It is no secret that the mobile application market is growing like crazy at an unprecedented rate. The size of this enormous industry is growing every day, and doesn’t seem to be slowing down any time soon.
A growing number of developers are constantly joining the industry, and with that comes an increasing number of applications.
The industry of mobile applications has undoubtedly surpassed all records regarding the revenue it brings in. According to the predictions, mobile app revenue will reach $935 billion in 2023, a staggering increase from 2017.
Because of this tendency, many startups and small business owners consider going mobile and releasing apps to make more money.
However, the question that is always present in everyone’s mind is how you can make money with an app, what you should consider when you make a mobile app, and what models to pay attention to when making an app. Throughout the article, we will go over every aspect of it.
Go on reading.
First, let’s see what statistics say about mobile apps before we move on to applications.
App Monetization Market Statistics You Should Know
- According to a survey, the Google Play store received over 2.65 million app downloads in July 2022. Furthermore, it has also been revealed that gaming android apps will most likely dominate the Google Play Store by 2024, accounting for about 70% of the total revenue generated by all apps in the store.
- During the second quarter of 2022, the App Store for iOS-based applications recorded a total of 2.18 million apps, over twice as many available in the first quarter. Compared to the previous quarter, the overall revenue generated from the app revenue increased by 5%.
- According to an estimation, the combined Apple Store and Google Play Store app downloads in the first quarter of 2022 totaled 36.8 billion, which is more than double the version of the year before. There has been an increase of 2% for the last quarter compared with the company’s previous quarter.
- In terms of app monetization stats as of 2016, 8% of US-generating app revenues are derived from paid apps, whereas 25% of the US-generated app revenues are generated from advertising (video ads, popup ads, display ads, etc.).
- Growth of approximately 4% is expected to be generated by advertising generated through in-app ads between 2021 and 2022. There is also likely to be an increase in in-app purchases by 8.4% between 2021-2022, which is another positive trend.
- App earning competition is fierce in the market, as evidenced by the above figures. Then, it will be vital for you to ensure the success of your business application in the market under such circumstances. You should probably dedicate your attention to the proper considerations before building your business application to minimize the likelihood of making the wrong choices.
Making Money with Apps: Things to Consider
It is essential to take a little time out before you begin to design and develop your app, and also list down some important things that should be considered before making any investment. There is no harm in conducting your research.
Still, it is always best to seek technical guidance from a trusted company that provides mobile app development or an industry expert with insight into building money-making apps.
It is essential to look out for these factors before developing your app, so make sure you include the following top four factors when looking for these factors.
Target audience
One factor determining the amount of money an app can make is its target audience.
If you are making a mobile application that business people will use, you should ensure that this monetization strategy won’t waste their time.
Similarly, it is good to give kids a few free options when building an app aimed at them.
It is essential to examine your target audience before starting any app monetization plans so that you will be able to earn an online income from these strategies effectively.
What is the target audience for the project? Are there any requirements they have? Is there a specific amount they will pay? Simply put, your users need to be aware of the genuine worth of your products before making a purchase.
Technologies
With the right set of technologies, you can enhance your app’s user experience, make it unique from the competition, and maximize earnings.
Analyzing competitors
The decision of how to make money from a mobile app is also influenced by conducting competitive analysis.
A clear understanding of all the profit earned by similar applications in the market and what strategies they prefer can aid in gaining more insight into their strategy. In the end, this ultimately helps you to make an informed decision.
There is a fierce fight for the market in the present, as well as the requirement to analyze competitors not just for their highlights, functions, and designs of an application but also for their price range.
The most important thing you should do if you are planning to monetize your application is to conduct an in-depth investigation and gain an understanding of your competitors to monetize the application effectively. It’s all a matter of asking yourself specific questions, such as how much the competitors earn.
What kind of quality do their models have? Are there any loopholes or opportunities you can take advantage of to make money?
Furthermore, a well-developed marketing plan for your mobile app development will allow you to have a more effective marketing strategy and increase your sales.
App purpose
First, you should understand your application type before choosing any possible monetization models. If you encounter any issue with your application, what and how do you resolve it?
The app’s purpose also plays a crucial role in understanding how apps make money when looking at how apps make money. To understand the purpose of your app in more detail, you need to answer these questions.
How does your app solve the problem that you are trying to solve?
For you to build a successful app, you need to be able to choose the right software development services.
