How to Make Money with an App

How do you make money from an app? First and foremost, your technology should serve the needs of your users and solve their problems. Assuming that is being done, below we cover common monetization strategies. Ultimately, the best strategy is the one that fits your business goals and user needs.

Charge for use

Charge for use is a straightforward monetization strategy where users pay to download and use your app. This is a good option for apps that offer significant value to users, such as productivity tools, games, or educational apps.

To make money with this strategy, you need to set a price that is fair to users and profitable for you. You also need to make sure that your app is worth the price, with features and benefits that users are willing to pay for.

Here are some tips for making money with the charge for use strategy:

• Set a fair price. Consider the value of your app and the pricing of similar apps in the market. You don't want to set the price too high, or users will be less likely to download your app. But you also don't want to set the price too low, or you won't make enough money.

• Offer a free trial. This is a great way to let users try your app before they buy it. If users like your app and find it valuable, they will be more likely to purchase it after the free trial ends.

• Offer different pricing tiers. This can be a good way to make your app more affordable for different types of users. For example, you could offer a basic version of your app for free, and a premium version with additional features for a fee.

• Promote your app. Let potential users know about your app and its benefits. You can promote your app through social media, search engine optimization (SEO), and paid advertising.

Examples of apps that use the charge for use strategy:

• Microsoft Office

• Adobe Photoshop

• Hubspot

• Angry Birds

• Candy Crush Saga

Revenue share

Revenue share is a monetization strategy where you partner with other businesses to generate revenue from your app. This is a good option for apps that have a large user base and can offer value to advertisers.

There are two main types of revenue share partnerships:

• In-app advertising: You allow advertisers to display ads in your app. You can earn revenue from in-app advertising on a pay-per-click (PPC) basis, or on a cost-per-thousand impressions (CPM) basis.

• Affiliate marketing: You promote other businesses' products or services in your app. When users click on your affiliate links and make a purchase, you earn a commission.

To make money with the revenue share strategy, you need to choose the right partners and negotiate favorable terms. You also need to make sure that your app is engaging and has a high user retention rate.

Here are some tips for making money with the revenue share strategy:

• Choose the right partners. Partner with businesses that have a target audience that overlaps with your app's users. You should also choose partners that offer high-quality products or services.

• Negotiate favorable terms. When negotiating with partners, make sure to get a fair share of the revenue. You should also try to negotiate a long-term deal.

• Make sure your app is engaging. Users are more likely to click on ads and make purchases if they are engaged with your app. Make sure your app is well-designed and has features that users will find valuable.

• Promote your app. Let potential users know about your app and its benefits. You can promote your app through social media, search engine optimization (SEO), and paid advertising.

Examples of apps that use the revenue share strategy:

• Facebook

• Google Play

• YouTube

• Instagram

• Twitter

Advertise

Advertising is a monetization strategy where you allow advertisers to display ads in your app. This is a good option for apps that have a large user base and can offer value to advertisers.

There are many different types of ads that you can display in your app, including:

• Banner ads: These are rectangular ads that appear at the top or bottom of the app screen.

• Interstitial ads: These are full-screen ads that appear between app screens.

• Video ads: These are short videos that can be played before, during, or after app use.

• Native ads: These are ads that are designed to blend in with the content of your app.

You can earn revenue from advertising on a pay-per-click (PPC) basis, or on a cost-per-thousand impressions (CPM) basis. PPC means that you earn money when a user clicks on an ad. CPM means that you earn money every time an ad is displayed to a user.

To make money with the advertising strategy, you need to choose the right ad networks and negotiate favorable terms. You also need to make sure that your app is engaging and has a high user retention rate.

Here are some tips for making money with the advertising strategy:

• Choose the right ad networks. Partner with ad networks that have a good track record of delivering high-quality ads and paying publishers fairly.

• Negotiate favorable terms. When negotiating with ad networks, make sure to get a fair share of the revenue. You should also try to negotiate a long-term deal.

• Make sure your app is engaging. Users are more likely to click on ads and make purchases if they are engaged with your app. Make sure your app is well-designed and has features that users will find valuable.

