The concept of an app for a mobile phone was completely foreign. But as smartphones have become ubiquitous, the app business has boomed into a multi-billion-dollar industry, with hundreds of thousands of products and millions of daily consumers. Given the nature of mobile apps, this young industry remains very fragmented; there are a few large players who have experienced multiple successes, and some of the most popular products have been launched by relative unknowns on a shoestring budget.
1. Charge Per Download :
At the risk of sounding incredibly obvious, one of the easiest ways to make money from an app you create is to charge each time someone wants to download it. By now it’s no secret that there is big money to be made on app downloads. Earlier this year, Gartner projected that app sales in 2013 would reach $25 billion. And Apple has now paid out more than $10 billion to app developers. According to a report by Distimo, as recently as November 2012, Apple’s App Store was bringing in $15 million per day in revenue, while Google Play brought in daily revenue of $3.5 million.
Of course, it’s tough to convince customers that they need to fork over money to buy your app–especially when there are so many out there that are completely free. This monetization method requires great planning, execution, and (most importantly) marketing.
For much more information on pricing and executing paid apps, jump to our further reading section.
See also: How to Better Monetize Your Mobile Traffic
2. Create a “Freemium” App :
In most app stores, products are listed as either “paid” or “free”. In reality, however, there’s a third category that lies somewhere in between and includes some of the most profitable of all apps. Many apps are free to download, but require an upgrade (i.e., payment) to unlock the full features, accelerate the progress of a game, or turn off ads.
In general, less than 5% of an app’s audience will ever pay special features or upgrade to a paid version of the app. So commercial success with this model requires a fairly large audience, especially since the prices charged for in-app purchases are often relatively small (usually under $5).
3. Advertising :
Another primary app monetization technique involves showing advertisements to users of the app. While rates for mobile ad inventory are generally much lower than traditional online placements, there’s still a major opportunity here for apps that generate a significant number of pageviews or offer access to an attractive and targeted audience.
There are several different implementations of ads on mobile devices, but they generally fall into one of two categories:
Banner: A banner ad served on a mobile app works just as banners function online.
Interstitial: This term is generally used to describe an ad that takes up the entire screen (as opposed to a banner that appears alongside the app’s content).
4. Find a Sponsor :
Many non-game apps don’t lend themselves well to the freemium model, and are instead better suited to be monetized through ads. If you elect to give your app away for free, there is still a major monetization opportunity; you’ll be relying on your users to engage with the ads that are served to them to drive revenue.
The most predictable mobile advertising earnings will generally come from an exclusive sponsor–an advertiser who wants their messaging to be displayed whenever someone uses your app.
5. Partner With Mobile Ad Network :
One of the most obvious ways to make money from your app involves including ads within the product. While the most lucrative way to sell ad space involves direct sponsorship deals with advertisers, many app-makers don’t have the connections or time to set up those types of arrangements (at least not initially). A more immediate and less involved route involves partnering with an ad network who will sell your ad inventory for you and take a portion of the total revenue in exchange for their services.
6. Promotion Services :
There will generally be a strong correlation between your app’s popularity and the revenue you earn. Regardless of the exact method or methods you choose to monetize your app, more downloads will most likely equate to more traffic.
If you don’t have the backing of a huge company and distribution behind you, odds are your marketing campaign will rely on word-of-mouth and grassroots promotion efforts. Several companies have popped up to effectively act as hired guns for app makers seeking attention; for a fee, they’ll promote your app, get it a few reviews, and theoretically start it off with a decent bump up the charts.
We’re generally skeptical of the ability of these promotional companies to actually drive qualified downloads; they often farm out download and review tasks to overseas teams. The most valuable attention your app can get will be organically generated, and there are a number of effective promotional tasks you can do on your own (more on this below). But if you have the budget and are interested in getting some additional momentum behind your app.
7. Split Testing Tools :
Mobile app makers regularly utilize split testing throughout the production and marketing process, allowing users to tell them the optimal settings for some of the variables that are a part of this process.
8. Newsletters, Tools, Forums, and Free Memberships :
There are a number of great free and paid resources out there for app developers and marketers; check out these publications and memberships for ongoing support and assistance during the app
9. Network Reviews and Mobile App Advertising :
Above we highlighted some of the networks available to app-makers looking to generate money via display advertising. But that’s really only the tip of the iceberg; there are so many different networks that cater to mobile apps (and mobile web traffic).
10. Free to Play Apps :
There are various ways to set up “freemium” apps, and several important decisions to be made in order to properly incentivize (without overly frustrating) your users to fork over a few extra dollars to get through a level. It helps, of course, if the app you create is particularly addictive; power users are more likely to spend to continue their progress or improve the experience.
