The trend toward freemium app economies is no secret: users increasingly shy away from paid apps, and app publishers continually refine and readjust their monetization methods. So which monetization methods are most prevalent?
According to a recent Mobile Gaming Report by Business Insider, advertising and in-app purchases remain the top two monetization choices for mobile publishers:
It’s not surprising that only 20% of app developers opt to monetize through the install. After all, this pairs with the small number of users actually willing to pay for an app. What is interesting, however, is the number of users who actually make in-app purchases.
According to the study of over 1,000 game mobile game developers, only 2.1% of users will make an in-app purchase. Of them, the largest spenders are known as “whales”. While whales account for only 0.2% of an app’s total users, they contribute 86.6% of total app revenue.
While whales are coveted, their scarcity suggest that they would more aptly be named narwhals. Meanwhile, minnows and dolphins are areas of promise for mobile publishers. Comprising 2% of total users, minnows and dolphins account for 13.4% of total in-app revenue.
While whales take 18 days to convert on average, dolphins and minnows take 12 an 8 days respectively. For publishers, this means a shorter path to monetization, and a longer window wherein users can monetize before re-engagement tactics are required.
The study goes on to reveal that apps leveraging opt-out push notifications have a 50% higher long term user retention than those with opt-in notifications. Of course, this isn’t all-too surprising: users who are enticed with a targeted and well-timed message are more apt to return an app. When they do, these minnows and dolphins are more apt to mature, with some of them becoming whales over time.
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