• Promote your app. Let potential users know about your app and its benefits. You can promote your app through social media, search engine optimization (SEO), and paid advertising.

Examples of apps that use the advertising strategy:

• Facebook

• Google Play

• YouTube

• Instagram

• Twitter

Sell data

Selling data is a monetization strategy where you collect data from your users and sell it to other businesses. This is a good option for apps that collect a lot of data, such as location data, demographic data, and behavioral data.

Businesses use data to improve their products and services, target advertising, and make better business decisions. As a result, there is a high demand for data, and app developers can earn good money by selling it.

To make money with the sell data strategy, you need to collect data from your users in a legal and ethical way. You also need to make sure that you are compliant with all applicable data privacy laws and regulations.

Here are some tips for making money with the sell data strategy:

• Collect data with user consent. You need to obtain permission from your users before collecting and selling their data. You should also provide users with information about how their data will be used and sold.

• Anonymize your data. You should anonymize your data before selling it to other businesses. This means removing any personally identifiable information (PII) from the data.

• Sell your data to reputable businesses. You should only sell your data to reputable businesses that have a good track record of protecting user privacy.

Examples of apps that use the sell data strategy:

• Facebook

• Google

• Amazon

• Twitter

• Microsoft

Get acquired

Getting acquired is a monetization strategy where you sell your app company to another company. This is a good option for app developers who want to exit their business and earn a large sum of money.

There are many reasons why companies acquire other companies. Some companies acquire other companies to expand their product offerings, enter new markets, or gain access to new technologies. Other companies acquire companies to eliminate competition or gain access to a company's customer base.

To get your app acquired, you need to make your app attractive to potential acquirers. This means having a successful app with a large user base and strong revenue growth. You also need to make sure that your app is well-managed and has a good team in place.

Here are some tips for getting your app acquired:

• Build a successful app. This is the most important thing you can do to make your app attractive to potential acquirers. Your app should be well-designed, have a large user base, and generate strong revenue.

• Focus on revenue growth. Acquirers are looking for apps that are growing rapidly. If you can show that your app's revenue is growing quickly, you will be more attractive to potential acquirers.

• Build a good team. Acquirers want to buy apps with strong teams in place. This means having a team of experienced and talented developers, designers, and marketers.

• Network with potential acquirers. Attend industry events and meet with potential acquirers. Let them know about your app and why it would be a good fit for their company.

Examples of apps that have been acquired:

• WhatsApp (acquired by Facebook for $19 billion in 2014)

• Instagram (acquired by Facebook for $1 billion in 2012)

• Waze (acquired by Google for $1 billion in 2013)

• LinkedIn (acquired by Microsoft for $26.2 billion in 2016)

• Fitbit (acquired by Google for $2.1 billion in 2019)

Other ways you can make money from an app

Freemium

This model offers users a basic version of the app for free, but charges them for premium features or content. This is a popular model for games, productivity apps, and educational apps.

Subscription

This model allows users to access the app for a monthly or annual fee. This is a good model for apps that provide ongoing value to users, such as streaming services, news apps, and fitness apps.

In-app purchases

This model allows users to purchase items or services within the app. This is a popular model for games, social media apps, and e-commerce apps.

Physical goods and services

This model allows users to purchase physical goods or services through the app. This is a good model for apps that are related to specific products or services, such as food delivery apps, ride-sharing apps, and travel booking apps.

Transaction fees

This model charges users a fee for each transaction that they complete through the app. This is a good model for apps that facilitate transactions, such as payment apps and marketplace apps.

In Conclusion

The best way to make money from your app will depend on the type of app you have and your target audience. It is important to choose a monetization strategy that is aligned with your app's value proposition and that your users will be willing to pay for.

You may also want to consider using a combination of monetization strategies. For example, you could offer a freemium app with in-app purchases, or a subscription app with advertising. This can help you to maximize your revenue potential.

No matter which monetization strategy you choose, it is important to focus on providing a high-quality user experience. This will help you to attract and retain users, which is essential for making money from your app.