I get asked a lot about how much money someone can make with their app idea.
I never answer that question, since it’s impossible to answer. The market is finicky . . . and you need to do a lot of marketing after an app is released. So much is outside of my control after an app is actually produced.
However, I don’t mind telling people what I make from my apps and how I do it;
Despite the success stories you read about from time to time, earning revenue from apps is not super-easy. But it’s definitely possible.
When developing an app, one thing you need to think of very early on in the development process is how you will actually monetise the app. I know from experience that coming up a with a monetisation method too late in development can lead to disaster (or at least a lot more development time that could have been avoided).
There are 4 ways we use to earn revenue from our apps. So far as I know, they are the only real ways to make any money at all!
Placing ads in your application is fairly straightforward. This doesn’t mean you need to start cold calling companies and start asking if they want to buy advertising space in your application as you would if you worked for a newspaper or magazine (although it would bring in more revenue if you took this approach) – the ad networks take care of that for you.
There are dozens (maybe even hundreds) of ad networks you can subscribe to that will allow you show ads from their networks. Some of the most popular ones we’ve used are Admob, Chartboost, Revmob, and InMobi.
You can use banner or interstitial ads (or both). Interstitials (full page) ads pay more. If you use a video ad network like AdColony or Vungle, they pays a lot more than text or image ads you get from other networks.
Ads work great for high-traffic applications.
An ideal candidate for an app with revenue from ads is an information app which users will use frequently (like daily).
2. App Sales
Of course, you can still just “sell” your application. People are still willing to buy apps and not have to worry about extra charges or annoying ads.
Many app developers are no longer using sales to generate revenue and are moving purely to in-app purchase. My experience has been that there is still a lot of money to be made from pure app sales.
Ear Spy, our biggest app, still makes a nice chunk of revenue from pure app sales.
A word on sales here . . . iPhone and iPad users are much more likely to spend than Android users. However, as Google Play and Android continue to grow, we’re seeing revenue build on both platforms.
App sales work only in conjunction with a free version of the app. Every time we’ve released a pay app without a free version . . . you could almost see the tumbleweeds rolling past the app description pages. Users want to at least be able to try an app before shelling out cash for it.
Also, keep in mind that both Apple and Google take 30% of your price. That’s huge.
3. In-App Purchases
A lot of app developers are moving to a purely in-app purchase model. This allows users to try the game or app and then purchase aspects of it if they like it. It also has the potential for generating a lot more revenue than a pure sale.
There are two types of in-app purchases. There are both consumable and non-consumable products.
A non-consumable product is something the user can buy once and might do something like unlock a feature of the application. When the user moves to another app, that feature follows them and you need to allow them to restore that purchase.
A consumable product is something the user “uses-up” and has to replenish. An example is in-game coins that a user can spend on game assets (like new characters, tools, etc). This means that, as an app user, you can keep offering new features and allowing users to purchase them and keep spending within your app. This revenue can far exceed the amount you can make in a direct sale of a “pro” version.
4. Brand building
Of course, you could also use your app to build your brand.
Every Overpass app has a splash screen with our logo and url (and a pithy little quote). More than 99% of our users never make a purchase. Most don’t click on ads either. So, what can you do with them? At the very least, I want them to know about Overpass.
Also read: How to Build Your Brand With a Mobile App
Plus, the size of the app market is much smaller than Google. Our brand is much more likely to be found there than on the entire web.
We have clients that have also created apps as a way of building awareness of their brands too. Their focus is on creating the best products that share the quality of their current offerings. They can even bring customers to other platforms where the app markets do not take a 30% cut of profits.
I love it when I get a call or email from someone interested in creating an app . . . because they’ve seen one of our apps and liked it. Our apps generate revenue and spread our brand.
There are probably other ways to make money with apps that we haven’t even tried yet. The industry is young. There’s still much to do.
I make money from apps every day. It can be done. If you want to know more details about my own situation, give us a call. I’d love to tell you how it’s working out for me.
How will you earn revenue from your app?
Want to talk further? Give us a call, we’re all-in. Let’s build it together.
- How Android Took Over the World: A Brief History
- A Minute of Overpass: Guaranteed App Success
- Why Would My Business Need An App?