Which trends will shape app monetization in 2018? As the world becomes better adapted for mobile, developers will benefit from greater revenue than ever before. However to do this they must balance the needs of the user with app monetization practices.
We’ll look at five trends that will influence the way that app moentization will work in 2018.
App experience will become more important for developers relying on ads to generate revenue.
In-app ads remain a popular method of app monetization for developers. Despite them having obvious drawbacks when applied poorly.
In 2018 app advertising will be all about the user experience. developers must strike a balance between the number of ads, where they appear and how the user interacts with them. This will be pivotal to app monetization success. App owners will also have to consider how these changes will affect their users in 2018. Too many ads will negatively affect the user experience. But that doesn’t mean that it’s impossible to provide value whilst delivering in-app ads.
Mobile app advertising is maturing quickly. Make sure you look for a network that uses safe brands, smart ad targeting, and provides support for interactive ads.
When integrating an app advertising strategy you may find a trade-off between ease of integration and spamminess of ads. In 2018 it might be worth taking the time to focus on putting user experience first.
Don’t expect revenue from app ads to jump to new heights anytime soon. If anything expect app ad revenue to decrease as more apps adopt in-app advertising. Perhaps 2018 could be the year to supplement your app revenue with another method.
More apps will adopt a freemium model as more users are becoming used to an app being free at the point of use.
Freemium is allowing app owners to increase session length and generate engaged users. This is a great place from which to convert users into healthy revenue. After a positive app experience app users are more likely to opt-in for premium features. Having the chance to nurture and educate your users before this has a positive effect on your app monetization strategy.
Try not to appear like you are cheating your users. Make it clear that your app is a freemium app from the very beginning. They won’t want to invest a lot of time in a game or app to realise that they have to pay to use some features.
It seems that freemium is here to stay. With users finding it standard practice to not pay for an app at the point of purchase. Because of this, developers are finding it harder to justify an upfront fee. The freemium app monetization model is a great opportunity to engage and nurture audiences for app monetization.
Users will become dissatisfied if they have to commit huge amounts of time or money to unlock all app features.
In-app purchases as a method of app monetization is still experiencing healthy growth. This may be slightly overstated due to the inclusion of ‘services’ as purchases (think Uber etc).
One of the main trends well see in 2018 is that app developers will need to focus more on engagement rather than only increasing app monetization.
Once a user has purchased in-app content then they are more likely come back and spend more time in the app. This translates to better engagement and retention and in turn better monetization.
No category has benefited from in-app purchases more than the gaming category. Here, developers are benefiting by placing engagement first. The user now has the option to pay to advance through the game quicker or access powerups and features.
Developers need to make sure they are getting this balance right. In-app purchases are effective because a few users spend a lot. There will always be users who only want to play your game for free. True these users don’t generate revenue, but they are still important for your app to exist.
Whilst not being a mobile app, developers can still learn a lot from the EA debacle in the new Battlefront game. Users quickly noticed that to unlock some of the features they would have to play the game for 1000 hours. Alternatively, they could pay to unlock them. This seemed rather unfair, especially when they had purchased the game upfront.
To keep users happy, developers will need to strike the right balance between monetization and experience.
In 2018 more and more users will become aware of how apps monetize their users. That’s why app monetization methods must be clear and fair, in the long term it will benefit you.
A conversation will need to be had with users about monetization of data and opt-out methods.
Users are more aware than ever of the need for developers to monetize their app audience. The conversation around app monetization is shifting to help users understand why apps are free.
In 2018 consumer personalization will be a high priority for brands. They will achieve this by using consumer data to help provide an improved user experience.
Mobile app owners are sitting on a lot of behavioural data around their users. This is of value to those who wish to improve personlization for their customers.
Data monetization is secure, private and becoming more popular amongst developers. Users are more likely to understand that this data will help to generate improved personlization. By communicating the benefits and education users about opt-in developers can monetize their app in this way.
A benefit of app data monetization is that the user experience remains intact. There are no intrusive adverts or the need for the user to pay anything upfront. This means that the user will spend more time in the app and engage with the app’s features. The app monetization strategy can be adopted alongside other methods of monetization.
Data monetization allows developers to monetize a much higher percentage of users. The users don’t need to be engaged for it to work. The revenue that you generate from each user will also be higher. This means you don’t have to worry about monetization in relation to platform. It’s the same regardless of the device.
Expect revenue from data monetization to increase from a high starting point with better technology. 2018 will see the consumer become more aware of the power of big data and better educated on how it affects them.
App subscription models will more closely resemble SAAS subscriptions.
The subscription model is one that looks to remain popular in 2018. Again, users are used to trialling an app and its features before parting with any cash
Subscription models are becoming more complex than a simple buy or don’t buy. In fact, many pricing structures now more closely resemble a SAAS model. It’s common to see several pricing tiers with many different features.
This allows app developers to persuade users who would previously not part with any cash to subscribe to a lower tier of membership. This method of app monetization is still the best fit for service apps.
A side effect of this is that developers will need to clearly help users understand the benefits of upgrading. More tiers and features mean a better explanation is needed.
Closing thoughts for 2018
Developers will continue to benefit from the app economy with revenue from app monetization set to grow throughout 2018. Free apps will become the new normal, compared to previously where single pay purchases were the most popular. This will allow developers to generate more revenue over a longer period of time.
Developers will need to place more emphasis on the monetization experience. This means that the developers are more likely to miss out on revenue from app monetization if the app experience is not up to scratch. Due to the free to download culture, more emphasis on experience and education is needed. This will help to persuade users to enter into premium models and subscriptions or to engage with in-app purchases.
More and more developers will need to adopt hybrid monetization strategies. Developers should not rely on a single method of app monetization. Instead, spreading monetization across multiple strategies will provide stability. Especially in a market that can change quickly. The preference of app users is volatile. The changing platform rules around app monetization may also affect developers in 2018. It’s important to stay one step ahead!
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James is the head of marketing at Tamoco