5 Winning Android App Monetization Strategies for 2017
Although the App Store made $ 14 billion more than Google Play last year, 50% of mobile vendors now prioritize Android over iOS. Thanks to Google’s decision to introduce the 85/15 revenue split for subscription apps and allow developers to process payment transactions, Google Play may soon outpace the App Store both in terms of downloads and revenues. Here’s how to monetize an Android app in 2017 and beyond.
What’s the best way to monetize Android app in 2017?
- Ads. This year ad banners will make app stores and publishers by $ 52.1 billion richer. Monetizing and promoting Android apps with ads is a piece of cake since Google Play gets 100% more downloads than the App Store and prohibits ad-blocking software. Popular applications (including streaming services and casual games) make decent money on ad impressions. If you consider taking the ad approach, keep in mind that new Google Play entries with 25 thousand active users generate a little over $ 700 in monthly revenues (which translates into 300 thousand impressions or $2 for 1 thousand impressions). With Pay per Click, you will earn anything between $ 0.5 and $ 3 from every conversion. The technique is often chosen by companies that partner with other brands through sponsorship (monthly fees or revenue split) to promote their products and services. In this case, however, you should develop a niche app with a specific target audience, craft high-quality banners and choose the right time to display promotional content (smart targeting improves engagement by at least 60%). Make sure your average revenue per user covers software dev and maintenance expenses;
- Upfront payments. Although iOS users continue to spend 400% more than Androiders, going “paidmium” still makes sense on Google Play – after all, Minecraft: Pocket Edition and Bully: Anniversary Edition (both titles are priced at $ 6.99) hold the 1st and 2nd spot of the top 50 paid apps chart, respectively. The model, however, has several downsides. You need to promote your application heavily and do your best to deliver value to users (nobody wants to spend 7 bucks on an unknown program). In order to reach the goal, you may turn to paid advertising, discount your app (though you can’t price it below $ 0.99) and encourage users to rate it through review plugins and gamification;
- Classic Freemium. An app is downloaded for free, but some of its features (unlimited storage, exclusive content and upgrade options) are only available to paid users. Dark Sky, a popular weather app that provides hyper-accurate weather forecasts, was launched on Android in May. While its iOS version falls under the paidmium category ($3.99), Androiders can download it for free. The “lite” app, however, offers daily and weekly forecasts only. Premium users ($ 2.99, annual subscription) can access down-to-minute forecasts on their lock screen and turn on rain notifications. Despite receiving mixed reviews from Android users who felt the app monetization strategy was unfair, Dark Sky remains the 5th top grossing weather app seven months after its launch;
- Subscriptions. Although the model is often overlooked by Android developers and publishers who pursue traditional app monetization strategies, subscriptions usually bring 200-300% more revenue than paid downloads and ad banners and 50% more revenue than in-app purchases. Provided you create high-quality content, the strategy will help you maintain user engagement after the novelty wears off;
- In-app purchases (IAP). All of US 50 top grossing Android apps use the IAP model. Such apps provide compelling functionality for free and charge for additional features like in-app currency, artefacts enabling users to unlock further gameplay and custom settings. Your task (especially with mobile games!) is to make an app “free to play” but “pay to win”. Here’s what Niantic did. In 80 days after Pokémon GO’s launch, the viral game registered over 550 million downloads and made $ 470 million worldwide. Although paid Pokémon GO users had an enormous advantage over ordinary players, the game was never about winning, since every player had his own goals. With the introduction of the egg hatching option in early December, Niantic overhauled their monetization strategy: if you want to catch rare pocket monsters, you have to buy incubators to hatch as many eggs as you can. Thanks to the new feature, the game has climbed up the download charts and continues to generate $ 2 million in daily revenues.
Android application monetization trends
- Focus on emerging markets. Google Play’s app downloads growth is primarily driven by emerging markets (including Turkey, Mexico, India and Brazil) where smartphone prices predetermine the choice of a platform. Thanks to developing countries, the combined revenues of Google Play and third-party Android stores will surpass iOS next year. By 2020, the Asia-Pacific app market will be worth $ 57.5 billion. Providing content on a subscription basis is the best way to monetize an Android app there. Also, make sure your soft consumes little storage and supports payments through local carriers;
- Games dominate. In less than 5 years mobile games will drive 75% of all app revenues (and that’s over $ 75 billion). When it comes to Google Play, 90% of its annual profit is generated by games even now. If you want to get a share of the pie, make sure to address a reliable mobile app development company with a stunning game portfolio;
- Chatbots raise the bar for mobile developers. Between 2014 and 2015, the use of messaging apps has grown by 60% on Android. As of now, Facebook Messenger is #1 free app on Google Play; WhatsApp and Kik made it to the top 30, too. The success of WeChat, a Chinese messaging program with 846 million monthly active users that is inhabited by thousands of chatbots handling the tasks we normally trust to mobile apps, forced Telegram, Facebook and Kik to launch their own bot development platforms. Chatbots are smart, effective and cheap – and that’s why many companies consider building a smart assistant instead of a mobile application. According to Dan Grover, product manager at WeChat, it doesn’t mean apps are dying. However, developers will have to go the extra mile to improve UX, give users a strong reason to download mobile software from Google Play and take a creative approach to monetizing Android apps.
There are over 2.2 million titles on Google Play. The Verge claims 98% of Google Play’s revenue comes from free applications. As a result, Android monetization strategies are getting more flexible and often overlap. How to monetize an Android game or productivity app? You should answer this question long before a single line of code is written, validate your strategy during the MVP stage and change the app’s feature set if required. The tech part aside, building mobile software involves a lot of research, tests and planning. Even if you do code yourself, you’d better trust your project to a reliable vendor and focus on marketing instead.