Top 5 App Monetization Trends in 2019

In 2019, the number of smartphone users will total a mind-blowing 2.5 billion. Growing right alongside these users is the number of apps in the space. With over 4.1 million apps available on IOS and Android combined by the end of 2018, there’s no doubt that apps mold our digital world.

So what’s the key to making money in such a saturated market? In this digital world of survival of the fittest, an app monetization strategy is key to turning a profit. In 2019, these are the trends we believe will continue to shape the app monetization landscape.

In-App Purchases

It’s a no-brainer: in-app purchases and virtual goods have become one of the most popular mobile monetization strategies, and show no signs of losing steam in 2019.  When incorporated well, in-app purchases are an incredibly effective way to monetize your mobile application. An in-app purchase can be a digital item, subscription, or content sold within an app. A big reason as to why this method of monetization is so successful is because, unlike forcing mobile users to pay up-front for your app, an in-app purchase gives the user a greater sense of autonomy – and a customer who feels in control is likely to spend more in your app.

Another facet to in-app purchases (IAP) is joint in-app advertising (IAA). Historically, it has been difficult to include both IAP and IAA models in the same platform, given each system uses a different vendor. This multiplicity of partners made it far too complicated; however, partners expect companies to begin offering a consolidated process of both IAA and IAP. This unifies revenue, streamlining systems and presenting the opportunity for optimized monetization.

Machine Learning and Artificial Intelligence

Artificial Intelligence (AI) has been gaining quite a bit of attention in recent years. It’s no surprise that it will make its way into the app market in 2019. This industry is projected to exceed $100 billion by 2025, as AI is expected to fully support the top 200 apps. AI has already made it possible for developers to implement technology into their apps without the assistance of industry experts. However, we expect machine learning will develop exponentially.

So what is machine learning? While people often refer to AI and machine learning interchangeably, they are not the same thing. Consider machine learning a component of AI. Essentially machine learning is a process in which machines can learn autonomously without explicitly being programmed. The benefit of AI and machine learning is in the personalized user experience they offer. Because of the tailored nature of this technology, the monetization opportunities are limitless. From increasing customer lifetime value to implementing more targeted ad strategies, this trend is one to look out for in 2019.

Mobile Video

Mobile video has been – and will continue to be – on the rise in 2019. An incredible source of monetization, video formats of in app advertisements are gaining in popularity. The two main types of mobile video: rewarded videos and interstitials.

2CV, commissioned by Facebook Audience Network, published a study on mobile games. They found that rewarded video ads are 53% more likely to be described positively than video interstitials, and players are 23% more likely to buy or use an advertised product when this is used.

Additionally, eMarketer published a study in September 2018 forecasting that U.S. mobile video ad spend will increase by 22.6% in 2019, reaching $15.93 billion.

Mobile Video Ad Spending Graph

If you haven’t already began looking into mobile video, now is the time to do it! This trend is rapidly growing and the chance for monetization is high.

Hyper Casual Games

Research by Newzoo estimated that the world’s consumers will spend $92.1 billion on apps this year, and that over three-quarters (76%) of these revenues will be generated by mobile games.

Of the popular games of 2018, hyper casual – think AngryBirds, Candy Crush – and hardcore action games dominated the market.

App Store Revenues Game and Non Game split graph

In-app advertisements were shown to have the most sustainable and consistent model of monetization. This area will definitely be one to watch throughout 2019.

AR and VR

If you remember the hype around Pokemon Go, you won’t be surprised that our last trend to watch out for is the integration of Augmented (AR) and Virtual Reality (VR) into ads. This technique is gaining popularity among games, and advertisers have caught on to this catchy and interactive method of delivering advertisements, specifically AR/VR powered video ads.

While banner ads were the go-to of the past, this type of in-app ad is close to becoming history. While many companies still utilize this style, research has shown that the click through rate of a banner ad is 0.05%. We are so accustomed to seeing banner ads that, psychologically, mobile users subconsciously “filter” out these types. Therefore advertisers must continually find new ways of engaging audiences in atypical formats… and AR/VR is just the way to do this!

Increased interaction with target audiences provides the ability to attract, engage, and retain clients – ultimately increasing your conversion rate. A unique ability of AR/VR is customizing the experience to the user. Paired with the trends of artificial intelligence and machine learning, AR/VR experiences are on the way to becoming industry standard.

As you think about your next steps and strategies, be sure to keep these top trends in mind. While there are many new developments in the world of app monetization, we believe that the 5 listed here are likely to bring you the most financial gain in 2019.

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