How The Top Grossing Apps Overcome These Common Monetisation Issues

According to Tech Jury, Americans spend an average of 5.4 hours each day on their mobile phones, picking them up a staggering 63 times. Given that this is where a large percentage of consumer attention is focused, it’s no wonder that some of the world’s largest companies are pursuing mobile app development as a way to generate more revenue and gain more exposure for their brands.

As a result, the mobile app sector has become one of the world’s fastest-growing markets – and has been for quite some time. In fact, by 2023, global mobile app revenues are predicted to hit $935.2 billion. However, as the market becomes more saturated, app developers are having an increasingly difficult time monetising their creations. After all, monetising an app is not an easy process, especially as consumers become more conscious of marketers’ methods to grab their attention and extract their dollars.

Fortunately for developers, there are several ways to monetise their apps, such as in-app purchases, adverts, annual memberships, and monthly subscriptions. Many employ a “freemium” model, which involves attracting many users with a free version of the software, only to charge them a subscription to gain full functionality.

With that said, each of these strategies has its own set of challenges, which is why it’s necessary to look to some of the industry’s leading examples to understand how they overcome these hurdles. On that note, let’s look at some of the most prevalent app monetisation issues and how the world’s top-grossing apps deal with them.

Consumers are becoming more resistant to advertisements

For a long time, advertisement has been the most popular solution for app monetisation among app developers. However, as time has gone on, ads have started offering diminishing returns, largely because consumers now demand a better user experience than ever before, leading to “banner blindness.”

With such high levels of competition, unfortunately for app developers, mobile ads tend to be a major disruptive factor, leading to negative experiences and low retention rates. Furthermore, a reported 25.8% of internet users block advertisements on their connected devices, nullifying this monetisation strategy’s effectiveness.

So, how do some of the biggest app developers in the world overcome this? For the most part, it’s all about choosing your ads wisely and finding more intuitive ways to integrate them into your application. It helps to have a deep understanding of your user base, such as knowing their likes, dislikes, interests, and general demographics. For example, TikTok, which is ranked as the 6th most popular app in the world, blends its ads seamlessly with its main content. This is what is referred to as native ads. They know what their users want (short-form video content), and they don’t veer too far away from this concept with their ad formats. For the most part, it’s hard for users to discern between what is an ad and what isn’t, which leads to a higher click-through rate, and therefore, more income.

Low retention rates hurt your bottom line

It’s hard to properly monetise your mobile applications if you cannot retain your users. First of all, the cost of acquisition for mobile app users that end up making an in-app purchase is said to cost around $65, according to one study. This number rises to $162 for users that subscribe to a paid service. 

Secondly, even if you manage to have a high CTR rate with your ads, it will be hard to overcome such high acquisition costs unless you can maintain a loyal user base. This is why the vast majority of the top applications make concerted efforts to improve the usability of their products. 

Take any mobile games from the top-grossing apps (such as Pokemon GO, Candy Crush, or Clash Of Clans). The developers of each of these games are continually striving to improve the usability of their product with new updates, bug fixes, patches, and special events. This deters users from deleting the app, which means the developers have more of an opportunity to generate revenue.

Failing to provide enough value to users through premium

Most of the apps across the Google Play and iOS Store these days are free to download. This results in a variety of freemium, subscription, and premium monetisation strategies being employed by developers. 

The strategies usually revolve around a similar concept, which involves drawing users in and enticing them to pay extra for added functionality. However, one of the biggest mistakes app developers make is failing to provide a sufficient value proposition to users before asking them to upgrade to these premium services.

It goes without saying that consumers are typically not fond of handing over their hard-earned cash unless they know they will get something in return that they want.

If the value they are going to receive is unclear or murky in any way, then the chances of them paying for a premium are slim to none. 

Let’s take Google One, the most popular app in the United States at the time of writing, as an example of how the premium method should be used. Rather than leaving users in the dark over what they can expect to receive by upgrading to premium, Google clearly offers a variety of key use cases for their service and even provides a choice of upgrade options that appeal to different types of users. 

Staying away from a one-size-fits-all approach is a great way to provide more value to users, as they will be more likely to find a plan that works for them rather than having to pay for services they will not use. Furthermore, rather than just offering users more storage space with the more expensive options, Google One provides extra benefits to subscribers of their higher-tier plans, such as cashback in the form of Google Store credit, a VPN for Android users, and access to Google Experts that will help with any technical issues. This provides immense value to the user, which is one of the primary reasons Google One finds itself at the top spot of the download charts.

Final thoughts

With the majority of mobile applications being free to download, app developers must find a different way of monetising their apps. In the past, ads have been the standout solution to this problem. Yet, as users continue to demand a better user experience, developers have started to look to other revenue methods. 

Whether it be native ads, vastly improved usability, or providing a better value proposition for their premium services, many of the top-grossing apps have overcome these monetisation issues with careful planning and a deeper understanding of their user base. For the best chance of success with your application, it would be wise to follow in their footsteps.