Eka Rabe
Head of Business Development EMEA, PubNative
Everyone who sets out to make an app should aim to create one that offers a seamless experience and keeps its user base happy. But every developer who wants to achieve that in the long term has to consider one thing from the very beginning: monetization.
Even with the best of intentions, failing to consider how an app monetizes from the outset can cripple the long-term prospect of your business. Ignoring monetization until after a project is finished, or when it nears completion, significantly increases the chances of creating an app that either fails to monetize or resorts to desperate tactics to claw back its development costs.
A Competitive Environment
It’s hard to make money in the app economy. Whichever way you look at it, competition in the sector is huge and users are increasingly discerning about what they download.
There are currently over 2.1 million apps active on the App Store alone, and that number has increased every year since its launch in 2008.
At the same time, the number of apps in usage is relatively stagnant. Nielsen has recently reported that most users have opened roughly 26-27 apps a month for the past year, with session length in each of them increasing. And with 75% of users churning 90 days after they download an app, loyalty amongst mobile users only stretches as far as an app is useful to them.
What this means for app developers is simple: there is only a small window of time to convince a user that the app is useful, that it’s worth keeping on a user’s device and that it might even be worth paying for — either directly, via in app purchases or subscription, or indirectly by viewing adverts within the user experience.
Considering Monetization and Design Together
While it is tempting to try to shoehorn monetization mechanics into the app after development, such an approach is detrimental. After all, even the most beautifully designed mobile app will be compromised by clumsily added advertisements or incongruous in-app purchases.
But apps designed with monetization in mind pay off in the long run. Here are the top three reasons to design your app for monetization:
First, app developers who integrate monetization naturally within the flow of an app often monetize most successfully.
For example, Instagram monetizes its user base through native adverts in a way that keeps both advertisers and users happy. By integrating adverts naturally into the user experience and only charging advertisers when a user engages, Instagram rewards advertisers who create high quality copy that targets relevant users.
Profiting from natural interactions and interests, Instagram’s model has already put it on course to become a $3 billion business -—outlining the clear benefits of early and naturally integrated monetization approaches.
Second, designing monetization into the app early gives you a chance to test out what works and what doesn’t.
When you’re in an early testing phase, approaching soft launch or even after you’ve launched on the store, you can use your in-app analytics to quickly evaluate whether you have taken the right approach.
If users are monetizing and retaining well, chances are you’ve got the balance right. If they aren’t, you can look at what can be improved and redesign early, giving your app the best chance to succeed with minimal extra costs associated with it.
And the earlier you design for monetization, the earlier you can test that it works. As Eric Seufert explains on MobileDevMemo, developers tracking minimum viable product metrics such as ARPU and ARPDAU as early as soft launch can give their app a valuable boost — an essential advantage for anyone entering a market as competitive as mobile.
Third, and finally, considering monetization early in design and analysing how well it performs gives you the opportunity to build additional monetization opportunities on top in a natural way.
Many of the successful mobile businesses such as Facebook or Spotify may seem like they got everything right at launch. But most of these companies have either added to or changed their monetization approaches post app launch by building upon what they’ve previously created.
For example, Facebook only built its enormously successful native advertising offering because they wanted to create a mobile product that fitted naturally within the news feed. And Spotify deliberately altered its mobile app to only allow free customers to shuffle playlists, to drive users to try and eventually buy access to its full service.
Thinking about monetization early will help you to make positive decisions; thinking about it late will force you into making bad ones.
Conclusion
Successful mobile monetization will only happen when it is designed into the app from the very beginning. Helping you to create a compelling experience that keeps users happy and that helps you to look after your bottom line, it’s well worth your time (and possibly money) to make monetization a design priority as early as possible.
