App Monetization Guide: The Best Strategies in 2023

You put so much effort into developing your digital product, so it’s only natural that you want it to bring you a good return on investment. Product monetization is the method you choose for your app to make money. You need to decide how your product will make money right from the start.

monetization methods for software

Obviously, how you choose to monetize your software—freemium, free trial, etc.—isn’t the only factor that leads to sales. That’s why I chose to include diverse stories so you can gain insights into marketing, sales, and the underlying thinking behind various monetization strategies. Free software can be open source, meaning it’s accessible to everyone.

Either all these people with freemium apps know something about app monetization, or you’re in luck because the competition definitely seems low. For example, you can have a paid application with in-app purchases or even a subscription. You can even take it up a notch and implement mobile ads on top, but that’s going to be really tough to figure out. Apple customers are used to the fact that if they pay for a product upfront, it should stay void of any ads. However, suppose we already run a business and want a mobile solution to promote or distribute our goods and services. In that case, we probably don’t need to worry about coming up with app monetization ideas because an app will essentially function as yet another channel for distributing our services and products.

Is there a platform for A/B testing different app monetization options?

Now that you are inspired by real facts and reasons to monetize a mobile solution, let’s proceed with app monetization tips. A study says that in 2019, users are likely to spend around 3 hours per day using mobile apps! This means that you can catch the attention of billions of mobile users with your app, too. According to forecasts, in 2020 mobile app revenue will be double that of 2016. Applications will generate nearly $190 million to theirs creators via app stores sales and in-app advertising! This statistics is quite optimistic and promises great opportunities for your own business breakthrough.

When you mix and match different ways to monetize an app, remember to run A/B tests. According to Statista, playable and rewarded video ads are the most engaging mobile ad types. IPhone applications generate almost 2x as much as Android applications. Of course, that can tip the scales in favor of staying with Apple and focusing on monetizing exclusively in this store.

monetization methods for software

While you won’t have to dedicate developer resources for white-glove enrollment, you will need a good customer-facing team who can facilitate the process for your merchants. Stax Connect streamlines the enrollment process for SaaS companies. Our team can validate each merchant using AML, KYC, Credit Check, and OFAC to ensure that they’re fully vetted.

How does app monetization work in all these other Android app marketplaces such as Amazon or Samsung?

A Zuora report shows that while 53.3% of subscription-based businesses remained unchanged by the Corona Virus pandemic, 23% of these businesses reported an accelerated growth. According to Gartner, worldwide software spending is projected to be $556 billion. That’s a lot of moolah, and with the right monetization strategy, your software could have a chunk of it. There’s no feeling like clients and businesses alike lining up to pay big bucks for your software.

There are a lot of decisions that go into launching a premium site, from what content to include to how to price appropriately to how to improve your conversion rate. The exact mix, of course, will depend on the niche and specific site. For many websites, display advertising is the largest single source of revenue. There are countless examples of display advertising out there; below is a view of implementing a “skinned” Blackberry ad on its homepage.

monetization methods for software

It’s important that the size, type, and placement of the banner ads are all carefully planned. You need to make sure that your product still delivers a great user experience and the ads don’t end up annoying more than a few users. While large companies have the resources to accomplish this, small to medium SaaS businesses may not have the developer resources to do so.

Add Monetization Options to Existing Content

Frequently using AVOD for general information and subscription or transactional video on demand for premium content. Since 2010, we’ve been supporting businesses worldwide in gaining competitive advantage by means of modern technology. We advise on digitalization, develop and implement high-quality solutions, and augment our clients’ teams with skilled software developers. The monetization method you pick needs to fit really well with the entire user experience and flow in your application. Deciding on that early on will help you to smoothly align monetization into the product’s functionality and user flow – and make sure it all matches your business model and value proposition. Once again, the “right” payment enrollment process will depend on your needs, capabilities, and users.

monetization methods for software

Fortunately, there’s more than one way to monetize a software product. For this article, I interviewed a handful of successful entrepreneurs and one investor to learn how they helped turn ideas into profitable SaaS businesses. Monetization is the act of setting a price for products and gaining revenue from that price. In-depth data analysis to assess your competitor’s strengths and weaknesses.

You can also make money by subscribing to an affiliate program for those products. Multiply this number with how much you charge for a copy and you can get the average income from selling e-books. Instead of acting through third parties, you directly sell advertising space to media buyers.

Product model

HubSpot has ideally adopted this software monetization strategy as all of its products are offered on a subscription basis. Daily product updates and improvements ensure all clients enjoy different product varieties but at the same prices. A software how do free apps make money license is a legal tool governing the distribution and use of your software. License models can protect your intellectual property in source and object-code forms. This is one of the most frequently asked questions in the software development world.

  • Open source developers spend countless hours of their spare time, coding, debugging and documenting, only to get paid exactly $0 for their talent and hard work.
  • The different subscription tiers reflect their experience of what they know developers need to get started, allowing them to scale up as they grow, aka the “pay-as-you-grow” model.
  • If one strategy worked in a particular market, it doesn’t mean the strategy will work in another.
  • Antitrust law doesn’t condemn a firm for developing a universally popular search engine, such as Google, even if that success leads to market dominance.
  • It offers another revenue stream to your business, as well as proving value within the organization through the value of insights.
  • Whether you need a full product, consulting, tech investment or an extended team, our experts will help you find the best solutions.

Companies that are new to the content or data space typically have traditional infrastructure that lacks scalability. For any business, flexibility and scalability are critical to support self-service subscriptions and increased business velocity. Understanding customer needs and preferences improves customer experience.

Subscription business model

As noted in the Software Piracy Stat Watch, BSA research suggests piracy is a $46 billion problem globally. Even in the US, with strong compliance laws, there’s still an estimated $9 billion opportunity to recover revenue by identifying, tracking, and converting unlicensed use. We are an early stage VC firm empowering digital platforms across Europe.

Bringing Experience Economy into 2021: Why We Invested in Convious

You can test how viewers will react to ads – without completely alienating your audience in the process. Video paywalls are used for the monetization of online media, but they are not exclusive to video content. The video content industry is growing exponentially right now, meaning viewers are willing to pay a fee to access videos of all genres. Google Play Store for individual downloads and pay-per-view events for live streaming. TVOD is the opposite of AVOD, as viewers pay for every content they access.

Things to Consider While Implementing Data Monetization

That way, you can build deeper engagement with your audience and inspire customers to buy extra functionalities once they already know the value they get from your digital product. By coming up with an app monetization strategy early on in product development, you will make sure that your product generates revenue as soon as you launch it and build traction. Weighing in these factors will help you decide on the best route forward. For instance, if you want to provide a branded experience but don’t have a lot of dev resources, you may want to consider using a hybrid approach. Do your customers need more hand-holding when it comes to payments? Enabling users to make or accept payments through your platform requires a process called payment enrollment.

Make money by displaying audio ads

Our industry-leading expertise with app development across healthcare, fintech, and ecommerce is why so many innovative companies choose us as their technology partner. If you share your knowledge of the target audience with us, we’ll recommend an appropriate partner. Of course, the most prominent ad networks include AdMob , MoPub , and Facebook’s App Ads. All major mobile ad providers have tools to A/B test their SDKs and APIs to see what works best for your audience.

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