App cloning is the replication of the core features and user experiences of successful apps like Uber, Airbnb, WhatsApp, etc., to fast-track digital business launches. Developers utilize them to meet the growing demand for such services. However, building the app is only the beginning, it is important to know how to effectively monetize the application to ensure long-term success. This article explores some of the most profitable revenue streams for app clones.
1. In-App Advertising
In-app advertising is the most common method for generating passive revenue. Third-party ads in the form of banners, native, interstitials, videos and even interactive advertising have increasingly gained popularity in clone apps. Developers and advertisers agree to a deal via programmatic ad buying, where ad networks like Google AdMob, Facebook Audience Network and Unity Ads identify and deliver high-quality ads to users when a request for such is raised. There are different pricing models for these advertisements, the benefits, drawbacks and uses of which are outlined in the table below.
In-App Pricing Models
| Pricing Model | Description | Benefits | Drawbacks | Use | ||
| Advertisers | Developers | Advertisers | Developers | |||
| Cost Per Mile (CPM) | Developers are paid when an ad reaches 1,000 impressions | Cheapest | Ads displayed enough to receive payment | Does not guarantee conversions/ checks | Lower payout relatively | Improve brand visibility |
| Cost Per Click (CPC) | Developer is paid for each click | Only pay for clicks | Able to demand a high price per click | Even pay for unintentional or accidental clicks | Requires more effort | Increase traffic |
| Cost Per Action (CPA) | Developer is paid after the desired action of the audience | Low-risk model | Good results lead to high rates | Focus on revenue distracts from brand awareness | No guaranteed income | To achieve specific action |
| Cost Per Install (CPI) | Developers are paid at each app installation | Only pay for interested users | High pricing enables a premium price | Paid users do not equal long-term use | Requires persistence & optimized campaigns | Increase install numbers |
2. Subscription Models
Subscription model ensures businesses a steady revenue stream by turning a one-off transaction into recurring income. The rise in adoption and ease of digital payments has bolstered the proliferation of subscription models. Businesses set up automated billing systems to manage payments from customer accounts, reducing manual intervention, saving time and improving user experience. Many apps also include tiered access to content with monthly or annual payments, where different levels of investments provide different features, products and content. To encourage new users and increase conversion rates, apps roll out free trials to hook customers by showcasing the value of the service. However, to minimize churn, businesses need to keep innovating and providing new features to ensure user engagement. Several different types of subscription models are utilized, such as memberships, software-as-a-service (SaaS), box, content, usage-based, freemium and community-based, depending on the services of the clone app. One of the most popular types is the freemium model, where the basic service is provided at no cost but charged for advanced features and no ads.
3. Commission-Based Transactions
App clones of marketplaces and service providers earn revenue through commissions, which are a fixed amount or a percentage of the fee charged. A fraction of the booking fee may be earned by the app from hotels, event organizers, drivers and customers when booking rooms, purchasing tickets or hailing cabs. To ease the overall payment process, the commission is often integrated into the final transaction gateway. The percentage model is more profitable as the earnings are not fixed, resulting in alterations during surge demand.
4. In-App Purchases (IAPs)
In-app purchases (IAPs) are another stream of revenue generation employed in many clone apps. Currency packs, cosmetic items and boosters form common purchases in gaming app clones, while clones of Tinder may offer “Super Like” ability or profile visibility perks as paid IAPs. These purchases improve user engagement and experience, as well as increasing the retention rate. Available as consumable and non-consumable purchases, IAPs can be performed via direct, through app store integrations or credit card transactions, or indirectly through third-party apps. E-commerce apps like Amazon offer numerous payment methods for consumer convenience, bolstering clone apps to do the same.
Conclusion
In conclusion, app clones are complex business models with immense monetization potential, few of which include in-app advertising, subscriptions, commissions and in-app purchases. The revenue stream must be chosen based on target audience, service rendered and app type.