Software Monetization Models and Strategies 2022 CIO Resource Library

Always promote high-quality products to boost retention and avoid losing user engagement. Poulin also developed a small course of their own on their software platform, and they send out an invite code for customers who book a demo but need more support. It’s also a way to get a feel for what using their platform is like, and it all feeds into their thriving client services business.

To say it even simpler, it’s taking something that doesn’t create revenue and turning it into a profitable, revenue-generating item or service. Difficult to determine how much content to offer for free before attracting subscription users. With in-app ads, your audience is engaged in the app and delivers much better conversions.

This strategy allows users to purchase services, content, and special features within the app. By keeping the app free to download, you can use this quantifiable and verified revenue metric to generate app revenue. One of the most common app monetization models is in-app purchases.

The difference between this and conventional markets is that the seller doesn’t pay a listing charge, which is open up front. It serves a variety of purposes, from smart city development to providing users with better and more targeted advertising. However, an app only produces considerable revenue if it has a large audience, which is cause for concern. The use of commercial advertisements and contextual advertisements have been a foundation of software monetization since free software first hit the market. Advertisements can come out in many different ways such as text ads, banners, short commercial videos and other types of software advertisements. I understand that the data I am submitting will be used to provide me with the above-described products and/or services and communications in connection therewith.

Popular software monetization strategies

Use this B2C strategy to target specific demographics and improve your software to encourage more frequent and prolonged visits.


Here are some best practices and hacks from real entrepreneurs to help you convert curious website visitors into paying customers. Move to a hybrid model, adding cloud features and creating opportunities for expansion. Soon after getting the success, immidiately markdown the point to measure. In this way, you can grab more feasible opportunities for your software by refining and improving over time.

  • In June 2020, the European Union opened two new antitrust investigations into practices by Apple.
  • Discrete Point of Value – Once a particular action is completed, the client will incur a charge.
  • When selecting this model, consider how to integrate it without jeopardizing customer loyalty.
  • Advanced data collection and reporting tools help optimize investment in the product roadmap and drive future business strategies.
  • Today, Cloudinary sells three tiers of subscription-based SaaS software, along with a basic “freemium” service.
  • Some app categories are more suited to certain app monetization models than others.

Whether a software application is hosted in the cloud, embedded in hardware, or installed on premises, software monetization solutions can help businesses extract the most value from their software. Another way to achieve software monetization is through paid advertising and the various compensation methods available to software publishers. Pay-per-install , for example, generates revenue by bundling third-party applications, also known as adware, with either freeware or shareware applications. Some developers choose to create free apps with a subscription model.

Email marketing

While most networks don’t pay users for their content or pay only for the most trending content, users still contribute vast amounts of free content daily. According to the Datareportal January 2022 global overview, half of the world (58.4%) now uses social media. This means 4,62 billion people worldwide use social media, with the average daily time spent using social media being almost 2,5 hours.

Piracy also presents a great threat to the gaming and mobile app industry, with losses going into billions, especially if pirated software is available immediately after the game’s release. A company can monetize its assets and products in a variety of ways. Because monetization is essential to strategic planning, it significantly impacts how businesses develop. If an app is very popular among a certain niche market, companies in that space may approach the app developer for sponsorship opportunities to get their brand in front of your app users. If you consider yourself a world-class marketer, then choosing an in-app ads strategy is a smart move.

Popular software monetization strategies

Despite Android owning the notoriously large market share (75%), Apple’s App Store still remains untouchable when it comes to generating profits. In 2020, you can enable family sharing for any in-app purchase and add IAP inside an Apple Watch app. But before jumping in, note that they’re unpredictable in terms of the generated revenue. You also have no guarantees about the stability of your revenue stream.

