Undoubtedly, the mobile app industry is experiencing significant growth, and this expansion is far from reaching its peak. The big reason behind this? Mobile app developers are coming to realize that there is substantial earning potential by employing app monetization strategies. To better understand the future potential of the mobile app industry, let’s take a look back at how it has grown and the role app monetization has played in that growth.
When it comes to app monetization and the growth of the industry, it’s almost a chicken-and-the-egg situation. Did app monetization help to grow the industry, or did industry growth lead to more app monetization? The answer to that isn’t entirely clear, although something that is clear is that people have become more reliant on mobile apps. Whereas traditional websites took over the world many years ago, most people now spend more time on mobile apps than they do on websites.
The average person spends well over two hours per day on apps, time that was previously spent perusing the Internet on a laptop or desktop. Equally important, there are more smartphone users than ever before, meaning more people are going about their daily business with mobile apps rather than traditional websites.
Given the growing trend in the use of mobile apps, existing companies discovered the need to create apps for their business. At the same time, developers discovered the market need for new apps that can perform useful tasks and solve pain points for people who are accustomed to spending large chunks of their day using mobile apps.
Naturally, developers couldn’t create apps if they weren’t going to make money and eventually turn a profit from them, necessitating the need to monetize mobile apps one way or another. But as apps grew more popular and started to overtake websites as the main form of exploring the Internet, monetized apps started to become more lucrative. They weren’t just complementing a company’s other functions and barely breaking even; the apps were reaping significant profits.
Of course, once it became clear that mobile apps could be monetized and become profitable, more developers had ideas for apps that could be easily monetized and turn a profit. In fact, the monetization of an app started to become a fundamental part of development rather than something that was considered later after an app became popular. The more apps created with monetization in mind, the larger the mobile app industry grew. So what came first, monetization or industry growth? Ultimately, they grew together, making app monetization both a byproduct and a driving force in the growth of the mobile app industry.
A key ingredient in-app monetization has been the ability of developers to make money from apps while keeping them free to download and use. Recent estimates indicate that just over 5% of apps downloaded from the Apple App Store are paid apps, while fewer than 5% of the apps from the Google Play Store are paid apps. In other words, roughly 95% of the apps being downloaded and used are free to users. In fact, it’s estimated that only half of mobile app users have ever paid to download an app.
The fact that most apps continue to be free to download has surely contributed to the growth of the industry. At the same time, developers have been clever enough to monetize free apps. This is giving all parties involved the best of both worlds. Developers can make money from apps while users don’t have to pay to use them. This simple fact has no doubt contributed to the growing practice of app development and the innovations made in-app monetization, which then fuels the growth of the mobile app industry even more.
Similarly, the ability to build and subsequently monetize apps has become easier for developers over time. Building and maintaining a mobile app is no longer a luxury for large corporations. Startups without a built-in following or much notoriety can easily build a customized and efficient app. In fact, doing so is sometimes easier than creating a website from scratch.
Therefore, it’s more natural to create an app than a website, especially with help from an SDK monetization tool that can help bring in money as soon as the app is launched. Given how easy it has become to build and subsequently monetize mobile apps, it’s easy to see why the industry continues to grow and why more mobile apps are being created by both established and new businesses.
Advertising has long been one of the best ways for free apps to monetize themselves. In a way, it’s no different than websites trying to monetize themselves. The key is that there have been advancements made with regard to how ads can be used on mobile apps. The use of interstitial ads, native ads, and other new varieties of advertisements have been game-changers for mobile apps. They allow apps to sell ad space without making it obvious that they are showing ads to users or disrupting the user experience. These types of ads have helped to make it more realistic for mobile apps to monetize without a lot of hassle or upsetting users. In turn, this has led to further industry growth.
The other game-changer for mobile app monetization is the demand for customer data. Large corporations, marketers, and countless other agencies have a desire to collect as much information about consumers as possible. They can buy this data from mobile apps of all sizes, allowing any app to monetize itself by selling its user data to the highest bidder.
Much like the developments in mobile app advertising, the willingness of companies to buy data from mobile apps makes the monetization of apps easier. Again, this leads developers to build more apps, and as long as those apps are addressing a pain point or providing something fun or convenient for users, it helps to grow the industry as a whole.
Whether it’s through advertisements, data collection, or other evolving monetization methods, the avenues for making mobile apps successful are expanding. There are various approaches to monetize a mobile app, and regardless of the path you select, prioritize user-centricity, rigorously test your strategy, and maintain agility to swiftly adapt to changing market trends.