Best Ways to Monetize An App: App Data Monetization and 8+ Trends

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How should I monetize my app? 

App monetization is crucial for turning your mobile application into a sustainable business. Successfully monetized apps not only cover their operating costs but also generate profit, fueling further development and enhancements. Various monetization strategies exist, each suited to different app types and user bases. Selecting the right one depends on factors like user behavior, app functionality, and market demands.

Understanding the mobile app market’s potential is vital. According to Statista, the global app revenue reached nearly $420 billion in 2022 and has been growing steadily year after year, with an estimate of $575,18 billion by 2025. This continuous growth shows how the app industry becomes more and more competitive every year, with total downloads adding up to 260+ billion in 2023. In this competitive landscape, finding new ways of acquiring revenue from your apps is of utmost importance. This guide will explore the best monetization models, their pros and cons, helping you identify the most suitable approach for your app.

What is app monetization and how does it work?

App monetization is the process of converting app usage into revenue, a vital aspect for developers looking to sustain and grow their applications. Essentially, monetizing an app involves implementing strategies that generate income, such as in-app purchases, subscriptions, advertisements, or data monetization. The choice of monetization strategy should align with the app’s design, target audience, and usage patterns. Understanding how to monetize an app effectively requires insight into user behavior and market trends, ensuring that the monetization method enhances the user experience while maximizing revenue potential.

How to monetize an app: Top strategies

Monetizing an app effectively involves choosing the right strategy from several available options. Each method has its unique benefits and fits different types of apps and user engagements. This section explores the top monetization strategies, helping you decide which one aligns best with your app’s goals and user base.

App data monetization

App data monetization is a powerful strategy that utilizes the data generated by users within your app to create revenue. This approach respects user privacy by focusing on aggregated, non-personal data, providing valuable insights that marketers and advertisers highly value.

What is app data monetization?

App data monetization involves selling or licensing the usage data collected from your app’s users to third parties. This data, which is anonymized to protect privacy, can include user behavior, app usage frequency, and preferences, which are valuable for market analysis and targeted advertising.

How does data monetization work?

In data monetization, developers integrate specific SDKs into their apps that collect and anonymize user data. This data is then packaged and sold to interested parties, typically advertisers or researchers, who use it to improve product offerings or tailor marketing strategies. The process is seamless and operates in the background, ensuring that the app’s performance remains unaffected.

Is data monetization legal?

Yes, data monetization is legal as long as it complies with relevant data protection laws such as GDPR in Europe and CCPA in California. These regulations require that users are informed about the data collection and have consented to it. Transparency and user consent are crucial to legally monetizing app data.

How much does data monetization make?

The revenue from data monetization can vary widely depending on the app’s user base size and engagement level. Apps with large and active user communities can generate substantial income, as high-quality data is in great demand. Typically, data monetization can complement other revenue streams, significantly boosting an app’s overall earnings. Learn more about how keyboard app monetization can be implemented in your own app using Fleksy’s SDK and lead to a +$2 million revenue as our clients reached in 2023. 

Keyboard app monetization

Integrating data monetization within keyboard apps, like Fleksy’s, offers a unique opportunity. Keyboard apps can collect rich and diverse data on typing speed, language preferences, and frequently used phrases without compromising personal security. This data is immensely valuable for enhancing user experience and refining predictive text capabilities, making it a lucrative monetization avenue.

Aside from the monetization possibilities, Fleksy is renowned for being one of the top keyboard providers thanks to its speed and accuracy. Additionally, its benefits include:

• Branded links, content and banners, providing you with an extra monetization tool
• A lightweight system-wide preload
• Supports 82 languages
• Contributes to boosting lifetime value by 2.5x
• 50% uplift in Partner App DAUs

These are some of the reasons why Fleksy is used by +100 million users globally and has been awarded the Guinness Record for The Fastest Keyboard not only once, but twice!

In-App Purchases

In-app purchases allow users to buy virtual goods or additional features within an app. This model is prevalent in gaming and service-based apps, offering a direct way to monetize user engagement.

• Pros: In-app purchases can significantly increase overall revenue as users pay to enhance their app experience. This model capitalizes on engaged users who are willing to spend money for a more personalized or advanced experience.
• Cons: If not integrated carefully, in-app purchases can lead to user frustration, especially if they feel pressured to buy to progress. This can harm the user experience and potentially lead to negative reviews and decreased usage.

Paid Apps

Paid apps require users to make a purchase before downloading, which can filter in a committed user base right from the start.

