TikTok sets the standard for mobile monetization
TikTok is shaking things up and leading the way for other social platforms when it comes to mobile monetization. In the first quarter of 2023, TikTok became the first app to exceed $1 billion in consumer spending in a single quarter. Honor of Kings, a game and the second-best app, brought in $570 million in global spend on iOS and Google Play. YouTube rounded out the top three with over $530 million.
While total consumer spending doesn’t give the full picture of TikTok’s performance, it does show that it is far ahead of other apps in a highly competitive field. Subscriptions are an important source of revenue for apps, but TikTok has proved to be the opposite, relying on one-off purchases to provide gifts for their favorite streamers. As a result, TikTok is the only non-gaming title to rank in the top 10 for one-off purchase revenue in the USA.
This impressive success has certainly attracted the attention of other social platforms that have not yet succeeded in monetizing their content, and which could draw inspiration from TikTok’s techniques to do so successfully.
Consumers prefer intermediate and high-level in-app purchases
Consumer behavior has changed considerably in recent years, and they are now much more likely to make use of mobile applications. Subscriptions are becoming increasingly popular, as they offer greater convenience and comfort to consumers while ensuring sustainable revenue streams for developers. According to the latest figures, non-game in-app purchases account for 70% of spending in the US between $10 and $100, proving that consumers are more likely to choose mid-level purchases.
This trend is also reflected in the mobile games sector, where low-price and high-price purchases account for 45% and 47% of revenues respectively. The main reason is that consumers feel more comfortable buying more low-priced items, or making large purchases for more expensive items. Developers therefore need to be vigilant and react quickly to developments in consumer preferences.
Hinge: revenue growth of over 60% by 2022
Hinge, Match Group’s popular dating app, has implemented a highly successful monetization strategy. It combines both unique in-app purchases such as Roses (similar to Tinder’s Super Likes) and more expensive premium subscriptions.
With this strategy, Hinge has seen incredibly rapid revenue growth, and the first quarter of 2023 has been particularly successful. Roses accounted for over a third of Hinge’s US revenues on iOS, and the year’s most popular subscription option was $30, up from $20 the previous year.
Good features and good prices are key to mobile revenue growth. If you want to get your share of the $500 billion mobile economy, the State of App Mobile Revenue 2023 Report can provide you with in-depth insight into this sector.