Decoding the strategy in how to monetize mHealth Apps
“Health is Wealth.” A very old and popular saying that we have all grown up hearing. It essentially relates to the idea that good health (mental and physical) is what real wealth is. Interestingly, the saying is true in business parlance as well especially when we speak of health based mobile applications (mHealth apps). If we look into the strategy behind how mobile applications monetize and earn revenue, it’s curious how healthcare and wellness apps in majority are the gainers. From apps on measuring heartbeat and sleep patterns, to apps on physical exercises like yoga and HIIT, to apps on mediation and mindfulness, the gamut of healthcare apps is increasing steadfast, worldwide.
According to Statista, the estimated value of the global mobile healthcare market in 2019 was US$ 37bn. According to another research by Accenture in 2018, 75% of US consumers surveyed said technology is important in managing their health. The research also mentioned the increased importance in virtual care, robotics, and products backed by Artificial Intelligence. For instance, the role of AI based Precision Algorithms in Healthcare, especially for complex illnesses, is already noticeable worldwide and there’s indication of grander innovations to occur in the time to come.
What is mHealth and why is it important?
Mobile health or ‘mHealth’ refers to the use of applications in mobile phones, tablets, personal digital assistants, or wearable devices for achieving health goals. Today, mHealth applications are popularly used for education and in creating awareness, diagnostic and treatment support, remote data collection, remote monitoring, and chronic disease management.
With the COVID-19 situation, there is greater awareness and need for shifting to digital platforms, rejecting physical contact. Patients, healthcare practitioners and people in general are increasingly looking at monitoring their health with remote applications. This creates a business opportunity. Mobile app developers as such have to plan and adopt a proper app monetization model for mHealth platforms considering the competition at bay.
Today, nearly 28% of the market is taken up by digital healthcare players such as mHealth application development companies and aggregators, though only about 4% of the top app publishers exceed the 1 million mark in annual app downloads. (Source: Research2Guidance)
Creating and Monetizing Health Apps: What to keep in mind
The market, the consumer and the related product. When building any application, it is imperative to understand how these three co-exist and operate, so as to churn sales and revenue. Let’s take a closer look at them.
1. The Market
The market relates to the market size, geography and competition. In 2019, there were more than 318,000 mHealth apps, nearly twice the number that was present in 2015 (Source: Original report by IQVIA and as availed on Liquid-State). The popularity of health mobile apps and telemedicine has risen phenomenally in the last few months. Fitness trackers and wearable devices are reshaping health care by empowering users with data to track and monitor their health goals. The mHealth solutions market moreover is expected to touch US$ 213.6 bn by 2025, triggered by the use of smartphones, availability of phone internet data, rise in connected devices etc. (Source: MarketsAndMarkets).
2. The Consumer
We are looking at a consumer base that is aware, informed and keen to adapt. Technology is no longer perceived as a foe, but rather like a friend. Not just patients, but even doctors, hospitals and insurance companies are turning to digital healthcare devices for efficiency, better data management, accessibility and solutions.
3. The Product/mHealth App
The trend in adoption and usage of mobile health applications show that mHealth apps are being considered for wellness, monitoring and tracking, recording data, health care promotion, real-time communication with healthcare providers, remote patient monitoring, improving quality of life for health practitioners, discovery platforms and other tasks of similar nature.
Strategy and Roadmap: How to monetize mHealth applications?
App monetization has never been easy. Consumers want more and competitors are around the corner. There’s also the question and trend of free apps making more money.
In general, when it comes to the question of value and revenue earned from mobile based health apps, here are some key takeaways:
- Not all apps published are able to create wealth. In order to make profits, the strategy lies in diversifying the portfolio and offering apps with niche/specific services to cater to a target audience
- It is unlikely that an app will start generating revenue instantly. Patience, smart promotions, and strategic reach is the key. A standard period of 3-5 years in the right market is likely to deliver results
- Consumer geography and mobile platforms are co-related. mHealth app developers are likely to benefit more by building native iOS and Android platform apps based on the audience and markets in question
- Another noticeable trend in mHealth apps in 2020 is that app instals do not guarantee revenue. While the metric can be leveraged to drive revenue, instals denote engagement and popularity
- Cognitive technologies, mainly Artificial Intelligence (AI), Machine Learning and RPA enable health apps are in trend. AI apps offer personalization, that adds value to users
On that note, here’s a quick look at the top app monetization strategies that are being used to create value, sales and revenue:
- Registration Fee and Subscription Model
Registration and subscription fees are one of the most common ways of making money from apps. It works best for aggregators where medical practitioners, wellness experts, hospitals etc. can pay and register for users to find them. Similarly, users may also have to pay a minimum subscription fee to avail the details.
- Avail Premium Content + Freemium
Derived as the combination of the words ‘free’ and ‘premium’, the Freemium model is one of the most popular app monetization strategies. If functions on the premise of adding value to users. Users get to download the app for free, use a trial version and then upgrade. This is perceived as fair, as users have an idea of what’s on offer and what they are paying for.
The meditation app SOS Method for instance offers users a 7-14 days trial on all content. After the trial period is over, users can upgrade and take a subscription to access all premium content.
- In-App Purchases and Merchandising Model
This model works best for health apps that have gamification attached to it, where users can buy credits to power-up or get extra lives. This also extends to paying upfront (i.e. through the app) for an appointment or consultation etc.
In this respect of monetizing app revenues, merchandising is another option that apps can consider. The app can act as a marketplace for selling home-owned or external brand products (related) to their users. For instance, in India, the Cure.Fit app sells their home merchandise (sports shoes, tees, track pants etc.) on their app.
- In-App Ads
One of the most popular ways of making money on the app, the in-app ads model allows apps to allow external brands to advertise on their apps for a fee. Similar to television and radio advertisements, brands can pay app companies to have their products/service ads displayed.
As a top mobile app development company, we believe that this has to be done in style. While ads help to make money, it should not be intrusive or affect engagement. This is where a great UI/UX design comes into the picture, that ensures that the ad is strategically placed so as to be visible, while not hindering app usage.
Key Takeaways for business leaders:
How mHealth App publishers are monetizing and making profits? This does not have a simple, straight-forward answer, as the options are many. Most app developers usually do not go for a single strategy but a combination of multiple ideas so as to make the most of the opportunity. There is also the cost of building the application that has to be taken into account when calculating profits.
At Day One Technologies when it comes to building a mHealth app, we recommend a contemporary, AI driven, design based approach. Artificial Intelligence is the future and an app powered by the technology can only reap its benefits. From gathering real-time data, to providing insights, triggering alerts and more, there’s a lot that AI brings to the table.
As a leading AI startup company, we have the tools and technology stack in place to get you started in your AI-health-app journey. The demand for mHealth apps is already on the rise, and there wouldn’t be a better time to leverage and act upon it. To discuss more or know about our services, get in touch.