How do apps generate revenues?
We won’t deny the fact that developing an app can be pretty costly, but it is at 100% a worthy investment as it generates revenues in so many ways. Except for monetized-service apps, like delivery and e-commerce apps, most of the apps are free of cost and the majority of app users, including me, avoid paying for premium services.
So how do those apps generate revenue? Have you ever wondered?
Actually, publishing apps is one of the best ways to earn passive income! We all know how much app owners can earn, such as Kevin Systrom and Mike Krieger. Millions of mobile apps generate more than $25 billion in revenue each year. It is all through the following most relevant ways:
Advertisement:
Yep! Those “appearing out of nowhere” annoying ads are going to fill your bank account! Via third-party networking, you will get paid every time commercials are displayed on your app and that’s according to the number of views and impressions, clicks on the ad and even according to the number of downloads of the advertised app.
Note: Ads are SOOO hated by users! Therefore basing your income on ads isn’t the best strategy to opt for. Make it moderate, so you earn money and stop annoying your users!
Subscription:
Make your app worth it and earn money via subscription! As long as your app is useful and cheap, your users would consider subscribing. There are many common techniques, here are some examples of the major effective ones:
- The majority of app publishers offer free content trial then monetized subscriptions for a very interesting price that allows access to full content.
- Some gaming apps offer a free game and charge users for additional boosters and levels
- editorial apps offer both free and paid filters and options for those who wish to continue to access the app content
- service apps are based on paid services after subscribing
Transaction fees:
Apps, where you get to sell and buy products, are so trendy nowadays. It’s an innovative approach that many e-businesses opt for by selling their merchandise or 3rd party merchandise via their own apps or through links shared on other apps. App publishers get paid by transaction fees.
Usually, the transaction fees are reduced in order to persuade users to buy/ sell on your app. The big earnings come along with the number of daily transactions.
It is a proper way to gain money without investing a lot of money.
Collecting and selling Data:
Nowadays, having access to data is the new ultimate business power!
Mobile apps are able to tell a lot about its users’ behavior as they are installed on the closest device to their hearts, the Smartphones.
In fact, your app’s capacity to collect data: like user’s email address, app preferences, social media account,etc., is highly appreciated by so many research centers in different fields and you better take advantage of that! As an app publisher, you can sell your users’ data at very handsome prices.
In-App Purchases:
In-app purchases are directly made from within the app and require a simple process where you get to access special content and get the ability to sell a variety of virtual items directly from the app.
Example: Gaming apps that provide digital currencies like gems, gold, lives, and coins, earn money from obsessed game players would spend cash on extra gems to pass another level. They play, you earn! Fair enough, isn’t it?
Note: This monetization strategy is the highest in terms of incomes, and it’s expected to dominate the world for years to come.
Referral marketing:
Referral marketing is like the digital version of “word of mouth”, it consists of promoting, selling affiliates’ products or services to optimize revenue opportunities based on the number of clicks or installs. Examples: A popular app that promotes other apps/ an Instagram account that tags a business account.
Note: People are more likely to use/buy products referred by a third party. The power of referral marketing lies in its strategic use, app publishers rely on the power of consumers’ recommendations to achieve the wanted results.
Physical Purchases (Gifts/ merchandise):
So many free gaming apps turn their apps into a real brand and increase their incomes by selling branded physical goods, like T-shirts, toys, mobile cases, stickers, backpacks,skate-board, etc
For example, “Rovio” sells around 1 million items every month out of the Angry birds brand so is the case of “king” with candy saga.
Selling your app:
You must be having nightmares just for the thought of Selling the fruit of your efforts and sleepless nights. But yeah as scary as it is, selling your published app is still a money-making option!
Some app publishers create successful apps in order to resell them. It is a modern business nowadays!!
Did you know that Mark Zuckerberg’s favorite hobby is going shopping in the app market? Wherever there is success there are giants like Facebook ready to put cash on the table!
Reminder
You might be thinking: yeah, easier said than done!
Mobile Apps are the game-changer in the business world today but what makes it concrete is those 3 tips to keep in mind :
1- It’s all about the right marketing strategy!
2- Apps that are useful, they can’t be ignored.
3- Apps that are so fun and engaging, they can’t be ignored
At the end of this blog, there is nothing else to mention but “the decision is in your hands”.
