App Monetization Guide 2021 – Best Strategies and Tips

App Monetization Guide 2021 – Best Strategies and Tips

Congrats, you developed a new app for your business. This will help your company to reach customers and offer a better experience. Besides having your customers interacting with your company anytime and anywhere, you can increase the ROI of your application by monetizing. In this How to Monetize Mobile Apps – The Essential Guide, we, at CodeFuel, will walk you through all you need to know to monetize your apps successfully.

What Is App Monetization? 

It is the process of generating revenue from your app. When publishers offer free apps, they generate revenue in other ways. 

Developers need to generate revenue from their apps, but it can be challenging to stay afloat without a solid amount of funding. With most apps free to install, developers need to adjust their revenue model to generate cash after the user downloads the app. While coming up with your business model, you need to ensure that your app generates revenue and provides a great user experience

The Mobile Apps Market

From banking to gaming and dating, we use mobile apps for our everyday needs on our smartphones. In recent years, the mobile apps market has increased exponentially. Here are some statistics: 

Number of mobile app downloads worldwide in 2020    218B

Global consumer spending on mobile apps in 2019     $120B

User retention rate of mobile apps worldwide 2019     32%

Apps that are used only once in 2019    25%

Most popular mobile app monetization strategy in 2019    Subscription model

Avg consumer spending on mobile apps in the 3rd quarter 2020   $4.64/user

Number of apps available in the Google Play Store3.04M

Number of apps available in the Apple App Store 1.96

What can we learn from this?

 While in recent years advertising was the most popular monetization strategy, by the end of 2019 and 2020, subscription was the most popular app monetization model. Subscription and pay monthly models work for giants like Netflix and Spotify. In the next section, we will look into these points as we explore the different app monetization strategies. 

How Mobile App Advertising Works

One of the most popular ways to monetize a mobile application is by adding ads to it. Mobile app advertising allows you to make money from an app without actually charging for the app. When a user downloads your app, it will present your user with ads. Every time the ads get viewed or clicked via your app, you get paid a fee. 

That works because people prefer not to pay for the apps they download. No matter how cheap the app is, if there is a free alternative that works, chances are the user will prefer it. That’s why, according to Statista, 96.7% of apps in the Google Play Store in January 2021 were free.

How do you get paid? There are two metrics you should know:  

  • CPC: Cost per click. It means the amount the advertiser pays for each click on their ads. 
  • CPM: Cost per mille (thousand impressions). With this system, the advertisers set the price they will pay per 1000 ad impressions. As a developer or publisher, you’ll get paid every time a CPM ad is served to your app, and a user views it.

In the Google Play Store, CPM ads and CPC ads compete against each other. Google displays the ads that earn more revenue for you.  

11 Top Strategies to Monetize Mobile Apps

When you plan to launch an app, monetization needs to be more than an afterthought. You should plan how your app will make money from the beginning of the project. There are many app monetization strategies applicable according to the type of app and audience. Some companies focus on one approach, while others use a combination of methods. Let’s explore: 

  • Freemium – In-App Purchases

This strategy allows the user to download the app for free, but some premium features are behind a paywall. The users can try the app in the basic format, but if they want multiplayer, for example, they need to purchase the premium version. This approach can increase the audience reach and the number of downloads. Gamers can buy accessories for their characters, resources, or premium packages.

  • In-App Advertising

In-app adverts are ads that appear when a person uses the app. It seems simple, but each application implements in-app advertising in a different way. Like with every monetization strategy, it has pros and cons. On the one hand, it is easy to implement. But on the other side, too many ads can annoy the users. 

How does in-app advertising work? Unlike mobile web ads, in-app advertisements appear within a mobile app. They can be banners, video ads, or display ads. Because of the large amount of time people spend on their phones, using their preferred apps, in-app advertising has a higher response among users. 

What are the most common Ad Formats? 

Banner Ads: they are usually so small on a mobile screen that they don’t provide a lot of value for the advertiser.

    • Interstitial Ads: they are often served at the end of a section or flow on a game. Also, when the app is loading. 
    • Native Ads: these types of ads integrate seamlessly into the app. Therefore, they have a higher engagement rate. 
    • Affiliate Ads: these generate commission from other applications by advertising them through your app. 
  • Upgrade to Remove Ads

In this model, ads are served unless the user pays the subscription to remove them. Spotify and YouTube music use this model.

