Before we begin on the topic of how to monetize an app idea, a brief intro to the concept itself should be helpful. Monetization is a broad term that includes all processes necessary for adding and/or deriving monetary value from something. For example, Youtubers often monetize the content they create by earning ad revenues from them, as well as creating membership tiers through YouTube and other patronage sites.
An app idea is a core, abstract concept which can be digitized by developing a software application in line with that vision. Monetization potential can be embedded into the idea itself, but those processes will come at a later time. Once the app idea has been developed into an app, debugged, beta tested, and patched, that’s when the monetization plans can be put into action.
The journey from a core concept’s inception and subsequent app development, right up to the time when monetization plans are put into effect for the first time, is a long one. However, thanks to several successful apps across all genres showing us the way for well over a decade, there are several established roadmaps that you can follow. There isn’t exactly a template to successfully monetize an app idea, but there are certain guidelines that we will be discussing next.
Organize Your Idea and Mature It Into a Plan
If your app idea is still in its abstract state, you will need to jot it down first. Write down as much as you can about each facet of the future app as you see it. It is likely that while you are doing this, your idea will both expand and organize itself into a decent app development plan. Even if you have no prior experience, you will find yourself maturing along with your idea.
Short of knowing about the concept in question, it would be impossible to provide a comprehensive list of categories to organize your app idea into a proper plan. Nevertheless, the following should help you get started:
- Document your explanation of the idea behind your future app
- Define what you expect the application to be capable of doing, aka the features
- Define your target audience and which of their needs the app will cater to
- Define exactly how your app will cater to those needs
- Define related, additional features which will augment the app’s core features
Once you have these few categories filled out as best as possible, you will then need to learn about developing, estimating, evaluating, and of course, the process of selling an app, aka app monetization. Even if you are a software engineer who has already developed the application, monetizing it is a whole different ballgame. Go through this comprehensive guide on the process of selling an app from inception to monetization. As far as monetizing app ideas go, you cannot exactly monetize an abstract concept, so the following steps will be based on the presumption that you have the app or at least a software prototype ready for launching/testing.
Learn From Genre Leaders
If we glance through the world’s highest-grossing smartphone applications such as TikTok ($1.71 billion), PUBG Mobile ($2.01 billion), and Roblox ($1 billion), we can see that they are generating billion+ dollars per year in revenues, as of December 2021! It means that their monetization models were extremely successful, and we can certainly learn from them. Even more than that, however, it provides us with a clear picture of what the world is into right now.
Let’s take TikTok, for example, because the app managed to rise above the massive negative press which it got initially on launch, proving to us that opinions are flimsy and innovative social media apps can be just as successful in 2022 as they were five years back. From a purely business perspective, we can isolate the two main aspects of TikTok, which have turned it into the world’s second highest-earning app, as well as the world’s leading social media app right now.
- The brilliant AI behind the app has managed to connect the right content with the right audience with unprecedented accuracy.
- High potential to receive ROI for influencers from their content; a concept which was invented and later abandoned by YouTube for unclear reasons.
We can break down every successful application across all genres in a similar fashion to understand what it is about them that clicks with their TA. Find the top three most successful apps within the genre to which your app will be catering and see what the core features that their customers like so much about these market-leading applications are. You should be able to perfect the monetization process with a little guidance from the market leaders.
Keep the Accessibility Relevant
Relevance is key to successfully monetizing any app today. Now, to explain relevance as is applicable in this context, let’s discuss a few core ideas for a better explanation:
- First, decide if an in-app purchase model or a premium (one-time fee) model would make the app more desirable for your TA
- Remember that unless the app is strictly B2B, you might be closing off a huge portion of your B2P TA by making the app premium only.
- You can always offer a free app that depends on ad revenue generation for its monetization, with a link to a paid version with no ads.
- Apps catering to business clients and customers are a lot easier to sell as premium apps, and you can also offer additional features at an extra cost of a subscription.
Speaking of subscriptions, that is the most popular monetization model for apps today. To keep subscriptions relevant to your TA, ensure that it has been priced with the TA in mind. Note that PUBG Mobile is the most successful revenue generator across all app platforms, and yet, none of its purchases are obligatory or game-changing.
Note that the process of monetization is not the same as marketing, although they can overlap at times. For example, if you have a business SaaS app that’s targeted towards the B2B sector, email marketing is an excellent medium for spreading awareness about your application’s benefits. Monetization, on the other hand, would be the scalable payment plan that such an app might use to generate its revenues. Marketing investments and product monetization models share the same goal, but they are certainly not the same actions.