketingland.com/app-purchases-dominate-ads-app-store-lifetime-revenue-hits-71-billion-183953

Low Retention Rates

For increasing your revenue with IAP it is mandatory to have a high retention rate, because there are minimum chances for new users to make any purchases. Sadly, this is a general concern for every app owner in mobile environment.

Mobile In App Advertising Is Phenomenon

In the past, in app ads where rejected without second thoughts, now with all the innovations in this industry things have changed in a positive manner.

Great Ad Formats

Just 3 weeks ago we discussed about the most popular ad formats of 2017 and we highlighted the impressive effect of those types on user retention.

Exploding Ad Spend

As you can see in the chart below, eMarketer predicted that mobile ad spending in 2019 will reach astonishing levels. Who doesn’t want a piece of this?

Image Source: http://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/

Advanced UX

If you take a closer look to Mobile Advertising Trends That Will Dominate 2017 you will realize how far this domain has reached for impressing users. There won’t be much until the interest for the ads will be related to their need of using your app. And this will be possible especially with the use of new technologies like AI, AR or VR.

High Revenue Income

As you can see the revenue forecasted for the up coming period for mobile advertising is huge. Why to settle with just the income brought by in – app purchases if there is so much to receive from sharing some space inside your app to promote brands who are willing to pay for it. The condition is to adopt the right technique.


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Best Practices For Mobile In App Advertising

In app advertising doesn’t mean to throw a blinking banner on the screen and pray that users will click on it. They won’t and you will lose them. Now let’s see the proper approach.

High Performance Ad Units

Study the latest trends related to ad formats and discover what is working and what is not according to your app category. Testing their performance will show you what to choose for maximizing your profit.

Consider UX First

Adding ads inside your app doesn’t mean that you have to provide poor user experience. You can display an ad like a small break between activities or after users completed their tasks. Using rich media and avoid being intrusive will be a winning combination for your plan.

Best Practices For Mobile In – App Purchases

We have an entire guide for you when it comes to in – app purchases. Let’s underline the most important factors which will influence the success of your app.

Know Your Customers

You can’t convince users to buy unless you know what they are looking for. There are multiple methods to connect with them. For example, building a community around your app, or using in – app chat. This is one of the three major feedback channels you can use to really discover your users’ opinions. We wrote many articles related to this topic and we will continue with this subject in the future because this should be the base for a successful strategy.

Engage Users

After you consider users’ preferences you have to make sure that they enjoy using your app. They will never make in – app purchases if they just open the app and then they leave. As we always say user acquisition is just the beginning of the road. After that, it starts the real fight. Attracting users into the vortex of your app will increase the chances to make them spending their money.

Timing

Related to the step above is to find the right moment to show them what you have to offer. It is not an easy job but you need to consider when they reached the maximum level of engagement. That is the right time to show them your premium features and to convince them to make in – app purchases.

FINAL THOUGHTS

Why to rely your revenue only on in – app purchases when there are so many opportunities to have a higher income if you mix your plan with effective in app advertising methods? Don’t let others to brag with their success and take advantage of the complete monetization strategy presented above since you have nothing to lose. It is all about winning.

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