App Monetization – How Do Mobile Applications Generate Revenue?

Introduction

The mobile app development industry has massive earning potential. However, all apps don’t earn an equal share of market revenue on Android and iOS. Despite following a similar mobile application development process of making money with Android/iOS apps, all developers do not earn millions from it.

This is causing developers and startups to ask questions like, “How Do You Make Money From An App?” But, before looking for answers, consider this: there are 4.83 million applications available for download on the iOS App Store and Google Play Store. There is fierce competition in the industry for earning money from apps. So, let’s look at what you should think about before embarking on the journey of making money from apps.

Popular Revenue Models

Advertising

When it comes to business with apps, advertising is the easiest to implement and the most common method. When someone asks, “How to make money from apps?” Your first thought might be using ads to monetise apps, which is perfectly fine. An app owner only needs to show commercials within their mobile application or affiliate marketing to earn money from third-party ad networks. Furthermore, advertising is the best way to make money from apps. As an app owner, all you need to do is display your commercials within the application, and you’ll be able to get paid from third-party networks and commercials easily. App owners are typically compensated when users hit an advertisement or install an app via ads.

There are three types of ads app providers use to monetise their apps. However, as an app owner, you must track whether the targeted users find these ads entertaining or if they block them.

• Interstitial advertisements: This app ad consists of a full-screen pop-up that appears at specific times. Users can ignore this advertisement by clicking the close button. An ad may appear when a user completes editing a photo and stores it.

• Banner advertisements: These display ads appear in various sizes on the application screen. They are frequently small and less intrusive, allowing users to use the app without hindrance.

• Video advertisements: In-app video advertisements appear automatically and are typically used to get views in exchange for in-app rewards.

Subscriptions

Are you wondering how to Earn Money From Apps? A subscription strategy is the best and most useful application monetisation strategy. Consider a subscription model if you want to monetise an application without ads. Application publishers can choose to provide free content for a limited time and then charge users a subscription fee to access full content without restrictions. This strategy is frequently employed for online news, video streaming, and cloud services. This format was created to encourage application publishers to list their apps for a monthly rather than a one-time fee.

Selling Products

Another novel idea to Earn Money From Apps is to sell merchandise through your mobile apps. Many e-commerce companies create versions to sell goods such as shoes, shirts, and toys. These products are sold through the app or email marketing. Amazon recently used this model by launching Merch by Amazon. They could communicate with more people at any time and from any location.

Purchases made in-app

If you’re thinking, “How To Monetize Free Apps?” Then, in-app purchases are one of the most effective app monetisation strategies. It’s created directly within mobile applications and is a fairly simple process. They are typically used to gain access to premium content or features. In-app purchases are made available to access advanced features that enable much faster and more empowered user interaction. This model allows you to sell many virtual items from the application. For example, Clash of Clans and Angry Birds have improved their user experience by allowing in-app purchases. Game publishers commonly use this model, owing to the availability of digital currency. Many games offer multiple game currencies.

Sponsorship

Sponsorship is an interesting strategy for app monetisation. If the application publisher develops the right app for an audience and launches it, sponsorship in your apps can be an amazing application monetisation strategy. App publishers, like website publishers, must consider sponsors with the same target audience as the one addressed by the application. Before developing the app, make a list of organisations that could gain from the collaboration.

Marketing by Referral

Earn Money From Apps with referral marketing. It promotes a third-party service or product to maximise revenue opportunities. Depending on the number of installations or clicks, app publishers can sell or promote affiliates’ services or products. Pop-up ads can be used to promote other’s products or services. Publishers use various types of marketing referrals in their development.

• CPA (Cost per action): There are numerous affiliate networks for your mobile app. This model is monetised by promoting other apps and advertising services with pop-ups.

• CPC (cost per click): This revenue model depends on the count of clicks on an ad displayed.

• CPV (cost per view): This model’s charges are based on the count of video views or ad interactions.

Data Collection and Sale

As you may be aware, Apps collect a large amount of user information in user behaviour or app usage. Many researchers in various fields want all of these user behavioural data. It means app publishers can profit handsomely by selling their users’ behaviour information to these researchers. Users’ social media accounts, personal preferences, and email addresses are typically included in the data. This model can benefit you in two ways. You can either monitor what users do and then sell the information to third-party companies or analyse the data for your development.

Upsell for Freemium

Freemium applications are available for free download but include premium features. These premium features are available via in-app purchases. Users download and use the application free of cost in a freemium model. If they like the app, they can purchase the premium version to enjoy the special features. In-app purchases are used to access such features and other app development services. Furthermore, iOS and Android application creation services provide various options for creating applications, and businesses are using these opportunities to attract customers and make money.

Fees for Transactions

Transaction fees are the most effective method to monetise your apps. It’s especially feasible with apps which provide a platform where digital transactions take place regularly. Consider the following scenario: Transaction fees can be charged if your mobile application allows third parties to sell or promote their products or services with online transactions. A lot of money can be made by charging a small fee for all transactions on your app.

Crowdfunding

Crowdfunding, a relatively new monetisation method for free apps, is another option. In this method, businesses and startups share their product on platforms such as Patreon, Fundable, and Chuffed to raise funds for the app’s development and promotion. Non-gaming apps are highly preferred in crowdfunding.

Conclusion

When compared to paid apps, mobile applications have a larger market presence. There are numerous strategies for mobile application monetisation, each with amazing earning potential and a different user engagement rate. We recommend choosing a monetisation model based on your application’s purpose, niche, and target audience. The applications on this list are all free, but they can keep it that way by combining them with other lines of business or revenue streams. The bottom line is that free applications can make money! All the examples listed in this article have conducted extensive research to determine their target audiences. The Best Apps To Make Money can be from any industry – what is important is that the app remains loyal to its core services and products. You don’t have to keep going in circles in response to shifting customer preferences. Rather, invest in software updates, technological advancements, and new product lines—while keeping in mind how your application started.

FAQs

1. Which apps are the most profitable?

The top three application categories that generate the most revenue for their parent company would be music apps, gaming apps, and video streaming apps. All these app categories have a high rate of engagement.

2. How much money does the iOS application store pay for each download?

Ans: Apple retains 30% of revenue generated by the iOS app store and distributes the remaining 70% to developers.

3. How much does Google pays per Android application download?

Ans: Google retains 30% of the revenue generated by the Android app and distributes the remaining 70% to the app developers.

4. How much money do app developers make per download?

Ans: The cost of the mobile application revenue model depends on the main functionality of your application, such as the platform, the target audience’s expectations, the selection of the app monetisation model, etc.

5. Which App Development Platforms Pay the Most?

Ans: It has been discovered that more than 25% of iOS mobile application developers earn more than Android mobility experts. As a result, iOS is frequently the more profitable platform.