Product Monetization Strategy: Your Forecast for the Future

Therefore, when you adjust your product’s prices, be sure to communicate to your existing and potential clients. Utilize this B2C strategy to accompany your users in their journeys and promote user engagement through up-to-date updates. Additionally, 85% of B2B marketers work with email marketing tools to assist with content marketing, while 90% prefer email engagement to measure content performance. Google offers a host of free services such as Gmail and Google search. By enabling a tracker in your account, Google collects your data, sells ads to advertisers who then target you with ads.

Popular software monetization strategies

You can use advertisements in the free version while recommending a “no advertising” feature in the premium version. Excellent outcomes – Even though many people confuse in-app ads with web banners, they work slightly differently. In-app advertising also outperforms banner advertising on web pages. Allow software engineers to control ads so that they can control the layout and display of ads for users. Users are willing to put up with ads and forgive the product’s creators in exchange for the ability to use it for free.

1. Advantages of Subscription

This monetization model is used by many well-known mobile applications, including Spotify Music, Angry Birds, Evernote, DropBox, MailChimp, and Tinder. Tinder generated approximately $21,37 million on Google Play in June 2019 by offering its Plus and Gold versions. Despite the fact that new products are how do free apps nake money introduced to the market on a daily basis, some of which are quite innovative, only a small percentage of them generate a profit. It goes without saying that competition is fierce and that rates will rise. And it’s now impossible to imagine success without careful marketing and user behavior analysis.

Popular software monetization strategies

He works with telecom and technology companies on growth and business transformation, where he not only devises strategies for his clients, but also leads teams to successfully execute them. Ayo’s area of expertise is software monetization where he is currently helping leading software companies to successfully navigate the shift to cloud and flexible consumption models. Feature-based packaging offers customers the flexibility to configure and personalize services, and enables companies to diversify offerings, helping improve monetization potential.

HubSpot has ideally adopted this software monetization strategy as all of its products are offered on a subscription basis. Daily product updates and improvements ensure all clients enjoy different product varieties but at the same prices. Learn why on-premise software vendors are incorporating cloud-like business models and subscription-based pricing that make them more competitive and best meet the needs of their customers. Selecting the right monetization platform is crucial for any monetization strategy to succeed. Without the support of Billing and Revenue Management software and a unique monetization solution, no business can successfully implement its monetization model in praxis.


It is a subscription-based application that brings in $25 billion a year through the subscription-based service. In this app monetization strategy, users can pay a small monthly fee to access their app on a single screen. One of the initial mobile app monetization strategies that many publishers who are new to the mobile app sector consider is charging a fee to download the app from the Apple app store or Android app store.

Competitive analysis with market mapping

Software and apps have a higher click-through rate than web ads, making monetizing ads vital. In-app advertising makes ads appear natural thanks to target advertising, and you can custom tweak the ads to appear at various stages in the in-app journey. Because of this, many social media and news apps utilize this monetization method. This will see you give part of your software on app stores for free to your user base.

However, a business can mostly neutralize these drawbacks by fulfilling more of the initial conditions and considerations for adoption. If effective planning is executed ahead of time, your company can alter the sales compensation packages. Equally, while revenue is initially more difficult to project, a thorough knowledge of how a product is used will give enough information to estimate monthly revenue forecasting. Without a clearly defined alignment with a cost per procedure or action, consumption models can become increasingly difficult to manage as they exist within a pricing gray area.

This could lead to disputes with the customer, where they disagree whether a cost incurred is aligned to the specific action taken. Upon meeting one, or several of these conditions, a company will have the motive to move to a consumption monetization model. However, they must fulfill additional requirements of this monetization model. Now utilizing your previous data put them under each part and prepare your final segmentation into small groups.

The fastest growing and most efficient companies are implementing data monetization. An app with in-app purchases has to pay the amount that app stores charge as a fee (currently 30%). Unsurprisingly, free apps show faster download speeds as users get to try your app before paying for anything in the app. Looking at how mobile monetization impacts the app experience is just as important as looking at revenue maximization. You can take a portion of any transaction that two users make on your app. For instance, you might take a portion of the earnings when someone sells something.

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