  • Smart Installers

Ensuring your users install the app seamlessly is part of providing a great user experience. You can also earn some revenue by using a smart installer and display third-party ads. Keep the offers related to what our app offers to give more value to users.   

  • Bundle Deals

Combining several utilities or extensions can be a way to give more value to your audience and increase your application’s exposure. Bundles generally attract users to perceive that they are getting a good deal, and they are more likely to buy the app.  

  • Search Monetization

A search monetization strategy, such as CodeFuel, earns money by adding search capabilities to your app. Every time a user performs a search from a third-party search box, your app pulls the results from other services, and your app gets paid. 

  • Pay-to-Download Apps (or Paid Apps)

In this model, developers and software publishers simply charge users for downloading the product. Publishers usually combine this model with a freemium trial period or ads. This is one of the least popular strategies because users now don’t want to pay for an app when there are many free others. 

  • Affiliate marketing

Can you apply affiliate marketing for a model application? Sure, this strategy allows the app to deliver value to the end-user with coupons, season deals of other brands. This commission-based sales method involves reselling services through affiliate programs in the app. 

  • Merchandise

You can use your apps as a sales channel for your own goods or services. For example, a restaurant can use an app to sell delivery orders. An online store can use a mobile app to extend its reach, offer deals and special sales.

  • Transaction fees

Your app can be a platform to sell other people’s goods and services. Uber and Airbnb use this model where they get a commission fee for their services. 

  • Freemium/ Subscription service

Subscriptions are very popular as a way to generate app revenue. This model still lets the user download the app for free. They get access to all the features of the app for a trial period. Once this trial is over, they need to subscribe to keep using the app. This model is used by Netflix, Amazon Prime, almost all VPNs, and many other categories.

Best Practices to Improve App Monetization

When monetizing our app, there are some tips that can improve the strategies you implement: 

  • Measure user engagement – user engagement rate is one of the best metrics you can use to track your app’s chances of getting monetized. If user engagement is high, it means users are satisfied. Also, the more time the user spends in the app, the more likely they will purchase. 
  • Create loyalty with perks and discounts – reward loyal customers with discounts and perks. Some users may not feel comfortable with in-app purchases, but when offered a discount, may convert them. 
  • Build a community –  some apps like mobile games thrive with communities. Players are more engaged and tend to make more in-app purchases when belonging to a community. But this practice doesn’t work only with gaming apps, cooking apps, 

How to Monetize Your Mobile App by Increasing Engagement

1. Search Ads

Search ads can catch your audience’s attention about your app and remind existing users to use your application. These ads appear whenever a user searches similar keywords or categories. Moreover, you can create ads in the Google Ad Network that only appear to users who already have your app. 

2. Social Media Ads

Promote your app on social media through ads that link directly from sponsored Facebook posts into your app. You can do this on Facebook and Twitter. 

3. Push Notifications

Catch the attention of your audience when they are not using your app. For example, have your app send notifications based on location triggers. Or send your users regular reminders with valuable and relevant content from the app. 

4. Recommendation engines

Use your app with a recommendation engine to suggest related products and services that the user may want. The recommendation engine algorithm can determine exactly which offers to promote, and you profit from the clicks and referrals. 

5. Promote cross-platform 

You can list your application not only in Google Play and Apple Store; there are other directories and app stores outside the US that can also offer revenue. Who knows? Your app might be a success in Europe. 

How to measure app success

Companies generally measure an app’s success by tracking general performance indicators like the number of mobile downloads, the number of subscriptions, the retention rate, active users, and so on. Yet, the number of downloads is not the only metric to monitor your app’s success. After all, you need to know if your app is generating revenue. 

App Monetization Metrics You Should Know

Average revenue per user (ARPU) Average amount of money generated per person multiplied by the total customer base
Customer acquisition cost (CAC) The cost of acquiring a customer. Includes labor, advertising, and other costs. 
Customer Lifetime Value (CLC) Measures the net profit generated by every customer. 
Cost per Mille In this agreement, the publisher charges advertisers a flat rate for every 1000 views of an ad. 
Cost per Click You get paid when a user clicks or taps on an ad. 
Cost per Action Only pays the developers if the user makes a purchase. 
Cost per View This is related to video ads. It pays you every time a user watches most of a video in your app. 
Cost per Install You get paid every time a user installs an app. 

Stats and Figures About App Monetization

Here are the top 5 stats and figures you must know about app monetization in 2021. 

