How TikTok is Taking over Mobile Monetization Ads Revenue

TikTok, the widely popular video-sharing app, is transforming the mobile monetization landscape and pushing the boundaries of what is achievable in this realm.

Data from the app analytics platform reveals that in the first quarter of 2023, TikTok achieved a remarkable milestone by surpassing $1 billion in consumer spending within a single quarter. This achievement solidifies its position as the first app to reach such a significant milestone.

Notably, TikTok’s accomplishment becomes even more remarkable due to the fact that it is predominantly generating this revenue through one-time purchases, which is typically a characteristic of mobile gaming rather than social media platforms. This differentiation further highlights TikTok’s unique position and success in the industry.

App Store revenue - Top App Company sales category
App Store revenue – Top App Company sales category – Source:

In the system of non-gaming apps, subscription-based revenue models typically dominate. However, TikTok has achieved a remarkable feat by cultivating a dedicated fan base that willingly engages in one-time purchases, such as buying gifts for their favorite content creators.

What’s even more impressive is that TikTok stands out as the sole non-gaming app among the top 10 revenue-generating apps in the US, surpassing popular titles like Candy Crush Saga and Roblox. Read more below;

What is Key Factor to Succeed in Mobile Monetization?

To succeed in mobile monetization, striking the right balance between features and prices is crucial.

Hinge, a widely used dating app, experienced a remarkable revenue growth of nearly 60% year-over-year in the US during 2022. It achieved this by adapting its monetization strategy to accommodate various user preferences and price ranges.

One successful addition was the Roses feature, which users could purchase as a one-time option. This feature gained immense popularity and contributed to over one-third of Hinge’s revenue in the US on iOS by the first quarter of 2023.

Additionally, Hinge introduced a subscription option priced at $60 per month earlier this year. Furthermore, the app made adjustments to its most popular subscription plan, increasing its price from $20 to $30.

United States iPhone in-App Purchase chart
United States iPhone in-App Purchase Chart – Source:

When it comes to price sensitivity, in-app purchases falling within the range of $10 to $100 have emerged as the preferred choice among non-gaming apps in the US. These purchases constitute over 70% of all non-gaming in-app transactions in the first quarter of 2023.

In the realm of mobile gaming, mid-tier in-app purchases spanning from $10 to $99 are not as popular. Here, consumers tend to either opt for numerous low-priced items or indulge in high-priced in-app purchases.

However, it is worth noting that games still generate a substantial portion of their revenue from purchases priced above $100.

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US iOS Consumer Spending Share by Price
US iOS Consumer Spending Share by Price

TikTok Exceeds Expectation in Comparison to Its Brand Power and Leading in Monetization

TikTok stands out as one of the top-performing apps in its category, boasting the highest Brand-Relative-App-Growth Ratio (BRAG). Through effective growth strategies, TikTok has exceeded expectations and achieved impressive performance metrics in monetization.

According to recent research by Digital Turbine, TikTok has embraced several strategies to outperform its Brand Power. These include Community Marketing, Product-Led Growth, Advertising Execution, and Device Integration.

Community Marketing focuses on serving a specific community or empowering users within that community to organically promote the app to their networks.

Product-Led Growth leverages the app’s innovative features to attract new audiences, while Advertising Execution ensures consistent advertising experiences that drive growth.

Device Integration involves partnering with device manufacturers to preload the app, making it easily discoverable and accessible for users.

Overall, TikTok’s success in mobile monetization is noteworthy. By tapping into users’ desire for convenience and community, TikTok has effectively implemented one-time purchases, a concept previously associated primarily with mobile gaming.

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