How to Make Money From Mobile Apps

Everyone wants to learn how to make an app for free and make money.

Mobile apps are a great way for business owners to improve their business. They’re also the perfect platform if you think your idea will become the next big hit, like Instagram or Snapchat.

Regardless of your reason for making an app, I’m sure that They have something in common with other aspiring developers.

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They all want to make money. However, it is crucial that you figure out your app revenue strategy before you start app development. Without nailing down your app monetization models, you could end up wasting time and money.

First, I want to commend you for doing your research before you start building your first app.

I’ve seen so many people naïve enough to believe that just because they made an app, it would automatically generate money. That’s not true.

Here’s an analogy. When you start a new business, it will automatically make money. Absolutely not.

In the development of mobile apps and other businesses, everything starts with an effective monetization strategy. Not sure where to start?

Fortunately, you’ve come to the right place. As an expert in the mobile application industry, I have the knowledge and experience to point you in the right direction.

How do you make money from an app?

We will cover the best app monetization strategies and show you some examples in this guide. But in general, apps make money in the following ways:

• In-app purchases
• In-app advertising
• Sponsorships
• Affiliate Links

If you’re not selling a product, service, or subscription, you probably rely on some form of ads or affiliate programs to monetize your app. Even if your app is free and you don’t charge users to download it, you can still make money using these methods.

App Monetization Strategy – What are the best app monetization methods?

90% of time spent on mobile is in apps.

Consumers clearly love using apps, so the opportunity is there.

The key is there , figuring out how to pick the perfect app that will peak user interest and ultimately downloads.

But you need to be aware that downloads alone don’t always translate directly to dollars.

Building an app is expensive, and you will encounter hidden development costs along the way.

So before you put all your money into your new app idea stuck, you need to make sure it turns a profit.

Here’s what you need to know.

App Monetization Models: In-App Purchases vs. a Mobile Website

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For those of you who already have a business, I assume your business has a website.

Hopefully (for you) this website is mobile-friendly.

Websites that are not mobile friendly will reject visitors. So if you haven’t already done so, it must be a priority.

Now let’s discuss customer experience and how it’s affecting their buying habits. This will play a big part in your app monetization strategies.

Do you think users would rather buy on a mobile website or directly through a mobile application?

Apps win. Here’s why.

Convenience was the most common response from respondents.

The other top responses also reflect convenience and increase user satisfaction.

Your customers want everything fast.

Like I said before, speed can be an issue if your site isn’t mobile-friendly.

But it’s not an issue if users are navigating through your app.

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Treat your app like any other business. The easiest way to make money is to keep customers happy and coming back.

In addition to speed and convenience, the checkout process with a mobile purchase is also much easier.

In-app purchases in free mobile apps will be charged directly to the customer’s credit card associated with the app stores (Google Play Store or Apple App Store account). This is easy for app users as they don’t need to enter credit card information to complete in-app purchases.

See how easy it is to buy something in an app when your customers have Apple Pay connected to their devices.

One click and done. It’s that easy for the customer. This is how free apps make money.

How does that compare to a mobile site?

We’ve already established that speed is a factor, but for the sake of argument, let’s assume that your mobile site is already fast too running.

What else could be stopping the customer?

Your cards or accounts are not linked to your mobile site, so they have to enter all their information.

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The customer needs to log into their PayPal account or enter their credit card information.

Overall it’s just a longer process and more headache for the user.

Also lets typing all that information on a small screen leaves room for mistakes that can slow things down even more.

Don’t get me wrong. I’m not saying your mobile site shouldn’t have a checkout page or ways to monetize credit card purchases.

All I’m trying to say is that in-app purchases are better.

The platform you launch your app on also matters.

iOS vs. Android in-app purchases

Check out the difference between iOS and to Android purchases.

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The average purchase per user on iOS platforms is more than double that of Android.

That doesn’t mean that you should choose one over the other.

While iOS may have a higher number for average purchase, Android dominates in terms of total number of users.

If you look at smartphone sales in the Looking back in the fourth quarter of last year, 432 million devices were sold.

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Of the 432 million phones, 77 million had iOS software, while 352 million ran on the Android platform rm.

The two platforms make e.g together make up 99% of the market share, but Android alone accounts for 81.7%.

