We’re in an ecosystem where a few apps are generating the majority of revenue, like Pokemon Go, which raised Nintendo’s market value by 9 billion dollars in just a few days. Most apps don’t have the same brand power or marketing budget, so they struggle to generate revenue.
And that struggle is now all too common: 93% of the 179 billion app downloads on tablets and smartphones in 2015 were free apps and mobile developers earn under $500 a month on average. Since free, competitive alternatives usually exist, charging an initial fee isn’t always possible, which begs the question; how do apps monetize effectively on mobile?
Most commonly, you see companies try mobile ads, which have proven to help generate revenue, at least from a short term perspective. This channel needs to be examined more closely though as it typically isn’t the best way to sustain a mobile business permanently, unless you’re the likes of a Facebook or Google. If you’re thinking long term, which you should be, given the incredible amount of time you spent building an app to attract and engage a passionate audience, you need to explore other possibilities.
There are a few monetization channels in addition to offering a paid app or shoehorning mobile ads into your user experience that are emerging and are proving to be successful. One of these channels is mobile affiliate marketing, or a partnership between two businesses usually a commerce company, like Uber, and a publisher, like Foursquare, where the publisher integrates commerce actions contextually and the companies’ share in the resulting revenue (i.e. requesting an Uber ride from a Foursquare location).
So, are affiliate partnerships on mobile the solution? For some absolutely, and for others it will work well in tandem with other strategies. Fortunately, we can look at the large amounts of data and industry averages to evaluate how different strategies stack up and to understand which are most effective.
To help you do this, we collected industry benchmark data to serve as a starting point for your mobile monetization strategy.