How Does App Monetization Work?
A successful app is one that knows how to monetize its users. Having a strategy for app monetization is the difference between profitability and the app’s demise. Since the majority of apps are free—how do they make money?
The conventional way to create app revenue is through in-app purchases, subscriptions, and money directly from a user or player. However, lots of categories, including very in-demand ones like hyper casual games, don’t make money this way. Instead, they monetize their players.
In this post, we’ll explain app monetization and provide examples so you can build or revamp your monetization plans.
What Is App Monetization?
App monetization describes how app developers and publishers generate revenue streams via their user base. For this discussion, we’re talking about models that don’t relate to user purchases. The model for app monetization is in-app advertising.
Free apps play third-party digital ads during app sessions. The app publisher receives money from those advertisers based on clicks or impressions. Various ad models provide this opportunity.
In-App Advertising Models
Free apps depend on ad revenue. There are three different models you can apply:
- CPM (Cost per Mille): No user interaction is involved; it’s just payment based on impressions. Least intrusive, lowest fees.
- CPC (Cost per Click): Advertisers pay apps if someone clicks on the ad. Moderately intrusive but with higher fees.
- CPA (Cost per Action): Advertisers pay when users take a specific action. Most intrusive with the highest revenue.
For each of these cost models, you can leverage different ad types.
In-App Ad Types
There are three main types of in-app ads. Let’s look at each and how they monetize.
These ads are full-screen pop-ups that display at specific time frames. For these to have the most impact, be strategic on when they play. Games present them between levels, and entertainment sites often use them when someone clicks on a story. It’s best not to use them during open or close. Nor do you want them showing when users are completing a task.
Banner ads appear at the top or bottom of the page. They are small and don’t distract users. CTR (click-through rates) are typically low. However, numbers can improve if the offers are relevant to the user (e.g., downloading similar games or retargeting from recently visited websites).
A native ad experience appears like a natural part of the app. It blends into the content, so it’s less intrusive. Because of this, native ads receive 53% more views than traditional display ads. They also increase purchase intent by 18%.
They can perform well if the content is of interest. It’s still apparent it’s an ad, but it can still provide useful information to someone.
Beyond these ad types, there is a seamless, non-intrusive option for monetization that looks nothing like an ad—offerwalls.
Offerwalls: The Ad Alternative and Monetization Master
Offerwalls are non-intrusive ad units. They don’t look like display ads at all, and your users initiate the interaction with the “ad” to receive a reward. As such, they provide a better experience for users. They are one of the best ways to drive incremental revenue.
Any app can deploy offerwalls for monetization. If you do it well, you can increase CPM values. Offerwalls don’t compete with other ways you generate revenue—in-app purchases or subscriptions.
Offerwalls can be highly customized to appeal to your audience with rewards meaningful to them. They don’t come with platform fees, so there’s no profit sharing with the app stores. You can disperse these via iOS, Android, mobile web, and desktop using CPI, CPE, CPA, and CPC campaign types.
In addition to monetization, offerwalls can extend sessions and drive deep engagement. That aids retention, which is critical to optimizing monetization. You have the freedom when working with a versatile offerwall platform to test different rewards, launch promo specials, use multiple placements, and brand it.
All these features and attributes make offerwalls a primary driver of monetization.
App Monetization and AdAction
If you’re ready to rethink monetization, then AdAction is here to support you. With one of the industry’s leading offerwall inventories and in-app ad capabilities, we can help you monetize with ease. Contact our monetization experts today to start earning more.