Yet 16% of Android developers make over $5,000 per month from their mobile apps, and 25% of iOS developers make over $5,000 in app revenue.

So keep these numbers in mind if you’re only planning to release to a single operating system.

App monetization strategy for physical products

We touched on this briefly before, but I wanted to expand on this topic.

To successfully sell consumable products through an app, you need to put yourself in the mind of a mobile shopper.

79% of smartphone users have made a purchase online in the last six months. This number keeps growing every year.

You don’t have to be the next Amazon. I’ll show you an example of a lesser-known company that knows how to use their mobile app to increase sales and make money.

You can follow their lead and apply their strategies to your app, if you also sell a physical product.

I’m referring to the company Touch of Modern.

70% of the company’s total sales are generated from mobile devices. About two-thirds of those sales come directly from their app. So how do they do it?

About 150,000 to 200,000 users download this app every month. 57% of their shoppers are repeat customers.

If you can focus on customer acquisition and retention at the same time, that’s a recipe for success.

It’s their checkout flow, the touch of modern so successful makes.

When you download the app, you create a profile that securely stores your information.

This way, whenever customers can open the app, they go straight to shopping go.

You use a simple navigation screen. Customers can easily search and browse through items that interest them.

Once they find something that interests them, they can click on the product for more information.

Now the user sees a detailed product description in addition to a larger photo.

If he likes what he sees and reads, he can add it to the shopping cart with just one click.

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Once it’s in their cart, the customer can proceed to checkout with just a simple click.

That’s it.

Your app allows users to complete the shopping and checkout process It only takes three steps to complete.

There are far fewer hassles compared to a mobile e-commerce site.

Plus, the mobile app allows Touch of Modern to communicate better with its customers .

They send app users notifications with daily deals and discounted items to encourage them to make more purchases.

Finally does this strategy work.

If you currently sell products on your website and mobile website, y you can generate more sales by successfully creating a mobile app.

Monetization methods for free apps im Compared to paid apps (monetization strategy for free apps)

Another thing to consider is whether or not you will charge users for downloading your app.

On average you would of course get a higher revenue per download.

It might seem like a nice way to get some upfront profits, but you might turn people away if they have to pay.

90% of the apps in the Apple App Store are free. Free apps make money.

But that doesn’t mean you have to go that route.

Paid apps are a great way to get more loyal customers. If they’re willing to make the initial purchase just for installation, they’re more likely to use it and make more purchases.

However, if you’re an established brand that already has retail channels and customers (like Touch of Modern) it’s probably in your best interest to offer your app for free.

People download these apps to save money and get discounts instead of spending more just to have the opportunity to shop.

Remember; Your app will also have competition.

This is how customers recognize that they can find something similar and potentially better for free instead of paying to download your app.

When you offer an app free, find other sources of income. Check out this data from Statista:

Free apps may get you significantly more downloads, but users may be less engaged. If they don’t pay, there is no obligation. They could potentially download your app, try it once and never use it again.

While they may sound daunting, don’t see it that way.

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It’s not. It costs you nothing if users download your app and never use it.

Of course you would prefer active users, but at the end of the day it won’t hurt your business.

If you’re between Before releasing a free or paid app, I would rather recommend a free download.

This increases the chances of more downloads and you can earn money through other sources.

Here you can see the US ad CPM rates for various mobile app ads.

So there is definitely money to be made here if you can sell advertising space in your app.

Note that that these numbers are just averages and not set in stone.

If so, tons of active daily users and your app is growing in popularity, you can base a negotiate a higher price with advertisers.

Freemium Upsell

Free apps make money. You could always use the freemium model popular with startups and gaming apps. With this method, the free version of your app may include display ads, pop-ups, sponsorships, video ads, banner ads, or other ways to generate app revenue from your audience. You can make money by paying a monthly sponsorship fee from top advertisers.

But then offer paid versions of the app with premium features, e.g. B. Remove mobile ads. The ad-free version offers a better user experience.

Some of the most successful apps make money by offering premium app content to make money. Others have a free app version and another version for paid apps.

Here is an example. Let’s take a look at how a popular dating app does this on its platform. I’m sure you’ve heard of Tinder. Users can download the app for free and use the basic functions. But they offer premium content and features on a monthly subscription basis.