1. Charge Per Download :
At the risk of sounding incredibly obvious, one of the easiest ways to make money from an app you create is to charge each time someone wants to download it. By now it’s no secret that there is big money to be made on app downloads. Earlier this year, Gartner projected that app sales in 2013 would reach $25 billion. And Apple has now paid out more than $10 billion to app developers. According to a report by Distimo, as recently as November 2012, Apple’s App Store was bringing in $15 million per day in revenue, while Google Play brought in daily revenue of $3.5 million.
Of course, it’s tough to convince customers that they need to fork over money to buy your app–especially when there are so many out there that are completely free. This monetization method requires great planning, execution, and (most importantly) marketing.
For much more information on pricing and executing paid apps, jump to our further reading section.
See also: How to Better Monetize Your Mobile Traffic
2. Create a “Freemium” App :
In most app stores, products are listed as either “paid” or “free”. In reality, however, there’s a third category that lies somewhere in between and includes some of the most profitable of all apps. Many apps are free to download, but require an upgrade (i.e., payment) to unlock the full features, accelerate the progress of a game, or turn off ads.
In general, less than 5% of an app’s audience will ever pay special features or upgrade to a paid version of the app. So commercial success with this model requires a fairly large audience, especially since the prices charged for in-app purchases are often relatively small (usually under $5).
3. Advertising :
Another primary app monetization technique involves showing advertisements to users of the app. While rates for mobile ad inventory are generally much lower than traditional online placements, there’s still a major opportunity here for apps that generate a significant number of pageviews or offer access to an attractive and targeted audience.
There are several different implementations of ads on mobile devices, but they generally fall into one of two categories:
Banner: A banner ad served on a mobile app works just as banners function online.
Interstitial: This term is generally used to describe an ad that takes up the entire screen (as opposed to a banner that appears alongside the app’s content).
4. Find a Sponsor :
Many non-game apps don’t lend themselves well to the freemium model, and are instead better suited to be monetized through ads. If you elect to give your app away for free, there is still a major monetization opportunity; you’ll be relying on your users to engage with the ads that are served to them to drive revenue.
The most predictable mobile advertising earnings will generally come from an exclusive sponsor–an advertiser who wants their messaging to be displayed whenever someone uses your app.
5. Partner With Mobile Ad Network :
One of the most obvious ways to make money from your app involves including ads within the product. While the most lucrative way to sell ad space involves direct sponsorship deals with advertisers, many app-makers don’t have the connections or time to set up those types of arrangements (at least not initially). A more immediate and less involved route involves partnering with an ad network who will sell your ad inventory for you and take a portion of the total revenue in exchange for their services.
6. Promotion Services :
There will generally be a strong correlation between your app’s popularity and the revenue you earn. Regardless of the exact method or methods you choose to monetize your app, more downloads will most likely equate to more traffic.
If you don’t have the backing of a huge company and distribution behind you, odds are your marketing campaign will rely on word-of-mouth and grassroots promotion efforts. Several companies have popped up to effectively act as hired guns for app makers seeking attention; for a fee, they’ll promote your app, get it a few reviews, and theoretically start it off with a decent bump up the charts.
We’re generally skeptical of the ability of these promotional companies to actually drive qualified downloads; they often farm out download and review tasks to overseas teams. The most valuable attention your app can get will be organically generated, and there are a number of effective promotional tasks you can do on your own (more on this below). But if you have the budget and are interested in getting some additional momentum behind your app.
7. Split Testing Tools :
Mobile app makers regularly utilize split testing throughout the production and marketing process, allowing users to tell them the optimal settings for some of the variables that are a part of this process.
8. Newsletters, Tools, Forums, and Free Memberships :
There are a number of great free and paid resources out there for app developers and marketers; check out these publications and memberships for ongoing support and assistance during the app
9. Network Reviews and Mobile App Advertising :
Above we highlighted some of the networks available to app-makers looking to generate money via display advertising. But that’s really only the tip of the iceberg; there are so many different networks that cater to mobile apps (and mobile web traffic).
10. Free to Play Apps :
There are various ways to set up “freemium” apps, and several important decisions to be made in order to properly incentivize (without overly frustrating) your users to fork over a few extra dollars to get through a level. It helps, of course, if the app you create is particularly addictive; power users are more likely to spend to continue their progress or improve the experience.
As the competition has increased over the past few years, making and launching a profitable app has become a challenging pursuit. But the opportunity in this industry remains massive, as the countless success stories illustrate. There are several attractive monetization routes, an abundance of free resources to make the process easier, and endless case studies and pieces of advice available online. If you’re in the process of turning your app from a clever idea to a profitable reality, take advantage of every available resource!
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