Posted in Business
In 2009 and 2010, it became evident that mobile applications would play a substantial role in marketing and revenue generation for businesses. The launching of the iOS based iPhone several years earlier had provided the foundation for what would be a multi-billion dollar industry. Since the emergence of the iOS mobile app industry, multitudinous app developers have joined the quest to generate massive revenue through the creation and control of mobile apps. While some apps have done remarkably well, others have faltered and stalled, which should not be surprising when consideration is given to the fact that the mobile app industry is simply a microcosm of the global economy.
While there will be businesses and products that will thrive and prosper, there will be others that will never gain traction, and the same will apply to iOS mobile apps. The key is to conduct the proper market research to develop an understanding of what people are looking for. One thing is for certain, people have become immensely comfortable with using mobile apps to conduct all types of transactions and to complete any of a number of tasks. While the gold rush surrounding mobile apps has cooled down some, the consumer demand for apps has not, and neither has the opportunity for businesses and individuals to generate revenue with mobile apps.
While not every person or business has the expertise and skills to develop their own apps, they can develop the concept or idea, and then they can hire an app development company to actually design the app.
Why is it so important for businesses and organizations to have mobile apps available for their customers and followers? It is simple, apps create convenience and they generate revenue.
The first and most common method for generating revenue through an app is to charge the user to gain access to the app. In other words, a person will have to pay a download fee that can range in price based on the functionality and popularity of the app. In addition to the initial launch of a mobile app, that will usually be followed by a rush to download the app, especially when it has been marketed properly, another way to increase downloads is to offer frequent updates. Research reveals that each time a popular mobile app is updated, downloads for the app increase drastically over the next several weeks.
Ad Supported Functionality
While some businesses and organizations avoid using ad-supported mobile applications, many businesses find that they can generate a substantial amount of revenue through accepted ad placements on the app. In fact, most free applications are supported with ads, and for users that prefer to remove the ads, there is normally a pro or a premium version of the app that does not have ads.
While most monetization models require users to pay the app owner, this approach creates an indirect income stream as the app owner can earn revenue that will be paid by the companies running the ads on the application. There are some ads that will pay per click, meaning that no purchase is necessary, and there are cost per action ads that require the user to take some sort of actions, which could be as simple as providing their email address, or as complete as making an actual purchase. Obviously, ads that require a purchase to pay will convert at a lower rate, but they generally pay significantly more. One app that has done very well using the free app with advertising model is Sleep Easily Meditations by Shazzie, which is a free app that can be downloaded at no charge. The app runs what is considered non-intrusive advertisements, which means that the ads are not annoying or cumbersome for the user. This particular app is averaging over 330 downloads per day, running for more than 20 minutes each time that the user activates it.
This type of monetization model requires that the app be downloaded by a large number of users and it must also be used frequently to be an effective revenue generator.
Freemium for Apps and Game Applications
This particular monetization model is not only the most popular option available for apps and games, but it is also the one that generates the most revenue. According to Distimo's report, in-app purchases make up more than 76 percent of all of the revenue in the Apple Store within the U.S. and more than 90 percent in the Asian markets.
A freemium app is an app that is offered to the user with limited features, virtual goods or content. Subsequently, users have the option to access a premium version of the app, which will allow them to gain a higher level of access to the functionality of the app through an in-app purchase. This model has also proven effective when used to authorize monthly content subscriptions. The in-app purchase removes the initial price point barrier that can stand in the way of the user downloading the app, giving the app owner the opportunity to prove the value of the app. Obviously, this approach is more effective with apps that have a high level of functionality and value — meaning that they have to be well-designed and built, without a lot of bugs and glitches.
With this model it will be possible to offer premium or exclusive content that extends beyond the basic features associated with the application, for a premium fee. The access and functionality can be tiered as well, meaning there can be more than one level of premium access, allowing for price point manipulation.
Paid Apps with Additional Paid Features
In the right situation and with a quality design and high functionality underwriting the pricing model, it is possible to have an app in which the user will have to pay to download the app, and then they will also have to pay for certain premium features on the app as well. This monetization model is considered somewhat of a hybrid model, and it has gained substantial traction recently; however, despite its growing traction, it still has its share of critics. There is a common sentiment that it is not fair to have users pay in order to download the app, and then have them pay a second fee in order to be able to effectively use the app.
While it will require a certain level of cleverness and marketing savvy, this is an app monetization model that has unlimited potential.
Use App for Special Promotions
Self-promoting apps are becoming increasing popular as more businesses and organizations are having apps designed to help them engage their customer base. These types of apps are multifaceted. They are designed to increase customer convenience and access. This means that customers are able to book appointments, ask questions, conduct research and more. With the rapid evolution of the smart phone and other mobile devices, businesses are almost being forced to develop mobile apps in order to remain competitive.
In addition to convenience, these business apps can also promote specials that are either in sync with common promotions available through other mediums, or it can offer special promotions that are only available through using the application. Because the public has become more adept at using applications for everything from shopping to banking, it will be easy for them to respond to promotions that appeal to them. Retail stores have fared quite well using this type of monetization model.
Web Service Works Integration
It is no secret that the younger generation is more likely to use application processes than to use complete web services; however, individuals over the age of 50 are closing the gap, being more likely to use applications than any time in the past. With the younger group, especially teens and young adults, the idea of subscribing to a web service is almost an alien concept. This generation is more likely to purchase parts of the service that appeals to them as an app. This trend can be expected to continue, especially in certain industries like gaming and music.
Understanding the Market Dynamic
When choosing a monetization model is important to understand the dynamic of the market. Is it a small niche market that will only use the app on selected occasions? If so, the free ad-supported apps will not be of much use in generating revenue, because they require volume to be effective. The same can be said for low cost downloads. Again, volume is necessary to make any significant money here. With smaller niches and infrequent use, it is better to use a monetization model that offers free limited access and use, with a significant upgrade cost.
Proper Design and Development
While it is immensely important to choose the right monetization method, it is equally important to ensure that the design, development and functionality of the app is of the highest performance caliber. While there are some online programs that allow individuals to create their own mobile apps, it is definitely not recommended for professional organizations. When an app is created and released to the public, it becomes a part of the business' brand. This means that the quality and functionality of the app will have a direct impact on the perception of the company's brand.
The best option that business and professional organizations have is to outsource the designed and development of the app to a reputable app developer that will be able to understand the concept, and translate it into a functional iOS mobile application.
With the earning potential of the average iOS mobile app, the initial investment associated with paying the developer will prove a worthwhile investment.
While there are numerous ways to monetize an app, there is one thing that remains common —quality. Quality and performance is immensely important to the success of the app. Today's consumer is extremely knowledgeable, and they have high expectations as far as their online, web and digital experiences are concerned, meaning that they will not have a high level of tolerance for dysfunctional mobile apps. Getting it right the first time is essential to protecting the brand and ensuring that the app will produce a consistent revenue stream.
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