Mobile applications are projected to hit $581.9 billion this year in revenues. The surge is due to the increase in many businesses seeking to maximize their growth through mobile applications. This means one thing- the mobile app boom is far from over. A quick search on your app store and you will have an array of mobile apps that are mostly free. According to Google Play, 98% of revenues worldwide from the mobile app market are generated from free apps. If these apps are free, then how do developers or distributors earn money?
How Do Apps Make Money?
A study in 2016 predicted that the mobile app market and its revenue would see a tremendous increase in the coming years, which has precisely been the case. Revenue expectations are far exceeded and continues to do so. Whether a free or premium app, the goal has always pointed to one thing; making money for business owners and developers. Despite this, you don’t start and automatically start earning money. To generate cash from the mobile app platform, you will need to find the right idea, precise tools to deploy, and considerable effort. Consequently, there are several ways to earn money by launching a mobile app.
How to Make Money from Mobile Apps
Studies have revealed that the most popular mobile app monetization techniques used by the top app distributors. Ranking high among the most effective methods are:
Advertising
Advertising is the most common and most straightforward method when you want to make money on launching mobile apps. This requires you to show ads inside your mobile application and get paid by a third-party ads organization. With this method, you get paid each time your ads are displayed, click on the advertisement, or when a user installs the advertised application. According to a 2017 report, mobile app advertising generated $190 billion and is expected to eclipse $280 billion by 2020.
Consumer in-app purchases
This method is used to monetize free mobile apps. In-application is straightforward. Purchases are made directly from within applications and often used to unlock additional features like power-ups and access restrictive levels. Popular mobile games like Angry Birds, Clash of Clans, and so on infuse their gaming experience with in-app purchases. This method can be quite intrusive, although many have predicted that in-app purchases will dominate monetization soon.
Subscription
By subscribing, distributors offer free content within the apps but for a limited period and later charge subscription to permit users to access full content without limitation. This monetization strategy is most effective with media streaming, cloud services, and online news services. Subscription-based monetization helps app distributors earn money through recurring fee rather than a one-time payment.
Merchandising
Selling merchandise within mobile apps is an innovative strategy to make money. Many e-commerce businesses have adopted this approach, like Amazon. Such companies build free versions of paid apps and sell their physical goods like shirts, toys, and smartphones. Like Merch by Amazon, distributors create their fine art and upload to their platform and market their items.
How Much Money Can An App Make?
Revenues generated by apps depend on three factors: the type of application, the strength of the selected monetization approach or method, and knowing your target audience. To successfully achieve this, you need to understand who your target audience is, their needs, and the amount they are willing to pay for your app.
To appreciate how much you’ll earn from your mobile app, you first have to decide your app’s platform. This will significantly impact your earning potential due to the differences in popularity of the various mobile platforms and market penetration. However, 99% percent of new smartphones operate on the Android and IOS platforms, with the former having a more significant market share of 86.1% as of 2019.
There is a great deal of cash in mobile apps. However, most of this cash is earned by individual apps, while others earn no money. This makes it challenging to figure out how much you’ll achieve with your app due to app types’ disparities and how much revenue they can generate. For instance, the best 200 apps make $82,500 on average per day. Gaming applications additionally make around $22,250, while entertainment apps generate $3,090 every day. Interestingly, the top 800 mobile apps create about $3,500. This makes it highly impossible to solidly say how much a regular app can make in earnings.
The future of mobile is exciting; many incredible ideas are waiting to be discovered to make life simpler. These ideas can turn into the spine of a great business. Contact Exemplary Marketing via (708) 407 6827 to make your dream a reality.