How to Monetize an App [In 2023]

Summary

In this episode of Raw Startup, the founder of Vivino, the world's largest wine app, explores the top five strategies for monetizing apps in 2023. These include selling products or services, offering digital subscriptions, integrating advertising and sponsorships, selling digital goods or in-app purchases, and selling anonymized data. The video discusses the pros and cons of each method, emphasizing the importance of user privacy and compliance with regulations like GDPR. The founder shares insights from his experience, highlighting the complexity and potential of app monetization.

Takeaways

• 💡 The founder of Vivino shares insights on monetizing apps, highlighting that the app has remained free yet successful.
• 💼 There are multiple strategies to make money from apps, with the top five being product/service sales, digital subscriptions, advertising, digital goods, and data sales.
• 🛒 Selling products or services within an app can be done through affiliate marketing, marketplaces, drop shipping, or full e-commerce, with varying levels of complexity.
• 🌐 Digital subscriptions are popular for regularly used apps, offering a recurring revenue stream, but may not suit occasional use apps.
• 📺 Advertising in apps can be simple to implement with platforms like AdMob, but requires a large user base for significant revenue and can be intrusive.
• 🎮 Digital goods, often in-app purchases, are prevalent in gaming apps and can be consumable or non-consumable, offering one-time or recurring revenue.
• 🔒 Selling data can be lucrative, especially for industry-specific trends, but it's crucial to handle user data responsibly and comply with regulations like GDPR.
• 🚫 A strong emphasis on privacy is advised, with a warning against selling personal user data due to strict regulations and potential fines.
• 🤝 The founder suggests aligning with platforms like Apple, which prioritize user privacy, and to avoid third-party SDKs that might compromise it.
• 💰 Monetization strategies can be combined to cater to different user preferences, such as those willing to pay for an ad-free experience or purchase additional features.

Q & A

What is the primary question the founder of Vivino addresses in the video?

The founder addresses the question of how to make money from a free app, specifically discussing various monetization strategies for apps in 2023.

How many users does Vivino have according to the founder?

Vivino has over 60 million users worldwide.

What are the five biggest ways to make money off apps mentioned in the video?

The five ways are: 1) Selling products or services, 2) Digital subscriptions, 3) Advertising and sponsorships, 4) Selling digital goods, and 5) Selling data.

What is an example of a low complexity way to sell products through an app?

An example of a low complexity way to sell products through an app is through affiliate deals where the app sends buyers to another platform that handles the e-commerce.

What is the advantage of selling products or services within an app?

The advantage is that it can be a feature that doesn't get in the way of the app's primary function, and there's a potential for a big upside if customers buy a lot, with the app getting a cut of the sales.

Why is the digital subscription model popular for apps?

The digital subscription model is popular because it's suitable for apps that are used regularly and it provides a high margin, recurring, and predictable revenue stream.

What are some examples of apps that use the digital subscription model?

Examples include Netflix, Disney+, Max (formerly HBO Max), and various health and wellbeing apps like Reflectly, Strava, MyFitnessPal, and Headspace.

What are the potential downsides of using advertising and sponsorships as a monetization strategy?

The downsides include the potential intrusiveness of ads, the need for a large user base to generate significant revenue, and the fact that users often do not like ads.

How does the founder of Vivino feel about selling user data?

The founder is strongly against selling user data, emphasizing the importance of privacy and the legal risks associated with it, especially with regulations like GDPR.

What advice does the founder give regarding combining monetization strategies?

The founder suggests that often you can combine different monetization strategies to monetize different kinds of users, which can lead to a better overall revenue.

What is the founder's recommendation for app developers interested in selling data?

The founder recommends being very careful and only selling high-level, anonymized data. He warns against selling personal user data due to strict regulations and potential fines.