The concept is super simple. Users create a profile and add photos of themselves.

Based on their location and preferences, they see photos of other users that match their search criteria (age, gender, etc.).

If you like someone else’s profile, swipe right. If not, swipe left.

When two people swipe right, they are connected and can start a conversation.

Anyone who downloads this app has access to these features for free. But there are certain limitations. If users swipe right on too many profiles in one day, they won’t be able to browse further for 24 hours.

Subscription Models

Another way to monetize a free app is through upgrades and subscriptions. The subscription model is great for recurring revenue.

This is where a premium subscription comes in.

If users want unlimited likes, they can upgrade their account to have this feature access.

The upgraded subscription comes with more bonus features like location switching, rewind and an ad-free experience.

You can apply the same business model and pricing strategy to your app. Let users download and use the app for free, but withhold the best features for users who are willing to pay.

Advertising

Showing in-app ads is another popular monetization strategy.It’s one of the easiest ways to start making money instantly from an app.

If you don’t have affiliate marketing partners, showing your ads through a third-party ad network is the way to go. These ad networks automatically serve ads to their users and you get paid accordingly.

The exact monetization model varies depending on the ad type and your agreement with the network. For example, you only get a fixed fee for ads based on views. In other cases, you might get a higher payment when a user clicks on the ad or takes an action based on the ad.

The four main types of mobile ads are interstitial ads, banner ads, and in-app video ads and native ads.

Referral Marketing

Referral Marketing is another form of mobile advertising. With referral programs, you promote a third-party product or service in your app.

Many referral programs pay more than traditional ads. This extends what I described above. There is usually a referral link that you promote and the payout is usually based on one of these models:

• Cost per Action or Cost per Acquisition — This measures a post-install action to see how engaged users are with the ad. For example, registering for a free trial, purchasing a product, or creating an account might fall into this category.
• Cost Per Click (CPC) – As the name suggests, With the CPC model, you get paid based on the number of times users click the ad in your app.
• Cost-per-View (CPV) – For CPV models, I will only paid for viewing the ad. As long as it is viewed by a user, you will be paid per view. These are usually cheaper because the user doesn’t have to click the ad or take any action.
• Cost Per Install (CPI) – This is a specific type of action. You get paid every time a user clicks on an ad that leads to the installation of another app.

Referral marketing programs can be very lucrative if you find the right affiliates.

Here’s a quick summary of how free mobile apps make money:

• In-app advertising (native ads, banner ads, and in-app ads like the Weather Channel app and other such apps)
• App purchases (products or service apps)
• Offer in-app purchases (such as an upgrade in gaming apps)
• Freemium Apps

Whatever your app idea, you can still launch a free mobile app, encourage free app downloads, and have a successful app making money. Some of the most popular mobile apps are free and still get a lot of app downloads.

Conclusion

Not all apps make money.

If you plan to just create one with no app monetization model and just sit back and collect your money , you’re in for a rude awakening.

Like a business, before you start developing an app, you need to have a strategy and a goal. It may take some time to get it right. The best monetization model for you and your app may be different from the app monetization model I use and my own app.

You may have better luck with some platforms than others. App users behave differently. So it wouldn’t be shocking if you have more success in selling paid apps for your iOS apps compared to Android apps. Your Android app may require you to use a different monetization model to make money, e.g. B. a freemium model or in-app advertising. Results vary by individual app stores.

Mobile users prefer apps over mobile websites.

While your business definitely needs a mobile-friendly website, an app can greatly improve the customer experience.

Sure , there are some upfront costs involved in creating, developing, and launching your app.

But you can save time and money by building an app through the BuildFire platform.

If you have a sell a physical product, you can make more money with a mobile app.

Compared to desktop sites and mobile websites, mobile apps have the lowest cart abandonment rates. Why?

The whole process is easier for the customer. They can buy something with just a few clicks instead of entering all their information.

You should also decide whether to offer the app for free or pay users to download it. Ultimately, this decision is entirely yours. But I would recommend offering free downloads.

App owners and app developers can still make money from in-app purchases, advertising, and subscriptions that offer premium upgrades.

If you follow this guide, you’ll be on the right track to developing a mobile app that actually makes money.

Plan to launch your mobile app for iOS for the Apple App Store and for Android for Publish to the Google Play Store, or both?

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