  • Distribution of free and paid Android apps in the Google Play Store as of January 2021
Statistic: Distribution of free and paid Android apps in the Google Play Store as of March 2021 | Statista
Find more statistics at Statista

Mobile app popular business models

  • The biggest app stores in the world:

Google Play  Apple App Store
2.87 million apps 1.96 million apps
  • Global consumer spending

Google Play  Apple App Store
$1.3 billion $19 billion

Average app price

Google Play  Apple App Store
Between $1 and $2  $1.02

What can we learn from them?

Free downloading is still the preferred way for users to try an app. Most apps in the app stores are free, which means that developers need to find other monetization options. From them, subscription models are the most successful. Even when you charge for your app, keep it low priced, as most applications are under $5 in the app stores. 

What Does the Future Hold for Monetizing and Promoting Apps?

There is no doubt that the global mobile market is growing. According to Allied Market Research, it is expected to grow over $400 billion by 2026. From the report, we can identify the three biggest trends for app monetization for 2021 and beyond:

  1. Targeted advertising: personalization is one of the biggest trends of the last years. Relevant ads provide the highest engagement. Therefore, most mobile apps use AI algorithms and services that help them show relevant advertising
  2. Subscription is becoming the new normal. Netflix, Prime Video, and gaming apps are leading the trend with the subscription model and upgrades. 
  3. Virtual merchandise: In-app purchases of upgrades and packages in mobile games. 

How CodeFuel Helps Companies to Monetize their Mobile Apps

CodeFuel is a complete solution that lets you leverage search, ads, shopping, and news to monetize your mobile app. By adding user intent search, you can enhance mobile applications and increase revenue. 

Ready to increase your app revenue? Learn more about how CodeFuel can help

FAQs About App Monetization

How do you monetize your mobile app?

Use the strategies mentioned in this article, like in-app purchases, freemium/premium versions, in-app advertising, and more. 

How do I monetize my app with ads?

You can use affiliate ads that allow your app to generate commission from other apps by advertising them in your app. You can also display relevant native ads by using search or shopping ads engines like CodeFuel. 

How do I monetize apps without ads? 

You can offer premium paid features or a paid version of your app. Subscriptions and app referral programs also allow you to make money without apps,

New Facebook Tool Targets Users of Mobile Apps

Getting people to download your mobile apps is half the battle. Then you have to convince them to actually use the apps.

While downloads may make your app look popular, marketers know that it’s how many people who actually use the app that have the impact on your bottom line. Because sadly, the majority of people who download the app won’t actually continue to use it. Research shows that only about 6 percent of the people who download an app are still using it 30 days later.

If people aren’t using your app, they definitely are buying in-app items, they aren’t clicking on your ads, and they aren’t signing up for your lists or taking other actions to become leads.

Facebook recognizes the problem and is now offering a solution to help change that.

The social giant notes that the majority of time that people spend on mobile devices is actually spent in apps — about 90 percent. A smaller majority of purchases that are made on mobile also take place in apps — about 58 percent.

Therefore, it is important to find ways to get people to spend more time in your app and to spend money in it.

Facebook has introduced a new advertising tool, called App Event Optimization, that aims to give advertisers direct access to mobile app users in order to increase these purchases.

How the Tool Works

App Event Optimization gives developers more access to app users by allowing them to target people specifically during the app registration or other key events in the app.

Options for targeting include:

  • Completion of app registration
  • Initiation of checkout
  • Completion of purchase
  • Adding something to the cart
  • Viewing content
  • Achieving a level

More events are included in the tool, and as the tool grows in use, it is possible that even more events or options will be added.

Developers can choose to show their ads or special offers during any of these events, and they set their budget just the way they do for Facebook’s regular ads.

The precise targeting helps advertisers to get better results. They can tailor their ads around the events that partner best with what they have to sell. For example, an ad can display a product that complements something the person is already buying.

You can combine options to ensure you get the best targeting and the best results.

Effectiveness of the Tool

Facebook has reported that its new in-app advertising tool is getting great results for advertisers.

Specifically, Facebook said that advertiser Poshmark was able to reduce the cost per lead by 24 percent using the app. Another advertiser, Smule, said that it reduced its cost per lead by 32 percent and increased the revenue per use by 22 percent using the ad tool.

In order to use the tool and start getting these kind of results for yourself, you will need to install the Facebook SDK. You can also use the tool in Facebook’s Power Editor and in its API.

These tools help to measure the effectiveness of the ad tool in order to make improvements where needed.

