How mobile apps can make you money

How mobile apps can make you money

You need to spend money to make money, as the saying goes. So monetising your model and creating a mobile app to generate revenue for your business is worth your investment. Done right, ads, subscriptions, and in-app purchases, can all bring you a long term source of income.

Gavin Jones
0 min read
June 1, 2018

As the mobile app market grows at breakneck speed, with ever-changing user demands acting as pacemaker, businesses are finding it harder to grab their share of the spoils. But with global mobile app revenue set to smash through the £135b mark by 2020[1], if you get your app right, there’s definitely money to be made. And now’s the time to get in on the action.

The three main revenue streams that any app should look at taking advantage of are: paid-for, free (freemium) with in-app purchases, and free with ads. So if you’re taking your first tentative steps through the app monetisation minefield, here’s the lowdown on each.

Paid-for apps

Paid-for is an area where you need to have 100% confidence in your app right from the get-go. In 2017, global paid-for mobile app revenue was responsible for just £21m[2] and 24% of the market share. So if you want to charge for your app, you’ll need to have a rock solid strategy to get people downloading in droves.

Every update, feature, and exclusive piece of content is expected to be free, so you’ll have no additional revenue to fall back on, instead relying on app downloads by new customers. But if you can manage those expectations, you could have a winner on your hands.

Paid-for apps often feature in-app purchases as well, though this isn’t a popular model as it only accounts for 5% of the global market share. And that’s down to users feeling aggrieved at paying for extra content or features on top of the app price itself. But it can work if the additional paid-for content is justified by the value it gives the user, especially in a niche market.

Free (Freemium) apps with in-app purchases

With 71% of the global market share, the freemium app model gives your users the best mix of both free and premium content - and it’s lucrative, with in-app revenue set to reach £53b by 2020[3].

The same app is available to every user, but with limited features or content. By offering optional in-app purchases to enhance their experience, it diminishes the users pain point of paying extra, making purchases more likely. And it gives you the chance to prove your quality and value.

Subscription-based revenue

But if your free app is content-based, you can offer users a subscription service to access paid-for only content. Paying a monthly fee, the subscription lets users read as much of your exclusive digital content as they like. Also, there could be an opportunity for subscribers to purchase a physical copy of the content through the app.

Comic book website, Comichaus, sell comics through their online store. Looking to explore the possibilities of an app, they came to us to see if we could create a mobile experience that offered a monthly subscription fee for users to access their comic book database.

While we achieved this for them, we also integrated a stream and save feature so each title could be saved to the users device at any time to read later if they chose to. Implementing their monthly subscription for £3 made it affordable for users and offered Comichaus and comic creators a more consistent revenue.

To generate further revenue, Comichaus have chosen to include non-intrusive native ads that cover future app development costs. They also offer a second subscription alternative at £5 per month if users want the app and their content 100% ad-free.

Free apps with ads

If your free app doesn’t offer anything in the way of extra features or content, the use of ads can be profitable. Banner ads, native ads, and video ads, are all potential money makers, but your app needs to be downloaded and used in high volume to achieve moderate success.

But it’s video ads, appearing at natural points of app use, like the end of a game or article, which now account for up to 33% of mobile app revenue[4]. And full-screen rewarded video ads, where users receive in-app bonuses for watching a video in full, are most effective of all.

But keeping your videos short is vital. The viewer abandonment rate is high, and the majority of viewers won’t watch beyond 10 seconds.

Understanding all the criteria needed for your mobile app can be overwhelming. But we can help you get the growth and income you want, by focusing on the method of revenue you need.

Call us today on 01752 395 404 or get in touch to give your mobile app a head start. Or read more about developing your app to streamline your business processes, or market your company effectively.

Next up in this series, read our blog on "How to use a mobile app to market your business".

Alternatively, to learn more about monetising apps, read about in-app purchases here.



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