• Pros: Charging users upfront guarantees immediate revenue per download and filters out non-serious users, ensuring that your user base truly values the app’s content or functionality.
• Cons: The initial cost can deter potential users from downloading the app, limiting your market reach and slowing user growth compared to free apps. To ensure customers do purchase the app, it should have a good reputation and benefits that are clear to users.

Fremium Apps Subscriptions

Similarly to in-app purchases, freemium models offer the app for free with limited features and charge for premium features through subscriptions.

• Pros: This model attracts a large user base with free functionalities and gradually converts them into paying subscribers by offering valuable additional features.
• Cons: Converting free users to paid subscribers can be challenging, and the presence of too many limitations in the free version can deter prolonged use and satisfaction. At the same time, users should be able to see the benefits of purchasing a subscription in comparison to using the free version only. 

Ad placements

Ad placements involve displaying commercials within the app layout. This strategy is widely used in free apps to generate revenue without directly charging the user.

• Pros: Ads provide a steady revenue stream without requiring purchases from users, making it easier to monetize a large user base quickly.
• Cons: Ads can detract from the user experience if they are too intrusive or frequent, potentially leading to app uninstalls or poor ratings.

How do I monetize an app without ads?

Monetizing an app without relying on ads can be effectively achieved through various strategies, with app data monetization standing out as a particularly promising approach. As illustrated above, this method involves collecting and analyzing non-personal user data to gain insights which can then be monetized by selling to third parties interested in understanding consumer behaviors and trends. Additionally, other non-ad strategies include in-app keyboards, in-app purchases, subscriptions, and premium features, which can create a steady revenue stream while maintaining a clean and uninterrupted user experience. Keyboards like Fleksy’s, not only offer a viable revenue model but also enhance the app’s value proposition by improving predictive capabilities and user interaction data.

What monetization method is right for your app?

Choosing the right monetization method for your app depends on various factors, including your app’s nature, target audience, and overall objectives. Here’s a brief guide to help you decide:

• App Data Monetization: Recommended for apps with significant user interaction and engagement, and functionalities that can be tracked and become useful for third parties.
• Keyboard App Monetization: Virtual keyboards are one of the tools that can be used to collect user data. Through virtual keyboards, users typing into apps of any industry provide information about their behavior, which can be of great use in detecting patterns in typing. These can later be leveraged by developers, who can understand how users interact with an app’s interface, or by technology providers in the healthcare industry, who can detect several factors that could help evaluate cognitive performance in patients. What users need to know is that all of this data is 100% anonymized and that only relevant metrics are saved for this purpose. Additionally, at Fleksy, we review each company seeking to use this feature to ensure that data handling is legitimately safe and compliant with regulations.
• In-App Purchases: Best for apps that offer compelling content or features that users may want more of. Suitable for gaming or service apps where extra features can be unlocked.
• Subscription Models: Ideal for apps that provide ongoing content or services. Provides a steady revenue stream over time. Works well for media, entertainment, and productivity apps
• Paid Apps: Suitable for apps with unique functionalities or niche appeal. Ensures revenue upfront with every download. Best for high-value applications that offer something exclusive. This are usually offered by renowned brands with widely used products, like graphic design and editing tools.
• Ad Placements: Effective for apps with high user traffic and engagement. Generates revenue without direct charges to the user. Suitable for free apps looking to monetize large user bases. These can be found in any type of industry, and with different formats, making it the most common and popular strategy on the list.
• Freemium Models: Perfect for apps that can offer a basic service for free and advanced features for paid versions. Freemium models can work based on a subscription methodology or a one-time purchase, depending on the provider. These models can be commonly found, for example, in photo editing apps, where users can download an app for free and use its basic features, with the possibility of paying to access advanced ones.

Master app data monetization with Fleksy’s virtual keyboard

Unlock the full potential of app data monetization with Fleksy’s virtual keyboard. By integrating Fleksy into your app, you gain access to a sophisticated tool that not only enhances user experience but also opens up lucrative revenue opportunities through the ethical and secure collection of anonymized user data. Fleksy’s technology allows you to gather valuable insights into user typing behavior and preferences without compromising user privacy.

• Leverage Advanced Analytics: Utilize Fleksy’s comprehensive data collection capabilities to understand user interactions and improve your app’s features and usability.
• Boost Revenue: Turn data into profit by providing valuable insights to third parties interested in targeted advertising and market research, all while keeping user data anonymous and secure.
• Enhance User Experience: With Fleksy, improve the overall functionality of your app by incorporating a highly customizable keyboard that adapts to user preferences, increasing engagement and satisfaction.

Take the first step towards smarter app monetization. Explore Fleksy’s virtual keyboard today and see how you can enhance your app’s monetization strategy while maintaining the highest standards of user privacy and data security.