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How Mobile Apps Make Money

How Mobile Apps Make Money

. 4 min read

Over the past decade, developing mobile apps have been the next best thing in the tech world. Mobile apps have some differences depending on the operating system of the smartphone. The major operating systems used by smartphones are Android, iOS, and Windows. Developing a mobile app compatible with these operating systems can turn you to a millionaire in no time.

But, it is not about developing the app, but knowing how to monetise it that matters. This is the reason, so many incredible mobile apps developed in recent times turned out to be an epic failure. It doesn’t matter whether you are an expert Android app developer or an iPhone app developer, understanding the business side of this profitable venture is paramount.

We shall discuss, in this article, a few ways through which mobile apps make money and possibly fetch the creators thousand and millions of dollars.

Strategies of Monetising Mobile Apps

Before considering any of the strategies that we will mention below, the first thing to pay attention to should be your customer base. Your app should be one that many users will appreciate. You can tell you have an enormous customer base by the demand for the app and the number of downloads.

If you feel convinced, as a creator, that you have a broad user base, then you are ready to know the various strategies mobile apps can make money and bag a few or a couple of more for yourself. Below is a list of proven strategic ways mobile apps make money.

Advertising

Whether the app is free or paid, the most profitable means mobile apps generate income is through advertising. It can be annoying if you are at the user end of the application, especially if the ad keeps popping up now and then.

Basically, the Android app developer or iPhone app developer provides ways for other networks or platforms to advertise their content inside the app, and they pay the developer for space. The networks or platforms pay the developer in two major ways: They can pay the developer anytime the ad pops up or anytime a user installs their content.

There are different means a developer can feature ads in their mobile app. They are interstitial, display ads, in-app video ads, and native ads. Advertising is very effective if the app in question is a game app. This is because the ads can be included in reward, bonus, and level up options.

Subscription

This is another proven means by which mobile apps make money. This is a strategy highly recommended for free mobile apps, although paid apps use it, but rarely. This strategy allows users to have a limited feature of the app and require a subscription fee before the full features can be unlocked.

Another way this strategy can be done is to use a free trial period (usually 3, 7, 14, 30 days, etc.). Once the free trial period is complete, the user will then choose to subscribe to the full package.

This is a very useful strategy if the content of the app is rich and valuable. This is so that users will not need to have second thoughts about subscribing to the mobile app. An excellent example of a mobile app that maximises this strategy is Netflix. Netflix is a movie and video streaming platform that is very rich in content. After a 30-day free trial period, users most of the time will want to subscribe so they can continue enjoying the fantastic services it provides. Other audio and video streaming services use this strategy, too.

Freemium

This method by which mobile apps make money has been tested and approved by several apps. This strategy is used by top mobile app platforms, especially language platforms. It is similar to the subscription strategy, but this one attracts many users.

In freemium strategy, the app developer puts up a free version of the app but limits the features and functionality but creates another version of the same app as a paid app. This version would contain more advanced features than the free version. So, if a user downloads the free app and likes the contents, he/she may decide to upgrade to the paid version.

The upgrade option is optional compared to the subscription strategy. This means that the user can still maximise incredible features using the free app. The only difference is that the paid version is an advanced tool that has added features. As stated earlier, most language tutoring apps make use of this strategy to attract a large number of users.

Purchases and Merchandise

If the mobile app was designed for product and merchandise sales, then you are almost guaranteed that the app would make you some good cash. This strategy has become popular in recent times and used by several platforms.

In this strategy, the developer allows users to display their products and merchandise on the app for other users to purchase. Whenever a purchase is made, there is an allocated percentage reserved for the developers. So, to generate more revenue, there need to be more sales.

It is advisable to open up the app to users who sell products in high demand. This is so that sales will occur faster and money will come in faster too. Amazon is a typical example of a platform that uses this strategy. Millions of users display and sell their products on the app and allocate a certain percentage of returns to Amazon.

Affiliate Marketing

Affiliate marketing is a process by which an app developer promotes another business on his/her app and earns money through referral. This is one of the most commonly used strategies. Just like using an advertising strategy, you can feature pop-up ads or banners on your developed app to promote an affiliate network (another company). Amazon is a perfect example of a platform that uses this strategy to great effect.

The mode of referral payment is in several ways. One is a method known as cost per acquisition. This is when you only get paid when a user makes a purchase through the affiliate network through your app link. Other means of earning via referrals include cost per click, cost per view, cost per installation, etc.



Laura

Part of the expertEasy writing team, Laura is from the UK and has a keen interest in Business, interior design and decor, home improvement and thriftiness in all things around the house and garden.

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