Ever since smartphones and other devices became publicly accessible, apps have become an integral part of our everyday lives. As of now, there are more than 8 million apps available for download. You can access most of them through Google Play Store, Apple App Store, or Amazon.
No matter what you need, there is an app that caters to those needs. You can manage and monitor your finances, you can listen to podcasts and music, you can use geolocation services, you can find out about products and services, and so much more. You can take photos with various filters and features, you can send text messages, voice messages, around the world. Suffice it to say that you can do everything that you want by using the proper app. If you can imagine it, you will find an app for it.
Most of the people use multiple apps throughout the day. Some apps are hugely popular like Facebook, Snapchat, TikTok, and more. And then others cater to a very specific clientele.
Apps are a great way to increase your income. People spent more than $120 billion on apps in 2019 alone. With the global pandemic and the restrictions due to it, the average app spend is going to be more than that.
When most businesses create an app, they don’t think much about monetization. Making an app and using it to increase your income are two different things. The question always arises, ‘How can we monetize our app?’
There are a lot of ways that you can monetize your app. Here we are going to discuss those ways.
How to Make Money With an App
There are two basic models of app monetization.
- Direct Monetization
- Indirect Monetization
Most of the apps that you find online follow the direct monetization model. Contact any app development agency and they will advise you to go for direct monetization tactics. But that doesn’t mean that indirect monetization doesn’t work.
App Monetization Models and Strategies
Here are the various ways that you can monetize your app and make money with it.
1. Paid Downloads
One of the most common ways to monetize your app is to charge the users a small fee to download the app. It is the simplest way of monetization. The question that arises here is how much can you charge for your app. That will depend on the type of app that you have, the type of work that you do, and what your competitors are charging, among other factors. According to Statista, most of the apps in the App Store and the Play Store charge less than a dollar.
It is a simple and straightforward way of monetization but it also has its drawbacks. First of all, a lot of users will choose not to download the app when they find out it is a paid app. On the other hand, the users who do pay for this app will be highly engaged and they will want the most out of their money.
2. In-App Purchases
The second way of app monetization is through In-App purchases. You don’t need to have a paid app to do this. You can do this with free apps as well. You can use this model for virtual products like games or physical products. For example, a lot of games charge users for virtual coins that they can use to buy arsenal, car parts, and more depending on the type of game they are playing.
A great example of this type of app monetization is Pokemon Go. According to statistics, Pokemon Go has made more than $3 billion from in-app purchases.
Another example is branded merchandise. No matter what type of business you have, you can sell branded merch through your app and get paid for it.
Subscriptions are a great way to make sure that people make payments regularly. You can do that with both Google Play Store and Apple App Store. Once users sign up for a regular subscription, they will be automatically charged each month until the time they cancel their subscription. The subscriptions can be done every month as well as annually or quarterly. Most apps offer a low amount for annual subscriptions and a high amount for monthly subscriptions.
4. Freemium Model
The Freemium model stands somewhere in the middle of the subscription model and the in-app purchases model. You can put it into either category. The word ‘Freemium’ is a combination of two words:
- Free and
The first step in this type of monetization model is to offer the app as free to all users. You also offer a better version of the app to users who want to get on the premium bandwagon. So, you will have two different versions. The free version will be simple and basic while the premium version will have additional features and capabilities.
A great example of this is the Pandora app. Pandora is an internet radio service and it offers multiple plans to the users that include a simple and basic, free version. The free version will have ads in between and the premium version will not. You can listen to your music without any interruptions.
Ads are a great way to monetize your app. What you do is create real estate on your app and then sell it for ad space. You will have encountered a lot of apps that use this model. According to studies, mobile app advertising is one of the best ways of making money with your app. You can display various types of ads like text, videos, pictures, pop-ups, and more.
There are also various methods that you can charge like:
- CPC (cost-per-click)
- CPI (cost-per-install)
- CPA (cost-per-action)
- CPM (cost-per-mile)
- CPV (cost-per-view)
Making money from your app is not as complicated as it has been made out to be. You can easily contact your app development agency and ask them to include support for one or more of the above models in your app. You just have to realize which type of model works best for you.