Can your app monetization significantly impact the market as a whole?
Is the app helpful to the customers, and how will it satisfy their needs?
Having a reasonable answer regarding the purpose of your application allows you to choose the right monetization strategy, for instance, a subscription model for applications that provide services or content.
Six Mobile App Monetization Models to Consider
It is important to remember that the pricing strategy you choose for your app makes a difference in the chance of it becoming a money-making application. This means that you must be familiar with all kinds of bankable monetization strategies that you can use to monetize your mobile apps. Rather than spending time on how to build an app and earn money from it, let’s jump right into learning how to earn money from it.
The following are a few of the most significant ones:
Freemium model and in-app purchases
It is highly recommended to take Freemium as an option when looking at how to monetize an app without ads when looking at how to monetize an app that does not have ads.
It is important to note that the application is free to use here. However, the mobile application would require the users to pay a fee for them to be able to purchase a wide variety of virtual elements provided by the application. In addition, the app contains premium content, game currency, extra lives, and blocking advertisements.
The merits of in-app purchases
- Since users can try the app before they purchase it, there will be a more significant user base.
- As long as the app is planned well, profits will be maximum, and the ROI will be higher.
The demerits of in-app purchases
- An app that provides in-app purchases must pay the App Store fee (i.e.,, 30%) for making the in-app purchases.
A subscription-based model (Software-as-a-Service)
A subscription model is another method of monetizing an app.
A mobile app development company may charge its customers a weekly, monthly, or annual fee in exchange for a particular service they offer.
In addition to cloud-based services and audio and video content-based apps such as Netflix, Spotify, or Google Music, this business and monetization model is often recommended for cloud-based services, audio, and video content-based apps.
It is worth mentioning that only 5% of successful app developers make money with subscriptions through their apps.
Merits of the subscription model
- It attracts a large number of free users.
- Free users can still use the app with limited features even after canceling their subscriptions.
Demerits of the Subscription model
- The amount of content you can make available for free requires a strategy.
Advertising within apps
Even though your application is free to download and use, you can still earn money to support your application if you click on the advertisements displayed within your application, which allows you to earn money. The in-app advertising model effectively monetizes the app.
The advertisement model utilized by this model includes a variety of advertising formats, including Interstitial ads, Banner ads, Video ads, Native ads, Text ads, Native ads, etc.
Does advertising on apps make a lot of money? Revenue per impression could vary between $0.10 and $10 depending on the advertisement type and the impressive size.
Merits of in-app advertising
- Identifies target audiences
- Result-oriented
- A great extension to reach your target audience
Demerits of in-app advertising
- The market share of competitors is higher.
- A low level of audience involvement
Sponsorship
There is yet another method of generating income from your mobile app: sponsorship. It is commonly adopted by applications with a solid user base and is a practical approach for connecting with brands from similar niche markets.
There are two main deals to consider when we discuss in detail how apps will make money using this monetization strategy to make this possible –
- Divide mobile app revenue equally
- Sponsorship fees should be set every month.
Merits of sponsorship model
- Enhances the visibility of your business app
- Asserts your expertise and consolidates your business
It brings the right audience to your app
Demerits of sponsorship
- The wrong way to do it creates controversies.
- Sponsorship depends on your ability to network and market.
Crowdfunding
Among the many ways mobile app developers can monetize their apps in 2022, crowdfunding is one of the most profitable options.
As a startup, you can exchange your ideas or publish an MVP version to raise funds on platforms like Kickstarter, CrowdFunder, Indiegogo, and Fundable to do the required marketing and fundraising to get your app into the market.
The Hello Earth app, which features a cat character of worldwide fame, made USD 148k in 2017 through monetization strategies.
Merits of the crowdfunding model
- Financing your app without upfront costs
- This is an excellent way to see what your audience thinks
- This process can lead to your investors becoming your customers
Demerits of crowdfunding
- Developing and pitching a project is not an easy process.
- A failed project can damage a company’s reputation.
Links to affiliate sites
This is another type of sponsorship that exists. As opposed to granting advertising rights solely to one organization, however, to achieve the best results, you would negotiate with several organizations and place a link to their website in your application.
In this way, you can increase the income from your apps to a reasonable level if you do not have a strong competitor on the market willing to cover your app’s costs.
You have now become familiar with how apps make money and what all factors need to be considered when evaluating the amount of money they earn.
