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March 4, 2024

| 8 mins read

How Augmented Reality SDKs Offer Monetization Options For Mobile Apps

How Augmented Reality SDKs Offer Monetization Options For Mobile Apps

So, you’ve come up with a game-changing solution with your proprietary mobile SDK? Congratulations! However, this is just the beginning.

Capturing user attention and turning it into meaningful revenue is a constant battle for brands in today’s hyper-connected economy. Traditional monetization methods, including banner ads, are losing their punch, with users developing banner blindness and growing resistant to intrusive advertising.

But what if you could deliver immersive experiences that not only grab user attention but also unlock innovative revenue-growth opportunities?

This is where Web augmented reality platform development kits (SDK) enter the picture.  These pre-built toolkits equip mobile app developers with the essential building blocks to integrate AR features into their apps.  For brands, AR SDKs open the doors to a treasure trove of monetization opportunities, allowing you to weave your brand message into the user experience seamlessly.

That being said, do you have any idea how to generate revenue using augmented reality SDK for mobile apps? If not, this article will walk you through various ways of making money through AR mobile app development.

For Starters, Let’s Understand Augmented Reality SDKs

An AR SDK is a toolkit that enables app developers to create and infuse augmented reality experiences—overlaying virtual elements onto the physical world—into mobile applications. Simply put, AR mobile app developers don’t have to code from scratch.

These mobile SDK kits include frameworks, libraries, application programming interfaces (API), and complex algorithms that help integrate AR features into apps. They handle critical components, such as image tracking, plane detection, motion tracking, and 3D object tracking, essential to building AR experiences as realistic and immersive as possible.

But why turn to AR Application SDKs? Consider these benefits:

  • Simplified AR integration: AR SDKs offer a user-friendly development environment with tools and documentation, making it easier for developers, even those without extensive AR expertise, to add AR elements.
  • Faster development time: AR SDKs provide pre-built functionalities designed to speed up mobile app development. Instead of starting from scratch when creating AR features, developers can leverage modules and tools provided by a mobile SDK, considerably shortening the time to market.
  • Cost-effective: Engineering AR capabilities from the beginning require tremendous resources. An augmented reality SDK provides access to sophisticated features without needing to incur custom development costs.
  • Tried-and-tested: AR SDKs contain tested libraries and tools that ensure the AR features will be robust, reliable, and less prone to bugs than ever.
  • Customizable features: AR SDKs provide out-of-the-box solutions but still allow plenty of scope for customization. That way, you can build diverse, immersive experiences in mobile AR apps tailored to your brand requirements and image, from virtual try-ons and product visualization to educational tutorials and interactive marketing campaigns.
  • Cross-platform compatibility: Many AR mobile SDKs allow brands to develop AR experiences that play nicely with various mobile operating systems (OS), mainly Android and iOS.

App Monetization Strategies with Augmented Reality SDKs

Monetizing AR in mobile apps is challenging, as users may not be willing to pay upfront or subscribe to unlock AR features. Nonetheless, you can implement the following strategies to generate revenue from AR SDKs for mobile applications.

In-App Advertising

In-app advertising is the most applied app monetization model that comes to everyone’s mind. Even numbers cement the statement: in-app advertising clocked US$ 171.8 Bn in 2023, which will cross US$ 400 Bn by 2023. Additionally, in-app advertising boosts user retention by 4X.

The in-app advertising model displays ads within a mobile AR app to generate revenue. Brands place ads strategically within the application, and then they can mint money based on user interactions and impressions—click-through rate (CTR).

In-app advertising doesn’t require direct payment from users. Instead, you can monetize their eyeballs while offering your AR mobile app for free.  For higher earnings, you must ensure that interactive ads are relevant, non-invasive, and don’t ruin user experience.

In-app advertising benefits both developers and advertisers. First, developers can offer the app at a lower cost or completely free to increase the user base. In return, they can collaborate with other brands to broaden their user base for product marketing.

In-app advertising contains the following categories:

Native Ads

AR-enabled native ads blend augmented reality with traditional in-app advertising. They integrate seamlessly into the host mobile AR app, appearing as just another feed or content. Users could tap on an ad for a product, thinking it’s part of the regular content. Then, the ad redirects them to that product, where they can virtually try it on.

This interactive format creates a more engaging ad experience, potentially resulting in higher click-through rates and conversions for brands. In fact, native in-app ads get thrice as much attention as display ads.

Interstitial Ads

AR-enabled interstitial ads are a new twist on traditional app interruptions. Unlike intrusive banner ads with size restrictions, AR interstitial ads cover the entire mobile screen and pop up at natural transition points within the user flow.

For example, suppose a makeup brand is showcasing its lipstick shades through an AR ad. Users tap on the ad, and their phone’s camera gets activated. Then, they point their camera at their faces and see a virtual 3D model of the lipstick shade, allowing them to test how it looks on them virtually.

Commoditizing AR Filters

With this approach, you can sell augmented reality filters as goods. There are multiple ways you can go about it.

