App monetisation models: How do apps make money $

How do apps make money

You’ve created an amazing app. It has been downloaded over 500 000 times. You followed the advice of the previous Wonder Words blog (How to boost App downloads?) and translated your app into three other relevant languages. Download numbers continue to soar.

Given that 94% of all apps are free downloads and you are competing with 2 million other apps just on the Apple App store alone, you are probably wondering how do app developers/owners pay the bills? Paid-for downloads are at a historic low level, so the app industry has been forced to evolve to monetise apps.

A number of other app monetisation models have since come to the forefront. Listed below are just some of the more popular ways that app owners/developers are using to monetise their loyal following.

  • Selling products: You can either sell branded merchandise related to your app, or the merchandise of another established company and receive a percentage of sales. The target market of your app will point you in the right direction in terms of which companies to approach.
  • Sponsorships: This model takes the earlier monetisation model one step further. There are a number of different approaches to this model. One popular approach is where you white-label your app and it looks like the sponsor’s app. The sponsor will pay you a fee for your effort.
  • Email marketing: Email marketing operates in a similar way to web marketing. You collect email addresses from users who are interested in your product or service and market products to them.
  • Subscriptions/freemium models: The user is allowed to download the app for free and use certain functions. He/she needs to pay for the full version or for added functionality. This works well in the world of gaming – “charging for a bigger sword”.
  • In-App purchases: Similar to the previous model, you charge a fee for certain functionality. There are subtle differences compared to the previous model.
  • Amazon Underground: Amazon pays developers/app owners based on the amount of time your Amazon Underground app is used. This is a move by Amazon to entice Android listed apps to also list on Amazon Underground. For those who are not aware, Amazon Underground is the latest offering to compete with the Apple App Store and Google’s Android.
  • Advertising: Like Google, a lot of app owners are using advertising to generate revenue. App advertising is attractive for a lot of advertisers due to the target audience appeal.

As the industry gets more creative, we are sure that other monetisation models will emerge. App owners need to bear in mind that translating your app also means that you can appeal to users and target companies in totally different markets irrespective of the monetisation model adopted. An English originated app that has been translated into French and has successfully gained a following in France can be very attractive to a French retailer wanting to appeal to your loyal following. The end result is that the app owner has managed to double the size of his/her target market purely through the translation of the app!

Picture reference: www.marketingland.com