How TikTok is Shaking Up Mobile Monetization

Popular video-sharing app TikTok is revolutionizing the mobile monetization landscape, redefining what’s possible within the realm.

In the first quarter of 2023, the short-form video hosting service became the first app to break $1 billion in consumer spending in a single quarter, according to data from app analytics platform Data.ai.

While this achievement is already impressive enough, what further helps TikTok stand out is the fact that it’s primarily driving this revenue from one-time purchases — something that’s traditionally associated with mobile gaming, not social media.

Non-gaming apps almost always make most of their revenue from subscriptions. However, TikTok has managed to build a loyal fan base that’s more than happy to make one-time purchases for things like gifts for their favorite creators.

Furthermore, it’s the only non-gaming app among the top 10 by one-time purchase revenue in the US, outperforming titles like Candy Crush Saga and Roblox.

What is Key to Success in Mobile Monetization?

The key to success in mobile monetization is finding the right balance between features and prices.

Hinge, the popular dating app, achieved nearly 60% YoY revenue growth in the US in 2022 by adapting its monetization strategy to cater to a range of preferences and price points.

It added a Roses feature as a one-time purchase option, which proved incredibly popular, accounting for over a third of Hinge’s revenue in the US on iOS by Q1 2023.

It also rolled out a $60 per month subscription option earlier this year, as well as tweaking its most popular subscription option to increase its price from $20 to $30.

In terms of price sensitivity, in-app purchases priced between $10 and $100 have been the most popular among non-gaming apps in the US, accounting for over 70% of non-gaming in-app purchases in Q1 2023.

Mid-tier in-app purchases ($10 – $99) are less popular in mobile game purchases, as consumers are more likely to buy many low-priced items or splurge on high-priced in-app purchases.

However, games still generate a significant portion of their revenue from purchases priced at more than $100.

TikTok Overperforms in Comparison to Its Brand Power

TikTok is among the best-performing apps in its category with the highest Brand-Relative-App-Growth Ratio (BRAG).

It has overperformed in comparison to its Brand Power, attaining impressive performance metrics with the help of some effective growth strategies.

Strategies that TikTok has internalized to punch above its weight include Community Marketing, Product-Led Growth, Advertising Execution, and Device Integration, Digital Turbine said in a recent research.

Community Marketing focuses on catering to a niche community or enabling users in that community to amplify and promote the app to their networks organically.

Product-Led Growth banks on the innovation and features of the app to attract new audiences, while Advertising Execution relies on creating consistent advertising experiences that lead to growth.

Meanwhile, Device Integration involves partnerships with device manufacturers, allowing pre-loading of the app to make it easy for users to discover and use the app.

All in all, TikTok’s success in mobile monetization has been remarkable. By appealing to users’ desire for convenience and community, TikTok has managed to make one-time purchases work in a way that’s previously been the preserve of mobile gaming.

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