  • Premium filter packs:  Develop a library of high-quality, themed AR filters.  These could be seasonal filters like festive snowflakes or spooky ghosts, filters tied to popular events like the IPL, or filter collections designed for specific demographics like "wedding party essentials."  Users can then buy individual filters or bundled packs to enhance their AR experiences and personalize their content.
  • In-App filter marketplace: For a broader reach, create a marketplace within your app where independent creators can sell their custom AR filters.  You curate the content, ensuring quality while earning a commission on each sale. This promotes a vibrant community, attracting users with a broader variety of creative options.
  • Customizable filters:  Let users personalize pre-made filters by adding their own text, images, or animations. Charge a premium for these customization options, catering to users who want a truly unique AR experience. For a few dollars, people can share pictures of their birthdays, weddings, and other similar occasions, customized with unique filters.

Must Read:

A Swift Guide on AR Filters

Freemium Model

If you don’t want to charge users for every AR mobile app download yet want to mint a profit without ads, the freemium model is an excellent option. An augmented reality SDK can be what you need to add enough extra value that purchasing advanced features becomes exciting.

So, how does the model work? First, users download your application for free. Then, they get access to essential AR-enabled content for a limited time, or unless they upgrade to the paid version.

This “free trial” approach helps tap into a massive user base, a fraction of which converts to paying customers enjoying the full AR experience. According to a survey, 4 out of 5 top-grossing social media apps on the Apple App Store launched a Freemium model.

However, there’s a caveat: brands must find a balance between their free and premium AR features so that users can keep getting quality content and the best shopping experience.

Case in point, a beauty brand would limit basic virtual try-on features on its mobile AR app for free users. Likewise, a jewelry retailer may lock advanced AR features, including AI-based personalized recommendations or 360-degree product view, in its e-commerce app’s paid plan.

Follow these best practices to optimize your freemium model:

  • Offer value through the free version first before upselling.
  • Ensure the free trial matches user expectations.
  • Include certain AR aspects, not the entire feature set. For instance, limit the daily number of virtual product try-ons.
  • Remind users of paid features at points of restriction.
  • Offer time-limited, fully unlocked experiences to hook users.

Freemium requires careful execution, but when done right, it helps maximize both user base and revenue.

Virtual Try-Ons You Need to Check Out NOW!

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E-commerce Integration

AR SDKs offer a lucrative avenue for brands to integrate their e-commerce stores directly within the AR experience. This feature lets shoppers purchase products they see on their device’s screen in just a few clicks.

One of the most effective ways to implement it is to turn real-life products into AR filters. For instance, you can build realistic representations of makeup items, jewelry designs, or eyeglasses and upload them to your app using an augmented reality SDK. Shoppers can try them on and seamlessly buy the chosen product they're virtually interacting with.  This one-click functionality removes friction from the buying journey and shortens the path to purchase.

Furthermore, AR SDKs help personalize the e-commerce experience.  For instance, an augmented reality mobile app might recommend complementary items based on the virtual product the shopper is exploring. This targeted product placement helps increase basket size and revenue.

Must Read:

Augmented Reality in E-commerce: Revolutionizing Online Shopping Instantly

Things to Consider While Choosing the Right App Monetization Model

When looking for the ideal app monetization method, consider the following factors:

What Does the AR App Do?

Determine your app’s function and purpose—what problem does it solve, and how does it solve it? If it provides core functionality or addresses a specific issue, users will likely pay a premium upfront or subscribe for ongoing access.

Besides, figure out whether your AR mobile app features offer clear value beyond the core functionality. For instance, can you offer additional AR objects, customization options, or access to exclusive content through in-app purchases?

Who Is the Target Audience?

Consider the age group and income level of your target audience. For example, AR filters for cosmetic products are more suitable for a younger audience, while in-app purchases for premium features might work better for professionals.

In addition, analyze how users interact with your mobile AR app. If engagement is high and users spend significant time within the app, then in-app purchases are a viable option. For more casual users, ad-supported models could be more suitable.

Who Is the Competition?

Research how similar AR mobile apps in your industry generate revenue. Are they using freemium models with in-app purchases or a combination? Understanding competitor strategies provides valuable insights.

Is the Monetization Approach Effective Enough?

Monitor how users interact with your augmented reality mobile app's monetization features. This data will help you refine your strategy, optimize pricing, and identify areas for improvement. Moreover, experiment with various monetization models or pricing structures. A/B testing lets you see which approach resonates best with your audience and maximizes your revenue potential.

Take The Leap: Start Monetizing AR Mobile Apps Today

So, there you go! The top mobile app monetization strategies using augmented reality SDK.

AR SDKs offer brands a robust way to transform their mobile app experiences into revenue-generating machines. From in-app ads to selling AR filters as commodities and freemium models, they help turn app users into brand advocates and generate a positive ROI.

That said, the ideal strategy for an app developer will ultimately depend on several critical factors, including the app's purpose and target audience. Moreover, you need to weave the strategy carefully into the AR mobile app experience so that it incentivizes instead of turning off users.

With a diligent mindset, you can create win-win value for both your brand and your users. App monetization with AR SDKs done right delivers benefits all around.

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