Should My App Make Money?
If you are designing an app, making an app, or even just thinking about an app, you might be wondering: should my app be positioned to make money, and how would I make money with my app?
The two questions, even though often paired together, are very different. In this piece, we will be tackling the question of should my app be making money. In short, the answer is yes. But it’s not as simple as you would think it is.
Only a handful of businesses in this world wouldn’t benefit from having their dedicated mobile app. Even if their company makes money, they want their app to make money of its own. Another reason you could want to make money from an app is because you believe that your next big idea will be something like Snapchat, Instagram, or even Flappy Bird.
Knowing how to let your app make you money is the hard part. Are you going to require a subscription? Are you going to force users into a one-time purchase? Or will you have some ads and in-app purchases? All of these questions need to be answered. This is where we come in.
How Does an App Make Money?
There are plenty of ways to have an app bring in some money. Some of them can be, but aren’t limited to:
- In-app purchases
- In-app advertising
- Sponsorships
- Affiliate links
- Subscriptions
Where is the Time Spent?
Before deciding what type of monetization strategy your app will take, you need to look at the apps around you and your category and see what they are doing right when making money.
90% of the time spent on any mobile device is spent in an app. The other 10% comes on web browsers. There is opportunity. Some websites make a fortune off of advertising, and they’re only taking up 10% of the people’s attention on their phones.
With that being said, if you are a business with a website, we hope the website is optimized for mobile devices. But if it is, that’s only half of the battle. If your customer is the average smartphone user, they have a 10% chance of accidentally, or possibly purposely, finding your website. But if you have a dedicated mobile app, it’s upwards of 90%.
In short, apps are winning the mobile device war. Here’s what the landscape looks like.
Where Users Spend Their Money
If your app is a new idea and your business will solely be inside the app, we will get back to you in the next section. But if your mobile app is simply an extension of your business, this is the perfect time to streamline your customer’s experience with you.
Customers want instant gratification, and they also want a process to buy with little to no barriers. If you look at the Amazon App, you can click on a product, read about it, and then swipe, and it will be shipped to your address on file while charging the card on file. It’s simple, quick, and doesn’t require much thought because it’s the easiest buying experience you can find.
In most cases, your customers will have a sign-in for your app. This means that their shipping and payment options are saved, their carts are always full, and they are very aware of where to find what they like.
As you can see above, when you meet the customer where they want to be completed (on Pay, Google Pay, or simply having their info saved), you will find many more customers coming back to you.
New Business Inside of a New App
Suppose your new idea will only be used inside an app, like a game, a communication platform, a productivity app, or even an informational app. In that case, the world is your oyster when making money with your app. You have plenty of options from subscriptions, one-time payments, and more.
Subscription Services – When and How
Subscription services are a fantastic way to make money, significantly if you can push out new and exciting content every week/month. Sports betting a. They will not only help you track your bets and see your potential ROI, but they will also give you “free” nd gambling apps are some of the best apps that utilize a monthly fee for unique and remarkable content picks that may or may not turn into a good bet for you.
But before you can convince anyone to sign up for your month-to-month service, they’ll need to be completely sold on what you’re offering them. One of the best ways to get them sold is to give them a free trial. Please give them a free go without signing up with a card/payment info. Some will try to provide them with the free version with a card on file, simply hoping that they either forget or don’t want the hassle of canceling. That’s not the right way.
Give them an honest free trial. If they are sold on the offering, which they should be if you are offering something worthwhile, they’ll have no problem paying a couple of bucks a month to get your reoccurring information.
Advertising
Something that mobile games are notorious for is in-app advertisements. If you’re looking for a good roadmap for implementing some advertisements, look at the tower defense game on the app store. Because we’re so confident that every tower defense game is the same, we don’t need to refer you to any specific game itself. Just download any free version of the top game. Between every few waves, you will run into an advertisement. Some will be videos, some will be static, and some will trick you into going to a new page or even the app store.
At first, this doesn’t seem like the worst thing in the world. But as you go into further rounds, the game nearly becomes unplayable. You can pass a level in less than a minute, but now you’re subject to watching a 45-second ad about the latest and greatest shaving cream. Pretty lame.
So what do you do? The next time an ad pops up, your search for the little button in the corner that says “turn off ads for $1.99,” and you quickly get rid of any ads.
So does your app only make money from the people willing to pay $2 to turn them off? No. Your most significant source of revenue will be the money that advertisers are willing to pay you. Especially if – and this is a big if – you can get app users’ info. This would include age, race, marital status, income, and more. Advertisers are much more willing to pay big money when they know they can show their targeted ads to their targetted audience.
In-App Purchases
This is one of the more difficult streams of revenue to master with an app. There is no shortage of apps that hope a little kid gets ahold of an adult’s phone and spams the ‘buy’ button for more coins, and then hopefully, the device owner never realizes what happened.
An app like Clash of Clans was, and still is, a great example of how to use in-app purchases. Spending money never crosses your mind in the first few weeks of having the game. It’s a free-to-play game that brings a group together inside of a Clan. But once a user in a rival clan decides to spend a few dollars on the game, it’ll change the entire game. You can’t get a leg up on the competition unless you pay an unethical amount of time in the game or charge your card $15. The solution is easy. Spend money, not time.
These micropurchases seem small but will add up very quickly. Clash of Clans doesn’t need to drown you in advertisements to make money from your download. Instead, they make a game so fun and addicting that you can’t put it down. And instead of making you want to buy coins in the game to beat a computer, they made it social.
If you make an in-app purchase, your friends now see you fall behind. Soon enough, you’re the last person on the Clan leaderboards, and you are inevitably kicked out. All because you weren’t willing to spend a few dollars on more elixir.
Free vs Paid App
Another way to make money from an app you’ve built or had built is to make the app a one-time, upfront purchase from the app store. This usually isn’t the best way to make money, especially if this is your and your developer’s first time putting anything onto the app store.
To love an app to pay before you are able to download it is something very few developers can instill in any given customer. If at any time you go search for the top paid apps on the app store, odds are you’ll see a handful of apps from developers that all have top free apps as well. It’s because they’ve built trust with app users and the communities that use apps like theirs.
But with that being said, 90% of apps on the Apple App Store are free. Free apps make money, the secret is out.
Paid apps aren’t how you built a big community, it’s how you monetize the communities you’ve already built.