Building an App is a serious business and monetizing through it is a tactic to learn and adopt. According to a report by AdColony, advertisements generate 55% of mobile publisher revenue on average. According to studies, the mobile app revenue would touch $189 billion by 2020. To tap this blooming market, companies work day night to find the best avenue providing the maximum ROI. Selling of apps in the app store, free download with subscription fee based on the usage, free app within app purchases or free app with advertisements are few of the popular ways companies resort to. There are thousands of app available in the market but only a few survive.
Rovio and the Angry Birds
It all started with a simple screenshot of an unhappy-looking bird. The company started charging $0.99 for application in the US market in inception. The company released a free “Lite” version later which made it more than a mobile application. Rovio extracted revenue from Angry Birds by offering in-game paid upgrades and releasing different paid versions of the game.
It has become one of the most popular source of communication. With easy to load, send, receive text, audio and video messages over phone app it gives you the best way of communicating with your friends and family and stay in continuous contact. Whatsapp earlier claimed to charge $1 after the first year, interestingly the expiry date never appeared. After the acquisition by Facebook, the revenue generation is primarily through the database management. It is speculated that facebook uses the behavioural and personal information from whatsaap and sort advertisements accordingly.
Snapchat has a unique revenue generation model. It does not share personal information neither it relies on direct advertisement. It user-friendly and camouflaged filters, that many users don’t even know that they are advertisements and rather enjoy them. Sponsored Geofilters is one, which is specially designed for certain locations and occasions, used to advertise them. Augmented Reality is used like the Gatorade, Taco bell etc. which is used to build their brand equity which saw a tremendous user engagement. Sponsored stories are used to advertise events and product launch.
Skype is the most widely used video and voice calling software over internet. It also includes instant messaging, file transfer and video conferencing. Skype interestingly boasts about its modest ways of generating revenue by using skype credits which allows you to call anywhere and everywhere. But skype has a very diverse revenue generation model. The company earns royalties by cobranding with other companies. It has sold its services to many companies i.e. business to business sales. Skype has not fully developed advertising as it revenue generation avenue.
Playable advertisements and posters is the most widely used medium used by application companies these days. Video advertisements generate 31% of the overall revenue generated from advertisements. Although playable ads are being rewarded as one of the best revenue resources by the publishers, not all platforms support the payables. Apart from revenue generation, customer retention is prime importance. The lifetime value of your customer will determine whether the app is a hobby or a business.