Let’s wrap up our discussion by finding out how you can choose the right monetization strategy for your mobile app business and get an insight into the future trends in the mobile app industry.
What Are The Best Monetization Methods For Apps?
To succeed in business, you need to find the right monetization strategies for your app. Do not worry. There is a perspective that will guide you through the decision-making process so you will not feel lost or confused.
Creating a funnel that leads your audience to your monetization model is essential
Having identified your target audience and market persona, you can create a funnel that will translate your traffic into revenue for your app once you have placed your target audience and persona.
For example, the game-based features and mini-challenges that can be incorporated into a language-learning app can be a huge hit.
As soon as your users get hooked, you can add new features and enhance their complexity to monetize their experience.
Choosing the right platform for your app
Depending on your target users’ needs, an app development company will suggest a domain.
The fact remains that when picking the right platform for your app, you must consider the costs involved in developing an Android or iOS app.
Many businesses develop profitable apps for both platforms to ensure that they successfully reach every target audience.
Extending natively
The native strategies can be used if you can extend your application.
For example, you can add levels to your gaming app or add audio lessons to your learning app.
You can make the basic version of your application free, so anyone can download and use it. You can also offer advanced features via an in-app purchase or subscription model to provide a more comprehensive experience.
Pricing based on local factors
If you decide whether to use in-app purchases, subscriptions, or funding for your app, think about local factors that can make all the difference.
Factors such as local pricing models of your competitors and cost of living differences between your region and the country they live in can be highly detrimental to the monetization model of your app.
Making your model work by analyzing statistics
Tracking your app metrics and analyzing your user statistics are also extremely important. Suppose you wish to make solid and sustainable decisions about the customers. In that case, you will need to understand their purchase patterns, revenue per user averages, new and returning customers, etc.
Regardless of how you monetize your app, its user experience will be impacted somehow. To ensure your app can monetize in the best way possible, you need to ensure that the user experience is at the top level because the active audience determines the app monetization strategy. Then what?
Mobile App Development and App Monetization: The Future of Business
The future of mobile app development must have become clear to you now that you know how apps make money. Since the beginning of this century, mobile business apps have made good money, and this trend will be sustained over the coming years.
Every year, the gaming industry makes billions of dollars in revenue. Although generic apps still earn millions of dollars and are doing very well in the industry, they are still very successful.
To keep up with the market trends, every business must implement the following technologies in their apps: Augmented Reality, Artificial Intelligence/Machine Learning, and Virtual Reality.
There is no limit to what an app can earn once submitted to the app stores, which means there are endless possibilities regarding how much it can earn. Make use of your options by rummaging through them and utilizing them effectively.
Read More About Mobile Application Development Company In USA
Frequently Asked Questions
What is the revenue model for free apps?
It is important to realize three primary ways a free app can earn money: in-app advertisements, sponsorships, and referral programs.
What are the most profitable apps?
As far as three types of apps are concerned that make the most money for the parent business, we would list them as – Music apps, Gaming apps, and Video streaming apps. As a result, each app category has an extremely high level of engagement.
What is the average payout per download on the App Store?
When Apple’s App Store generates revenue, 30% is taken by Apple, and 70% of it goes to the developers.
What is the Google Play Store’s per-download fee for Android apps?
Approximately 30% of the revenue from the Android app goes to Google, and 70% to developers.
How much money do apps make?
The answer depends. But on a very generic note, it will take some time for your breakeven to occur until you are backed by a few major brands, such as Nike or Adidas, or you have a strong community of influencers, which will ensure tremendous success.
The other option is to create multiple apps and publish them in different stores to increase the amount of money you are earning.
How much do app creators make per download?
Mobile app revenue models are a valuable means to generate revenue for your app. However, their value depends entirely on the core functionality it contains, such as the platform you choose, the expectations of your targeted audience, the app monetization model you choose, and much more.
Is it possible to make money from an app?
Any business with a digital presence and a reliable concept can make money with an app.
How Can The Synergy Works Help You With Mobile App Development?
With SynergyWorks, you can leverage the latest technologies to maximize the ROI of your business and run it more efficiently.
Through our business apps, we provide you with exceptional experiences based on the information you provide to your users.
With over 2000+ business apps delivered across all industry verticals, we can transform your vision into reality.
Let our industry experts assist your business by contacting us today.
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