How Apps Make Money?
I’m going to give you a quick introduction into where the app money is. This is the question that I usually get. How do you make money with apps? Where is the money in app business? and How you should be making any money if you have an app on the store and people are using them.
I’ll try to keep it very simple and short. Just give you a kind of an introduction on the monetization methods available to us. I will show you the best monetization method that I personally use for my own apps. Let’s say that you have built an app, you’ve done your market research and you have an app up and running on the store. People are using your app. You’re providing some content and you’ve got a decent number of downloads. People come to your app every single day or once a week or maybe even once after they download it. It doesn’t matter. They come to your app, they open your app. One way that you can monetize, and this is one of the kind of the very common ways of monetizing, is by showing ads in your app. Basically you rent a kind of a real estate of your app. Sometimes it’s a banner down below. You can have the banner at the top or you can have occasional fullscreen interstitial ad as well. People see these ads and for every single click that they do on the ad, they go to the advertisers website and that advertiser pays you for that attention that you bring them. This would be the step number one.
Step number two, they click on the ad and they go to the advertisers website usually for mobile apps it’s a mobile optimized website. They basically grab people’s attention, maybe they get leads, they make sales. We don’t have anything to do with what they’re doing on their website. You just refer the traffic and of course and get paid for every single click. I usually get paid something between five to twenty cents per click which is when it comes to countries which are really active online and they have heaps of credit cards and stuff like US Australia Canada and so on. The revenue varies based on the country. That’s a very good amount of money per click that you generate in your app. That is one of the monetization channels that you can use. The good thing about this method is that you can put your app on the store for free, which seems to be the way to go about these days. Paid apps are kind of dying out and people want to try your app before they buy it. Another method which is getting really popular and I personally have generated considerable amount of money with this method is using in-app purchases or in-app revenue. Basically what you do is, when people download your app and start using it you offer some sort of upgrade in your app so they get some sort of dialogue or message in the app saying if you want to remove the ads. Removing the ads would be one way as an upgrade or if you want to access more feature so more features, could be better search, more content, noted daily notifications whatever you want you can package it as an in-app purchase package and sell it for something between $0.99 up to $900 dollars for Google Play and Appstore which is a big package. If you’re doing an app for some sort of business-to-business thing and your app is very special and you have no competition I’ve seen a couple of apps on the App Store which are related to dentist are charging like $600 to $700 for the in-app purchase. You get the idea. You can use the in-app purchase dialog to monetize a portion of your free audience. Usually you can monetize 20% of your good users. It’s the 80/20 rule. If you’re not familiar with it you can go read about it online. Basically a 20% of your users will become consistent users of your app. They come back to your app maybe every day or a couple of times a week and 20% of that audience is willing to pay for the in-app purchase. This is an estimate but in majority of cases you can rely on that number.
These are the best two ways that I have used myself. For monetizing through ads I’m using various ad networks. AdMob is my favorite network which is by Google. I’ve recently started partnership with Google in some ways. I’m trying to bring a little bit of Google support to my students and I kind of give a better service to my students.