Navigating the monetisation minefield

We’ve seen it many times, you have an app idea and it needs to generate you income.  You’ve used other apps on your mobile and they charge you, so surely that can work for you too right? Sounds simple enough, but choosing the right monetisation strategy for your product and working within the constraints of the app stores can quickly become a minefield. In this post I want to introduce you to the options available and the primary pitfalls to watch out for so you can choose the right solution for you.

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Monetisation options

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One off purchase - In this format users pay a single fee to download your app.  They never have to pay again. 

In app purchases (IAP)

• Subscription - Subscription allows you to ask for payment from users on a regular basis. Users can also get a free trial at the beginning of their subscription.
• Consumables  - In app consumables are single payment additions that can be ‘spent’ by the user, and are most common in game apps, such as coins or lives. 
• Non-consumables - These are additional features that you pay for once and you then have access to forever. Examples include a new recipe pack, or character customisation such as clothing.

Ads - If you want your app to be free to users but still make you money, ads is an option.  However to get a worthwhile return on ads you generally need many thousands of users. Commonly ads are also coupled with IAP so users can pay to remove ads from the app.

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App Store Gotchas

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Although this is a lot to consider, each store also has specific limitations that may drastically affect the compatibility with your audience. Apple and Google do not handle rules and limitations in the same way and so something you can do in one, may not exist in the other.  A few examples of these we’ve experienced include:

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• Pricing - Apple requires you to select a price from a specific list of options and custom prices are not allowed, whereas Google allows you to set your price. 
• Promo codes - Rules on promotion codes are wide and variable across the two stores and monetisation types. Codes for subscription and for one off purchase are drastically different, and one off purchase promo codes are very limited. Variables include the number of promo codes you can create in a given period, expiry on codes, and whether you are limited to free options only. For example you get only 100 codes per version for one off purchase apps, but 150,000 per quarter for subscription on Apple.
• Free sale - If you want to allow downloads of your app for free on Google you cannot change this later.  You have to create a whole new app account to move to a one off payment pricing model which means changing all the link and app page references in your marketing.  IAP’s are available in both scenarios though.
• Bulk purchasing - The stores are not generally built for bulk purchasing. For Apple, downloading apps in volume requires your clients to have either an Apple School Manager or Apple Business Manager account, which is limited to 50% discount only, and Google doesn’t supply an option at all. This doesn’t prevent organisations using the app, but it does prevent offering them a specific quantity or discount.
• Work managed devices - Although organisations can look to download the app to individual devices, payment details and install permissions are still required which are often not available on work devices. Organisations using Mobile Device Management tooling (MDM) are the only ones not affected by this.

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In Summary

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Given the complexity of options available it’s important to take careful consideration over each of these factors in relation to your business and your audience before making a decision on exactly how your app will get you a return on your investment. Do careful research into the limitations and validate your assumptions to ensure your strategy is both effective and compatible with the tools available to you. 

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If you want to find out the best options for you, take a look at our follow up post ‘Three steps to choosing your app monetisation strategy’.  If you have an app project in mind and would like to discuss some of these options in more detail get in touch with us today.

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