If you have reached this post it is probably because you want monetise an app or because, before developing it, you want to know how you can make money with an app.
Every day we find more apps on the market and that is because users prefer them over the web format because of how useful and fast they are for some tasks, but also because companies have realised the advantages of having an app. However, not all users are willing to pay for them..
In a market that is constantly growing and where there is more and more competition, is it possible to make an app profitable? Is it possible to make money with an app? At Yapiko we believe that this is something that must be present from the moment you have an idea for an app until the end of the mobile app development process.
Monetising an app: What do you need to know?
According to Digital Consumer report from Smartme Analytics, wich studies daily smartphone use, spaniards spent more than 3 hours a day on their smartphone, mainly on communications applications, games, ecommerce and apps peer to peer (apps that allow users to connect with each other and share files on their computers, such as eMule). This makes it clearer that the use of applications is very present in people’s lives.
On the other hand, it is necessary to bear in mind that, of the more than 3 million applications that exist in Google’s Play Store and Apple’s App Store, 90% of the apps are free of charge. In other words,the user pays nothing to download the app.
In other words, earning money from downloads is not the main option that you should consider, as the ways of earning money with an app that work best tend to be within the free apps.
Therefore, earning money with each download of the app is one of the first alternatives that may come to mind, but nowadays we must consider other ways of monetising an app.
App Monetisation Alternatives
Subscriptions
This is one of the most widely used ways to earn money with an app. Paying by subscription consists of paying an amount periodically to access the app’s services or content. Different types of subscriptions can be offered to unlock certain features of the app depending on the level of the subscription.
In-app Purchases
Another of the most commonly used alternatives for monetising an app are in-app purchases or, in other words, in-app purchases. This alternative for monetising an app is perfect for those who want to sell their products and services within the app, but it is also one of the most profitable.
If your app is a game, you can make in-app purchases in order to get improvements or advantages when playing. On the other hand, if your app generates reports or is a data management app, users might buy more elaborate reports or reports that include certain data that the normal version does not have.
If you have reached the point of having an app to sell your products or services, then your business is profitable enough to conquer the app channel , making it a perfect way to increase your profits.
In-app advertising
Most commonly, in this alternative for monetising an app, the download of the app is free of charge. The goal of making money from in-app advertising is to get as many interactions in the app as possible.
The more data and interactions you get in the app, the more likely it is that companies will want to advertise in the app. The way to make money from advertising is to pay for each click on the ads that appear within the app.
The key here is to get as much traffic as possible and reach as many users as possible.
Sponsorship
If you get an established company in the market or someone influential to sponsor your app, you have a lot of ground to gain. You will be able to enjoy funding to help you improve your app, but you will also have the credibility of having a brand behind you that will give users confidence.
This, if all goes well, will turn into revenue and downloads and your goal of making money with an app will be achieved.
Free with paid or freemium features
This way of monetising an app is the alternative to subscription or pay-per-download. The app will be downloaded as free and some of its functionalities will be limited, looking for users to upgrade to the premium version, paying for it, in order to enjoy additional features.
In this case, the expectation must be generated so that users will want to pay for these extra features of the app.
M-Commerce
The most common users of this app monetisation alternative are brands that already have e-commerce and want to add an additional sales and loyalty channel. It is the union between ecommerce and apps that aims to cover both channels to increase sales and profitability.
Affiliate Monetisation
The affiliate model is based on promoting third-party products in exchange for a percentage commission for each sale. Monetising an app through this system can be done in two ways.
The first is to promote another app within your app, to take a comission for each download. The second one is to promote products from other brands within your app and earn a percentage commission for each sale generated through your app.
Mobile Marketing Automation
This option consists in coordinating marketing campaigns through mobile channels by means of push notifications, email marketing campaigns and in-app messages.
The aim of these multi-channel campaigns is to accompany users through the conversion funnel and convince them to make a purchase.
Pay-per-download.
Although we have mentioned that it should not be the first option on your list (in fact, we put it last) formaking money with an app, the truth is that it is there and we are going to talk about it.
Pay-per-download is the same as cost-per-install. It is the most direct, effective and fastest way to make money with an app, but also the most difficult way of monetisation.
Your app must provide such an important value for users that they are willing to pay for it and it is important that in order to charge per installation your app is well known and you already have some recognition in the market.
These app monetisation alternatives are not all mutually exclusive and are often combined to improve app profitability (e.g. in-app purchases and advertising and sponsorship). Consideration should be given to which of these might be appropriate in each case.
Mobile app development company
Coming to the end of the article, we hope that all this information has helped you to know the alternatives to monetise your app.
If you have any doubts, you can write to us and we will solve them together. Otherwise, if you want to tell us what you have in mind so we can start thinking about how to help you monetise your app, contact us!
At Yapiko we are dedicated to bespoke app development and we carefully analyse your situation, your requirements and your business model to find the best solution taking into account your time and budget constraints.
