How Do Apps Make Money?

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Last Updated on June 11, 2016 by Work In My Pajamas

With over 80% (and rising) internet users owning smartphones, Fortune 500 companies and entrepreneurs are trying to get a piece of mobile monetization pie by creating apps for smartphone users. I personally have come with several ideas for apps only to realize someone else beat me to the punch on the idea. But that doesn’t mean that I (or you) can’t have the same idea and make it better!

Unfortunately, unless you are a programmer and have technical experience, you will have to invest some money into having your idea created into an app. And you’ll want that app to work on both iPhones and Android operating systems (OS), so basically you’ll have to build two apps. Some people still use the Blackberry OS and/or the Windows mobile platform, but I don’t recommend building your app for those platforms until after you see how popular your app is and if you get a lot of requests for such. Now even video game consoles, such as XBox One, Wii U and Playstation 4 have their own app stores, but again I’d hold off creating an app specifically for them.

If you don’t have money to invest, you may be able to find a development company that believes in your product and is willing to work for commission made on the product, either monthly residual and equity for when you sell your app. Because isn’t the end goal for everyone – to sell to someone bigger and better for millions of dollars?

It is estimated that apps will bring in a total global revenue of $46 billion this year, up from $25 billion in 2014.

So just how do apps make money?

  1. Charge for download. I don’t recommend this unless your app is really useful like the Car Locator app that can charge $3.99 a download. Most apps are free to download, which I recommend, to get the user.
  2. In app purchases. Once you get the user addicted to a game, they will want to get ahead of the game by purchasing tokens, extra lives, farm animals, etc. Candy Crush was reportingly making over $884,000 a month in app purchase alone.
  3. Rewarding offers. These are basically CPA offers where the users can complete a survey or watch a video in return for those extra tokens. You then get paid for those completed offers. It’s a win/win for all involved.
  4. Advertisements. These can be banner ads at the bottom or top of the screen or even pop-ups over the app. They may pay for banner impressions, click-throughs or a combination of both. I know I’ve clicked that banner of the bottom of the 2048 game several times while swiping my numbers. And I have to “X” out of several pop-up ads before I can play my solitaire game on my phone.

Many of the successful apps use a combination of the different ways listed above to make money. Be sure to track analytics on your users on how you’re making money so when that bigger, better company approaches to you buy your app, you’ll be ready to retire.

Thanks to the web development company VironIT for providing informative support for this article. 

1 thought on “How Do Apps Make Money?”

  1. Making money with Apps is something that I started looking into last year, and something which I’ve continued to do so since. It’s hard to know where to get started in a lot of instances, but it’s definitely something that’s interesting to do. The main issue that I’ve found is that creating an App alone isn’t enough. You’ll likely get some downloads, but to make any real money it needs to include things like social sharing and be well promoted on a variety of websites.

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