How to effectively monetise your apps
Several effective ways to make your apps pay are available, but in-app advertising remains the most effective
The success of smartphones is inextricably linked to the apps that run on them. These have enabled a whole gamut of new capabilities for users, but also a massive new source of revenue for app developers. By the end of 2021, this had reached $133 billion in income from consumers, with 143.6 billion new app installs in that year alone. But there are lots of ways to earn money with your apps, from subscriptions to ads, which can be delivered via platforms such as Huawei Ads.
The most obvious method to make money from apps is having a purchase price or subscription. However, you first need to prove that your app is useful, and unless you already have an extremely recognisable brand or product, you won’t be able to do this without them trying it first. This is why so many apps are offered via the so-called “freemium” model, where a certain portion of features are provided for free, or all features are made available for a limited time, after which the app must be purchased.
Other apps are paid for or offered via subscription. App stores do take a cut for purchases and subscriptions, however. Initially, this is 30% for both Apple and Google, for example. However, with subscriptions, after a year this drops to 15%, so keeping a subscriber for a longer period will be more profitable.
There are also a lot of free apps around, and if users can find the features they want elsewhere for free, they won’t want to pay for them with your app. Fortunately, there are alternative ways to monetise apps that are more subtle and behind the scenes than an overt app purchase or subscription. One of these is collecting data on your users and their behaviour, which you can then monetise with third parties. This is the model of free online services such as Google search and Facebook.
It’s worth collecting data about your users’ behaviour to optimise interface design, but with a popular enough app and sufficiently granular data points, it’s possible to glean considerable insights that provide wider benefits. This can then be sold on or used to inform advertising (of which more later in this article). Obviously, data collection requires transparency with users, so they know what you are collecting and what they get in return. It’s also imperative that recent data laws such as GDPR in Europe and California’s CCPA are followed.
A tried-and-tested monetisation model related to buying outright or subscription is in-app purchases. Like the freemium model, users download an app with plenty of useful functions available for free. But if they want extra premium capabilities, these can be bought in-app. Some apps, particularly games, provide virtual currency that can be bought and used within the software to obtain features and powerups. In-app purchases have the same fees as app purchases, so Apple and Google take a 30% cut.
For apps that provide a transactional service between users, the transactions can involve a fee. For example, if your users are selling their own items second hand, you can take a percentage or charge a flat amount per sale. The beauty of this compared to traditional classified listings is that users don’t pay an up-front fee, only a portion of what they receive if they make a sale. So there will be no downside to them trying out your service, and as your app scales its user base, the profits will grow accordingly.
With all these monetisation methods, it’s imperative that the user experience of your app remains front and centre. However, because users want as much as they can get for what they perceive to be “free”, in-app advertising remains the most popular and easiest way to monetise. This is why the lion’s share of app revenue comes from advertising.
Successful in-app advertising requires a platform that can deliver a wide range of ad formats to a global audience of devices and users, like that offered by Huawei Ads. These platforms serve as an intermediary between mobile publishers and advertisers, streamlining the process of in-app advertising so that you can manage ads without having to deal with each advertiser individually, as well as tracking impressions, conversions, click-through-rates and so on and allowing you to easily access that data.
The Huawei Ads platform reaches over 1 billion connected Huawei devices and over 730 million Huawei device users, covering over 150 advertisers, with more than 33,000 apps globally integrated with the Huawei Ads Kit as of September 2021. This provides huge opportunities for in-app monetisation.
Huawei Ads won the App Growth Awards in 2021 for the first time. It has also been praised for its tailored approach to advertising across devices, with strong performance among close partners. Partner solutions have seen efficiency and effective growth. One of the key partners, a top e-commerce service provider, has seen daily activations increase by up to 537%, improved CTR of up to 278%, while keeping the activation cost efficient, at well below 45%.
The platform is open and available to media agencies, as well as app publishers worldwide, incorporating Huawei’s smart ecosystem, which provides marketing advantages to bridge communication between its partners and device users. Huawei Ads can create niche audiences for partner ads, using the Data Management Platform (DMP) to accurately target the intended demographic.
Huawei has also worked to create a platform with an optimum user and partner experience. Users can access an in-app mini details page before downloading to keep everything within one page. A promotion program is also available for advertisers and certified agencies in Europe, providing free trials, early-bird incentives, and premium on-device media resources.
Huawei Ads’ success at this year’s App Growth Awards demonstrates the platform’s fast development in the world of advertising. It has also been described as ‘one of the fastest-growing platforms in Europe’ by AppsFlyer. In the coming years, Huawei Ads will continue to bring out new features to further improve its partner and user experience. Features such as cost-effective advertising offers are coming soon, designed to adjust bidding automatically in real-time, to boost conversions while reducing costs. This will make Huawei an even better platform for monetising your apps within a huge global user and device market.
If you’d like to find out more about Huawei Ads, please visit https://ads.huawei.com/
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