Do Mobile Apps Make Money?

Do Mobile Apps Make Money?

Want to make your first million as a mobile apps developer? Don’t sell, serve them out for free!

Top grossers such as Pokemon Go are doing astronomically well on both at the iOS iTunes app Store and Android’s Playstore.

Others include Tinder, Bee Brilliant, Mobile Strike, Netflix, Pandora and Clash of Clans just to mention a few.

The question is… what do all these apps have in common?

They’re all free downloads!

Okay, wait… that doesn’t make any sense!?

How are they making millions from dishing out free apps left, right and center?

Two things:

  1. Advertising and
  2. In-app purchases

Monetizing your app is very simple, but it requires you to have a smart strategy.

First, you have to study your market and try to familiarize yourself with your audience as well as your competition.

Then, of course, you need to dig around and find out whatever options you have at your disposal that you can implement effectively to generate revenue using your app.

Let’s take a closer look at how these two app monetization strategies work…

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Serving In-App Ads

There are numerous mobile advertising channels that mobile app users can use to generate revenue.

In addition to the popular AdMob from Google, there are more like Chartboost, Adfonic and Millenial Media among others that can help you generate revenue through advertising from within your app(s).

Some of these tools come with very helpful features to help you track the performance of your inbuilt ad network.

Now, just like in Adsense, the adverts also come in different sizes and can be positioned differently on the mobile screen for maximum effect that encourages click-throughs without looking so “salesy” and annoying/boring!

Serving In-App Ads

You can get paid for impressions, ad formats (e.g. text, image or video…), click-throughs, and also the countries where each particular user comes from.

Native ads do better. Ad placement is very important; this includes both positioning and timing!

Please ensure that your ads run in between level or chapter breaks to avoid interrupting the user experience as they interact with your app.

Provide In-App Purchases

Besides selling apps directly for money directly from the word go…this is the largest revenue earner for app developers.

And this is why most top grossing apps are free!

You can either provide your audience and users with an option to go premium for more useful access or sell features (especially in games…) to help them advance through the exciting levels.

Voted the hottest app by Forbes, Tinder is one of the “freemium” apps offering the in-app purchasing feature to allow its users extend their user experience while trying to make connections (love or friendships…).

This model of in-app purchasing allows users to make one time purchases of premium access.

Provide In-App Purchases

The other model where expiring consumables are sold within apps is commonly found in gaming apps such as Candy Crush Saga or Mobile Strike. Users have to buy more of these consumables once they are used up.

The last in-app purchasing model provides the users with an opportunity to renew their subscriptions automatically.

The premium features are only enjoyed for a specified amount of time until the user pays more subscription fees.

Some of the apps offering this feature to users first give users an opportunity to use the premium features for sometime before blocking them off until the users pay for the features or services to be reactivated.

Success With App Monetization

The first step towards any money making venture is always research. As mentioned earlier, you need to get your facts right before picking a monetization strategy for your app.

Know, your market, research your competition and analyze their apps for any missed opportunities that you can capitalize on.

Remember, user experience is very important and people don’t want to feel like your apps are all about shoving ads down their throats or forcing them to buy stuff.

Please note that only a percentage of your audience will buy into your sold features or click your ads. The idea is to make your sold features desirable and be subtle with your ads.

Collecting data from your app is also very important.

This information combined with user feedback gives you a better perspective of what needs changing from carefully examining the tendencies of your app’s users and finding out whatever bugs that need fixing.

The most important thing you MUST know about successful in-app monetization is that it should be woven into the app to appear and feel like a natural part of the app – part of the overall user experience.

Lastly, be innovative. Find better and refreshing ways to engage your audience through your app(s) and you’re guaranteed to take your app revenue through the roof!

So, how do mobile apps make money?

Well, now you know…

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12 comments on “Do Mobile Apps Make Money?

  1. This is such a relevant and important topic these days because of the huge shift to mobile. I always have heard that apps can make a tremendous amount of money for the right people but you simplify this in a way that actually makes it seem much more attainable for the average person. I have always shied away because I felt it required such a higher level of technical knowledge. Than you for sharing because now I certainly intend to research this opportunity further.

  2. Very informative post, Chris. I used to wonder how developers of free apps made money, but this explains plainly how this is done. No wonder ever time I beat a level in Angry Birds or Fruit Ninja an ad pops up. Sometimes it does get annoying, though.

    If I were to create an app, apart from placing the add in between levels, is there another place that I could put them that would be as effective?


    1. No idea to be honest with you Joeka – I’ve never made one! But I have noticed them getting a lot more creative with ad placement these days…

  3. Hi Chris,

    Excellent article, loved reading it. I gotta say free ads do make money. I know as I have ended up upgrading a few times, particularly tinder, since you mentioned it.

    The key, in my humble opinion is to make the upgrade relevant and interesting to potential “upgraders”. For me, matter of efficiency and the ability to make connections in my next city of destination by using tinders passport feature that is only available as an upgrade, that allows me to connect with locals and have locals show me their city and places they hang out and a much better experience of that particular destination had I not upgraded.

    See how a simple app like Tinder made it relevant for me to upgrade?

    It is in my humble opinion the same for any other free app, make the upgrade option relevant and viable for existing users, and of course affordable.

    1. All very good points there Derek – making the upgrade option relevant is a very important move by the app designers. As you also point out – the price has to be reasonable as well.

  4. Hi Chris,

    Thanks for this article. It made me think about this option. Going mobile is very important these days. Your article is very timely in providing ideas and options to your readership on this topic.

    When going mobile, do you recommend focussing the mobile app to run on a specific platform (Apple or Android) or a specific type of mobile device (Ipad or smart phone)?

    Kind Regards,

    1. In think so David, especially if you are a newcomer to the app making world. Of course, popular apps are available on all platforms but I’m afraid that sort of developing is well above my pay grade!

      Are you interested in making a few apps?

  5. Hi Chris,

    This website definitely captured my interest. I am also a gamer at heart. I am a big fan of Dota 2, WSOP, Clash of Clans and many more! I have also considered to create a mobile game app that can be monetized through in-app purchases. I like your website. Very informative and a lot of relevant contents too. Keep em posting Chris! I might come back to your website when I decide to create a mobile app 😉

    Thank you for sharing your knowledge. Cheers!

    1. Well good luck with that app development Joshua – don’t forget to pop back here and get a bit of free advertising when the app is completed! 🙂

  6. Thanks for sharing such an informative article. I’ve been toying with the idea of trying out some apps over to earn with over the last few weeks – this helps a lot!

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