The app market has exploded beyond imagination. It has come such a long way in 10 years of existence, encompassing millions of app developers and billions of users. App Stores, major distribution platforms, are teeming with products and a number of downloads nearly hit the 200 billion mark in 2017. Everyone seems to want a piece of the delicious pie. What is interesting is that a lion’s share of revenue originates from free apps that are raking in money. How is that possible? Well, this is largely due to smart monetization and marketing tactics that are evolving together with the app ecosystem. Here are some major trends that will influence them in the years to come.
Freemium Model Reigns Supreme
Everywhere we look, we see freemium apps winning customers over and swimming in revenue streams. They are also able to achieve impressive session lengths and engagement rates in the process. Thus, in the next few years, more and more apps will adopt a freemium model as a standard practice. Simply put, the majority of users expect the app to be free to download. And once they come to like the app, they are prepared to opt-in for premium features and pay for them. To nurture this kind of loyalty, developers have to foster a swell user experience. What is more, they need to transparent about their monetization practices.
Brands Are Poised To Dominate
In-app advertising spends shows no signs of cooling down. On the contrary: consumer media habits pave the way for this upward trajectory to continue in 2018 and beyond. Namely, modern consumers are increasingly leaning towards reputable brands that are perceived as trustworthy paragons of quality. Consequently, mobile apps are blowing other media forms like TV out of the water. Those that benefit the most are rising powerhouses like Supercell and Rovio: mobile game publishers that established themselves as premium media producers. Many other publishers will seek to jump on the roaring bandwagon and capitalize on brand advertising.
Mediation 2.0 Is Here To Stay
Nowadays, freemium app publishers tend to work with mediation providers in order to facilitate the process of integrating multiple ad networks. They naturally want to get the most bang for their buck with all available placements. It is becoming clear, though, that the waterfall model of demand prioritization via tedious filtering does not cut it. Hence, publishers are embracing real-time auction bidding model. They will also rely on app marketing platforms like Appnext that feature tools such as premium video ad suite and retargeting programs. This approach is rooted in the real-life context of users and aims to engage them at the right moment of the day.
User Acquisition Hitting A Plateau
Nearly 5 billion people own a smartphone as it is and in countries like the U.S, ownership rates are 95%. This is to say that we have almost reached the peak of market penetration and there is no going up from there. In other words, smartphone growth will not serve as a driving force of app growth anymore. Developers will have to focus on their existing customers instead of tapping into new markets. More specifically, they will try to gauge the value of consumers in terms of revenue they generate. As a result, the importance of tracking of downstream metrics is going to grow exponentially in the following years.
Value Exchange Marketing Gains Traction
Last year, we saw the surge in the area of value exchange ads that grant access to premium content or rewards in exchange for a certain user action. They are now basically the norm of digital video advertising, its most popular form among consumers. This development, combined with the tendency of users to spend more time in apps, allows publishers to take the freemium app monetization strategies to the next level. In 2017, some big names have ditched subscription-only models in favor of value exchange ad counterpart, and we expect to see this trend spreading outside the already-transformed gaming industry as well.
Monetization Of Data
Consumer personalization is on top of priority lists. The only way to pull it off and improve user experience is to dive deeper into data. There, one can uncover shifting usage patterns and interaction habits of people. All of this plays out without any distractions like ads or payment walls. Besides, mobile app developers and publishers have access to a vast amount of behavioral data. The only issues are privacy and security of that data. Namely, consumers must be made aware it is not misused. This implies a commitment to education and open communication between them and brands. Done right, data monetization tactic increases the amount of revenue that each user brings.
On Top Of The Game
In the booming app market, there are numerous success stories of free apps turning into real money-making machines. App monetization tactics surrounding them are more mature and sophisticated than ever, but this also means that it is no longer enough to just prompt someone to download an app. That is just one step on a long journey. So, create a strong marketing and monetization strategies prior to launch. Stay on top of aforementioned trends that are only going to gain more steam and recognition. Do not hesitate to champion brave new monetization models. It is time to lay the groundwork for engagement and revenue to soar— get ahead of the curve.