The mobile application development services industry serves a huge potential to businesses to earn millions of dollars. However, not every business mobile application earns an equal share of Android and iOS market revenue.
Despite the similar mobile application development process, not every business gets to earn billions of dollars. This is making startups who are yet to enter the mobile industry, encounter questions like, “How do apps make money?”, “how do you make money from an app?”, “What are some successful app monetization strategies for business” etc.
Now, diving into the world of app monetization requires a strategic approach, as the landscape is rather competitive. Understanding the different revenue models and how they fit with your app’s overall purpose and audience is key to unlocking its earning potential. Whether it’s through in-app purchases, subscription services, advertisements, or a freemium model, choosing the right monetization strategy can significantly impact your app’s success.
But before we dig into the details of multiple monetization strategies you can employ to get maximum ROI, let’s look at a few statistics about app development and money making apps.
Current Market Statistics on App Monetization You Must Know
Understanding app monetization is crucial in today’s vast mobile app market. With millions of apps on Google Play and the App Store set to lead in revenue, multiple statistics highlight key trends that businesses need to comprehend. Let us look at them in detail below.
- As per the survey for July 2022, there are over 2.65 million apps placed in Google Play store. It is also studied that gaming android apps are most likely to dominate by 2024, accounting for over 70% of the total app revenue in Google Play Store.
- As for the App Store for iOS based applications, the number of apps available on the platform are over 2.18 million recorded in the second quarter of 2022. There is a 5% increase in the total app revenue compared to the previous quarter.
- In the first quarter of 2022, the combined Apple Store and Google Play Store app downloads amounted to an estimation of 36.8 billion. This shows an increase of 2% as compared to its previous quarter.
- Coming to app monetization stats, 8% of apps from the US are monetized by paid apps while 25% of the US generated app revenue includes Ads (video ads, popup ads, display ads etc.).
- Revenue generated via in-app advertising is expected to increase by approximately 4% between 2021-2022. Moreover, the in-app purchases are also expected to increase by 8.4% between 2021-2022
Things to Consider Before Developing Money Making Apps
Before you invest into designing and developing your app, it is important to take time out to research and list down a few factors. While you can conduct your own research, it would be best to seek technical guidance from a reliable mobile app development company or industry expert that has the in and out insights on money making app development.
When looking out for these factors, make sure you include the top four considerations listed below before actually developing your app.
1. App purpose
Prior to choosing any of the monetization models, you need to understand the type of your application. What and how does your application tackle any issue?
When focusing on how do apps make money, the app purpose plays a pivotal role. Answer these questions to get a detailed understanding of your app purpose.
- What problem does your app target?
- What mobile apps development service do you need to build a successful app?
- What could be the probable impact of your app monetization on the market?
- And how will the app be useful in serving the customers and their needs?
When you have a reasonable answer regarding the purpose, you will be able to choose a correct monetization strategy for your application; for instance, subscription models for service and content applications.
2. Target audience
Another factor that helps in determining how can apps make money is the target audience. If you are making a mobile application for the business people, it is important to go with a monetization strategy that does not waste their time. Likewise, when it comes to building an app for kids, it is good to offer a few solutions and features for free.
To effectively earn an online income from app monetization strategies, you need to examine your target audience prior to starting any plan. Who is the target audience? What do they require? The amount they will pay? To put it simply, your users should know the genuine worth to make purchases.
3. Competitor analysis
Performing Competitive analysis for your mobile app idea also contributes to making the decision related to how to make money from an app. The insights aid in getting a hint about what strategies similar applications in the market prefer and what all profits they have earned. This eventually helps with decision making.
The cutthroat competition in the market and the competitor analysis isn’t only for highlights, functionalities, and design of an application. With a proper study and knowledge regarding the competitors, you can without much of a problem discover the monetization business plan for your application. All you need to do is ask yourself certain questions like how competitors are earning? How solid are their models? Is there any loophole that can turn into an opportunity for you? Also, a solid marketing plan for your mobile app development can help you accelerate your marketing and sales.
4. Technologies
The set of technologies you introduce in your application not solely enhances the user experience and makes it stand out from the competition, but also adds to the earning from mobile apps.
Example: A traditional business mobile app monetization platform model provides developers with only 70% of the amount paid for a mobile application. Whereas, a blockchain-based application model delivers 85% of the total app profit share.
With this covered, let’s jump directly to finding different models to look into how to earn money from apps.
How Can You Choose The Best App Monetization Method For Your App?
Finding the right mix of monetization strategies for your app to make money is a critical piece of the puzzle that decides your business success. But don’t you worry, here’s a perspective to guide you through your decision making process.
1. Creating a funnel leading audience to your monetization model
Once you have an identified target audience and user persona, you can create a sales funnel that translates your traffic into revenue for your app. For instance, for a language learning app, gaming features and mini challenges and daily quizzes can be a huge hit. Once your users get hooked, you can enhance the complexity of these features and engage them monetarily.
2. Choosing platforms that suit your app best
An experienced mobile app development IT consulting services company will suggest an app domain where your target users work best. Having said that, you must keep android app development cost and iOS app development cost into perspective while choosing the appropriate platform.
In most cases, businesses develop money making apps for both the platforms to ensure all the target audience is covered.
3. Using native extensions
If you can extend your application, for instance, adding levels to your gaming app or adding more audio lessons to your learning app, you can use native strategies. This means the basic version of your app can be free and available to all. Further, you can use the in-app purchase or subscription model to provide advanced features.
4. Considering local factors when pricing
When you are finalizing your pricing structure via in-app purchase, subscription or funding, consider local factors that create a huge difference in your app revenue. Factors such as cost of living differences, cost of competing apps and local pricing models of your competitors can impact your app’s monetization model big time.
5. Analyzing statistics to make your model work
Another huge factor to consider is tracking app metrics and analyzing your user statistics. You need to understand their purchase patterns, average revenue per user, new and returning customers etc. to make strong and sustainable decisions.
Your app monetization strategy in any form will impact the user experience in some way. Since the app monetization strategy is calculated based on the number of active audience, make sure to keep your app’s user experience at the top level. What else?
Future of Business Mobile App Development and App Monetization
Now that you know how apps make money, you must have gotten familiar with the future for mobile app development. Over the years business mobile apps have seen good money and this will for sure continue in the coming years as well. The gaming apps are making billions every year, however, the generic apps are still earning millions and doing well in the industry. Augmented Reality, Artificial Intelligence/Machine Learning, and Virtual Reality are the technology trends that every business must implement to their apps to stand ahead in the market.
In conclusion, there are endless possibilities related to how much an app earns when you submit it to stores. You only have to rummage through your options and make the best out of it.