Advertising Your Apps

Of course, before you can sell ads in your app, you need to also sell your app. No one is going to see your ads if they are not actually in your app to start.

While launching its in-app advertising tool, Facebook also launched two new tools to advertising mobile apps.

Facebook offers dynamic ads that show people ads during the app-installation process. The ads are specifically for items or websites that they have already visited or shown interest in, thereby increasing the effectiveness of the ads. It is a more advanced type of retargeting that you can use to promote installations of your app.

Facebook also offers canvas ads that provide a more immersive experience. These ads can show much more of what actually happens in your app in order to entice people to download it. You can use these more immersive ads to either encourage new downloads or to re-engage customers who maybe downloaded your app and then became one of the majority who was no longer using it after 30 days.

Between these two tools, you can get more downloads of your app, which will make it more profitable for in-app advertising and purchases. You can then use the App Event Optimization to target buyers in the app and get more sales and leads.

Of course, you can also use the App Event Optimization to generate advertising revenue for your app. You don’t have to try to increase your own sales; you can simply use your app as a conduit for other advertisers and collect that revenue.

Using the right tools can help you get much more out of your app, whether it is a free one meant to generate advertising revenue or it is a paid app that helps promote your brand.

Tips for Getting Started and Being Successful with Facebook Live

Facebook Live has introduced an innovative new option to reach your audience.

You no longer have to confine yourself to updating short video updates after an event has passed or to “live blog” with snippets of text as you report from an event. Now, you can broadcast a stream in real time to your audience just as if you were reporting a news program.

Since this is a relatively new feature, you may still be a little confused about how to start using it or how to get the most out of it to influence your audience.

Tech blogger Hillel Fuld sat down with CodeFuel Vice President of Marketing Angie Geffen to talk about this new technology and its potential. You can check out that session here, or you can read on to get some top tips for getting start and being successful with Facebook Live:

Create a Unique Offering

Everyone and their grandmother can post a video of themselves reacting to watching a show or singing along to a popular song — and does.

You need to create something unique that is worthwhile for your audience to watch.

Take advantage of the access that only you have to create unique videos. For example, if you attend an industry event, broadcast live from that event. If you can snag an exclusive interview with an expert in your field, broadcast it live instead of waiting to post it after the fact.

The fewer people that are offering something, the more interesting and special it seems to be. Make sure you are among those that are offering something rare.

Invest in Good Equipment

You can take video with any smart phone with a camera, but that doesn’t mean you should.

Low-quality video will reflect poorly on your brand. Your audience may think that the products and services you offer have the same poor quality and they won’t buy.

Invest in a good quality camera and other equipment to improve the look and sound of your videos. You may want to purchase items such as a high-quality microphone, green screen, professional backdrops, and good lighting.

You don’t need the best setup that money can buy, but you should purchase the highest quality you can to create a professional-looking video.

Create a Content Strategy

Just like you create a content strategy for your blog, you need to create a content strategy for your Facebook Live videos.

Developing a calendar is the best way to create your strategy, as it will include a clear list of dates and video topics that you can plan around to create a steady stream of videos.

However, if you aren’t able to develop a plan in that much detail, you can at least develop a plan for the frequency of your videos, the type of videos you will produce, or even the roles that your team members will take in creating these videos. Therefore, you may not know what you will record until the week of the video, but if you at least know that you are going to put out a video every week, you can be thinking ahead and planning accordingly.

Don’t be Afraid to Experiment

Recording live video can be very challenging. Don’t feel like you have to have every aspect of your video planned or that you can’t deviate from your plan.

You will make mistakes on camera. The unexpected will happen. Instead of trying to prevent that, it is better to remain flexible and focus on how you can learn and grow from those mishaps.

If your mic drops out during a recording, you can make changes to your tech setup to ensure that mistakes like that don’t happen again. If someone you are interviewing goes rogue during your talk, you can create a better vetting process for on-camera guests.

The way you handle mistakes and mishaps on the air will also show your audience what kind of service and professionalism you have to offer them. If you’re able to roll with the punches and act with grace under fire, you will inspire your audience’s trust and confidence.

Loosen Up and Have Fun

The best videos are those that are fun, and if you are having fun, your audience will appreciate your video more.

Plus, if you are having fun, you’ll be more open to learning and adapting as you adjust to using this new, experimental platform. Make funny jokes and asides as you are recording. Respond to mishaps in funny ways. Show off your personality!

Your audience will feel more engaged with the video if you are having fun, and they will be more likely to comment on your stream and to watch your future live videos.

