People have made hundreds if not millions of dollars through mobile apps. Do you have a strategy to monetize your app?

A few years ago, it would have been relatively more straightforward to build and launch a mobile app. Starting mobile app today is tricky. If you want to make money from your mobile app, it’s even harder.

There are about 3.8 million apps on Google Play Store and around 2 million apps on the Apple App Store.

The objective is not to discourage you but to give you a realistic picture. If you have a good strategy from scratch both from product and marketing aspect, then your chance to succeed is much higher. Otherwise, your’s would be just another app on the store.

The chances of your single app making millions of dollars in revenue are slim. Here’s how the big guys play it. They usually have a few apps in their portfolio making a hundred thousand dollars in revenue which leads them to make a million dollars combined.

If you want the apps to work for you and make money automatically, then you will need a few apps in your portfolio that make around $100k in revenue so that you can make a million dollars.

Let’s break it down even further:

First of all, as you know, you either have a free app or a paid app in the stores.

  1. Paid
  2. Free

Paid Mobile apps – You spend a certain amount to download the app.

Free Mobile Apps – You download the app for free, and they might have to pay for in-app purchases later aka the Freemium model. This model is more common and helps you get a higher number of downloads and sign-ups.

This graph shows you the number of paid vs. free apps in the stores.

Now, let’s take a quick look at how apps make money and what are some of the strategies that you can follow to make money with your app.

Like any business, if you can sell a product or a service through your app, then that would be the primary source of revenue for your business/ app.

But not all apps sell services or products, but they can still make money. You ask how? By using app monetization strategies. Let’s take a look at these and how it can benefit your app business.

Advertisements

This is the most common way to make money through the apps. Leveraging third-party ad networks to display the ads in your app.

You just need to drive more traffic to your app and increase the downloads. If you have more traffic and higher traction, then the chances are you will make some money through the ads.

Here’s a breakdown of different types of ads that you can run depending on the use-case of your app:

Banner Ads:

Banner ads are the rectangular graphic display and are placed in the visible areas of the app like top, bottom or sides. The advertiser pays the host to display the ad on the app. This can be done in three ways: Cost Per Impression, Cost Per Click and Cost Per Action.

Native Ads:

Native ads are used to promote the business itself, and these are the form of ads that match the look, function and feel of the platform or media format upon which it appears.

Video Ads:

This is another type of Online advertising and it did phenomenally well these days. Earning from the video ads are in many ways, commonly: PPV (Pay Per View) or CPC (Cost Per Click).

Interstitial Ads:

These ads are displayed between the activities or the pause between game levels. Interstitial ads cover the full screen of their host app.

Incentivized ads:

These ads are displayed on a platform, and when a user visits or views the ad, they get paid in the form of some compensation or incentive.

Sponsorship:

If you have a good app idea, then you can find a sponsor to fund your mobile app project or continue to pay you a monthly subscription which would allow you to provide an ad-free experience to your app users.

In-App purchases:

This is a powerful strategy to earn money. You need to attract the users and make them addicted to your app. Then provide some premium features at an additional cost. If this is planned from the beginning and is tied up to your user experience, then this will turn out to be the monetization strategy for you.

Referral/ Niche-Promotion Marketing:

You can promote third-party brands and products and charge them to place their offer/ logo in your app or send out a push notification. You can also make a lot of money if you list other businesses and promote a specific activity to the top of the list.

Subscriptions:

SAAS – software as a subscription is a huge deal. You can make a lot of money if you provide a service or premium content. Users can subscribe to your app and pay you a monthly fee to use your premium service.

Affiliate Marketing:

This is powerful as well. If you promote their product and the user uses your link to purchase that product, then you will get some commission. If you tie up with other businesses to develop their products through your app, then you can make a good commission through the transaction.

Conclusion:

Make sure to mix and match these app monetization techniques to make money from your app. Be sure to focus on the other aspects like solid mobile app marketing plan,  clean design, well thought out user-experience among different strategies. These techniques might not work alone, but they have to be well crafted in your overall strategy. Your user-experience should nudge the users towards the monetized items in your app, and it should feel natural to the user. So dive in and leverage these techniques to your advantage. Mobile apps are already a hundred billion dollar marketplace, and the best is yet to come.

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