How to Get Revenue From Mobile Apps

app revenue

Get revenue from application

Every application starts with an idea which is actually a way how an app can become useful for a certain audience, make their life easier, and, therefore, bring success to its developer (startup owner). But if so many apps are free to download, how do they bring revenue? How can an app become profitable? Let’s look closer into the topic and analyze the details.

How do apps make money

To make sure you get enough revenue from the application, start from choosing the right monetization strategy. These are the most popular ways of monetization:

1. Advertisement

If you are still wondering “how do free apps make money”, this option will tell you a lot. Simple as it is, all you need to do is to inject ads into your application. This could be both simple static images and interactive media like shorts videos. It is probably the most common way to earn money from an application.

Pros:

  • It is worth noting that this strategy will be effective only if targeted advertising is shown;
  • Free mobile applications can often attract a certain audience quickly.

Cons:

  • Remember that adding ads to the application, you might drive users away if you add too much advertisement which interrupts user experience. Constant advertising will annoy them, so do not try to earn as much money as you can from this way of monetization;
  • There is another problem – it is impossible to get revenue from advertising if a user can’t see it or doesn’t click on the link (in the case of installed ad blocker).

2. In-app purchases

Another option to make money off an app is in-app purchases. Nothing new, you can sell real goods like furniture, clothes or something else, and you can sell some virtual stuff like coins, emoticons, power-ups of even articles, statistics, and research.

Pros:

  • As mentioned above – the in-app purchase is an excellent and modern way of selling not only real but also virtual goods or services with minimal risk. Both for seller and buyer;
  • Adding the opportunity to purchase products within the application can increase the degree of customer loyalty;
  • This option can bring a really big profit since you don’t need to pay the rent, bills and other side costs (in the case of opening a real store). It is optimal and flexible for e-commerce solutions.
  • Cons:

    • Official app stores keep some percentage of virtual goods sales. This rule does not apply for real products;
    • You need to specify many details about the product, making its purchase more transparent, for better user protection.

    3. Commercial apps

A slightly different approach is to make a paid application. Keep in mind that when selecting this method, you should pay attention to researching your target audience to understand whether they are likely to buy your application (so there are more paid iOS apps than Android ones).

Pros:

  • Receiving funds from each purchase;
  • High rates of application launching and actions within it;
  • Users don’t get distracted by adds and other offers therefore you get more loyalty;
  • Funds and motivation for the further evolvement and development of the application.

Cons:

  • Extremely high competition, so it’s hard to bring your product to the top and sell it;
  • It is worth remembering that often in paid applications do not embed advertising. Advertising in paid applications leads to the fact that users cease to use the application and leave bad reviews, which negatively affects the ranking and brand.

4. Subscription

Or in other words – try before you buy. Sometimes it’s the perfect way to attract new audience or to make your application profitable – the subscription. In this case, you make the app with some free content and with some “premium” paid content, so your customers could try almost all features of the product before buying it.

Pros:

  • Additional motivation for app development, provision of cutting-edge technologies and trend content;
  • This business model stands out from all the rest with its stable fund’s remittance.

Cons:

  • Such monetization model can be applied to a limited list of applications, so it is difficult to integrate.

5. Freemium

Similar to the above-mentioned option, but in this case, you might develop an application with a few of free features and propose “premium” functions for money – which is a nice idea.

Pros:

  • Unlike many others, this model can be built into almost any application and also allows to use advertising;
  • It is more likely to build a broad user base in a short time, who can become loyal users after trying it out.

Cons:

  • There are 2 cons that flow one from another, that’s why it’s important to find a balance here. This refers to the number of free built-in functions – if it’s number is small, users will leave the application, if large – they will not buy paid functions.

6. Sponsorship

You can make an application which offers different activities or challenges to users, and in turn, they will be credited with points, discounts or funds. A well-known brand or company may act as a sponsor – so will provide your clients with remuneration for performing different tasks. And you will be charged a small percentage for providing services.

Pros:

  • The use of such a model is very beneficial for developers – they can make a profit, for sponsors – they get a new audience and an opportunity to declare themselves, and users – they get bonuses. And the user who receives bonuses will be loyal;
  • Also, this model can be integrated into a large number of applications of different topics and fields of use.

Cons:

  • To implement this model, you might need an experienced marketing and sales specialist, who can calculate the risks and convince sponsors of the need for cooperation.

Making money off apps

But the main thing that should be remembered when thinking about making money off apps, is that the choice of the method should be realized and implemented before the immediate development of the application.

Some monetization approaches are suitable for almost any application, while some could alienate a potential customer – for example, advertising in a paid application. On the other hand, some of the methods can be combined – like showing an advertising message after the user completes a certain action. The important part is to find the right balance between a fast earning and a quick attraction of new users.

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