Facebook Live offers a great way to engage your audience and to create more exposure for your brand. Use these tips to get started with the platform and start connecting with more of your followers.

Why Native Ads

Why native ads? Native ads can be defined as ad units that fit into the look and feel of the publisher website. The word ‘native’ refers to the ad fitting natively into the site.
Examples of native ads: advertisement posts in your Facebook feed; the first few ‘sponsored’ results on a Search Engine Results Page (SERP); the ‘recommended for you’ section at the bottom of the article you are reading. Native ads are integrated seamlessly within the platform. Over the course of this blog post, I will delve into this question and make a clear case for native ad implementation.

The State Of Online ADS

Publishers and advertisers have seen a decline in user engagement with display banner ads. Users are failing to ‘see’ and react to these ad units and click-through rates are falling. The entire media industry is feeling the sting as advertisers are seeing a decline in their campaign metrics and are paying less for these ads; publisher revenues are taking a hit.

As the results of these ads become less and less impressive, publishers and advertisers naturally try other ad units to generate revenue- they use more aggressive ad units such as pop-ups and plasma banners, which come with the unpleasant side effect of interfering with the user experience.

Too many of these types of ads are contributing to the expansion of ad blocking. Why? Because quite simply, users do not want to see them. The media is going crazy with ad blocking stories at the moment as these display ads are damaging the user experience.

Finding The Right Solution

There is a clear need for a different ad solution to enable brands to engage with their users and not send them away with an unpleasant experience. Publishers yearn for user engagement and the ability to monetize from it.
Matching the look and feel of the host site is all well and good, but in reality, it’s only half the battle.

Ads need to be relevant or else they will not be effective. Ads need to be in line with searches conducted by the user, keywords, content of the actual articles/page, the location of the user, their browsing history and more. Many solutions fall short of the mark- they hit one target but not the other. CodeFuel has stepped in to deliver both.

CodeFuel & Native ADS

CodeFuel’s mission is simple- to deliver a native ad solution that compliments the user’s experience and journey. To serve highly targeted ads in a way that do not interfere with the UX, which will in turn will generate revenue for the content publisher. Our engagement solutions are implemented within the publisher page with a simple line of code, and are able to capture the intent of the user and the context of the article they are reading.

Ads delivered within the CodeFuel line of products are natively designed and offer a smooth integration with better results for advertisers and publishers on both mobile web and desktop. The solutions have proven to keep users on site for longer and to increase publisher revenues in the process. Check out to learn more on native ads and what they can do for the content publisher.

The Power of Mobile

It is essential to see mobile as a concept rather than a device. Users love being connected from anywhere, anytime whether it’s through their tablet, mobile phone, or smartwatch. These devices give them access to content providers, and control over their assets and of course a fun getaway when needed. You simply cannot ignore the power of mobile in this day and age.

Learning From The Past

In the 90s when the internet hit, financial markets got excited, yet there were indeed skeptical business leaders who were cynical about the impact of this medium and hence did not react nor invest. Flash forward a few years and companies dominating the business world are online – Amazon, eBay, Netflix, Expedia- offline activity has made its way online and the trend isn’t going anywhere.

Right now we are experiencing another shift- this time it’s from desktop to mobile. This transition is happening at an impressive speed- and is beginning to make noise in every single industry. Now is the time to gear yourself up for mobile before it’s too late.

A Global Thing

Unlike the shift to online that started in the USA and then gradually hit out, this mobile trend is growing massively in many countries worldwide. Instagram for example is booming across China, Turkey, UK and throughout the entire world. People are switching on to the reach mobile tech can offer.

More Engagement

Engagement levels are strong on this platform. End users can interact on the go, wherever they are and are not restricted to being behind a desktop screen. GPS can also be factored in to deliver a stronger UX which in turn will boost engagement levels. All these factors turn content that was once read scrolling down a PC monitor into digestible chunks of information that can be consumed on the go.

Emotional Ties

Research has proven time and again that people have emotional connections with their smartphones- a lot more so than any other electrical device. Leading companies and content publishers everywhere should be realizing this and making their sites as mobile friendly as possible.

Mobile is currently thriving. At CodeFuel we recognize this and tailor our products accordingly. We understand that users are switching over to mobile and this trend will only grow stronger. We make sure our products are optimized for mobile and our analytics platform has incredible mobile functionality. We’re in the middle of a mobile revolution- make sure that you’re part of it.