How do apps make money?

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how do apps make money

People create apps for various purposes. One may create an app to represent the already existing business on a digital platform. The other may pursue to create something new and revolutionary. Regardless of the purpose, the majority of the apps seek to make money. Making money through a mobile application can be a challenging process, just like developing the app. You can’t create an app and expect it to generate cash without applying a clear, persuasive strategy. We are here to provide you with effective, practical, proven strategies to make your app profitable. 

Why does app monetization matter?

According to Statista Research Department, as of March 2021, around 96% of mobile applications in Google Play and more than 92 % of iOS apps are available for free. These statistics illustrate that the vast majority of mobile applications are free of charge. Consider that mobile app markets like Google Play and Apple Store do not pay for the downloads of your app. Instead, these stores take some percentage of the app’s revenue. 

A very small percentage of people are willing to pay for an app only if you earned their trust and offer highly functional, advanced features with quality. However, relying on paid features might not be sufficient to cover all of your project costs. Considering all of the above-mentioned details, you have to consider alternative ways to monetize your product to sustain your project and make money. Luckily we have some options to make your journey easier and more productive.

Advertising

As people started to spend hours on their mobile apps, many advertisers began to consider apps as good platforms for promoting their products and services. Therefore, you can earn substantial revenues by integrating advertisements into your mobile application. It is a common practice that is applied by seven out of ten mobile applications.

You should be very cautious about the type of advertisements you chose to endorse through your app. Make sure that the ad is relevant and appealing for your targeted audience. Try to select ads that will actually interest, benefit and help your customers. It is crucial that you do not burden your clients with too many adverts, as it can drastically affect customer experience. 

App Advertisement Methods

  • Banner ads, also known as display ads, appear on the top or bottom of your device screen. Banner ads can redirect a customer from the hosting platform to the advertiser’s website. In other words, your app will link customers and advertisers with a single click. Banner ads first emerged in the 1990s and are still considered a practical way to promote brands and businesses online.
  • Interstitial ads will demonstrate the advertisement to customers on the full screen of their device. You should be very careful when applying interstitial ads not to harm your customers’ user experience. You may place the ad while the app is still loading or whenever the app is closed to give the users space to reflect and think about the content of the advertisement. It is crucial to focus on your customer’s experience first, as the more satisfied they are with your app, the more they will be eager to click on additional offers.
  • Native ads are intended to appear as an integral part of the mobile application. With the precise design and utilization, they perfectly blend in with the rest of the content published on the mobile app. This method of promotion highly increases the engagement with the customers and does not harm the user experience if applied efficiently. 
  • Rewarded ads give users the ability to watch videos or interact with the ads being played in exchange for in-app rewards. This is a perfect solution, especially for game apps. For instance, a game might award you an extra life if you watch a 20-second ad. Rewarded ads are a perfect model of how mobile applications can integrate advertisements while satisfying customer needs. 

In-App purchases

As we have mentioned earlier, most apps are downloaded for free, but this doesn’t necessarily mean that the customers will have no occasion to spend money on your app in the future. In-app purchases will allow your customers to have access to advanced features and functionalities of your app. 

There are three main categories for in-app purchases.

Consumable types of in-app purchases are most used in mobile games. They include in-game digital currencies, health points, or power-ups. 

Non-consumable in-app purchases, unlike consumable ones, can be accessed permanently. This category includes ad blocking, unlocking levels or items, downloading content, to name a few. 

 Non‑Renewing Subscriptions will allow your customers to access advanced features and functionalities for a specified period of time. Once the subscription expires, customers have to renew it to have access. 

Subscription 

The subscription model is increasingly getting more popular among developers as it has proven to be an effective way to generate app revenue. This option allows customers to download your mobile application for free, use some of the features of your app, and then pay for more advanced content and services. Some of the most popular apps, such as Netflix, Spotify, and Google Music, applied the subscription model to monetize their services. This model will ensure constant, reliable revenue for your app. It will also positively affect consumer engagement as people who pay for app services tend to invest more time to take full advantage of all functionalities.  

We offered different methods of how you can monetize your app after you developed and launched it. Here is one more way to apply before the app’s launch to significantly save on the development expenses. Mobile application builder platforms like ConstApps will allow you to create your mobile app for just  29 dollars in your budget. With ConstApps, you will no longer need big investments for hiring development teams and enormous resources to construct an app. By saving money on the most expensive development stage, you will have more improvement options for your app in the future, leading to more monetization opportunities.