We should face it: you are not going to develop a mobile application without aiming to get the revenue from the app directly or by promoting your business. So philanthropy is not in question here at all.
The problem is more complex. Which way to choose: giving your app for free and earn from in-app purchases or sell it at $0.99 and earn from the number of downloads?
Here we are going to argue not on whether to charge for your app or not, but on the ways you can earn money and factors that could influence your decision.
Many business owners released their apps at $0.99 and their apps could hardly pay off, and those managed to get a surplus profit in a week by in-app purchases.
We have also asked experts from the TOP 30 Mobile Advertising Influencers to comment on the question “When will mobile app pay off?”, so be patient not to miss their advice.
Strategies to make money of the app
We assume you’re an active smartphone user, but have you ever thought on the ways the producers of your app earn?
You will easily answer this question if your apps are all purchased. And it doesn’t really matter you paid $0.99 or $10 for them. Another case is when you get the app for free, but it offers you plenty of in-app purchases.
Moreover, mobile apps have become the easiest and fastest way to sell goods and services, reach your target audience, communicate with potential customers and increase the loyalty of existing. But in this article we’d like to be more specific with the tools and strategies that you can use to make money of your app.
Paid downloads
Premium and popular apps usually follow this way. From the psychological point of view a user should clearly understand what he pays for, so the functionality of the app must be undisputed.
On the other hand, once the app is purchased, it’s hard to charge users for any additional features or annoy your customers by displaying ads.
Upsell method
In this case a producer offers two versions of the same app: free and paid. The first usually contains some basic functionality and another is sold with extended features. So as soon as user is tired of limited features, he will look for another app or get a full paid one.
In-app purchases
This is the alternative to the point above. About 70% of successful apps offer their users in-app purchases. That’s a good idea for the following reason: different people may benefit from different features. So make the most vital, meaningful and basic for free and give the rest for money. So once a user finds your app really helpful – he’ll purchase the full version for sure.
In-app advertising
That’s the most simple and proven way to earn money. There’re services like AdMob that can bring you orders for placing ads. This option doesn’t need a lot of time to invest, the same it doesn’t bring high revenues: the CPM rates are usually very low. Moreover, users should really love your app in order not to quit it after getting several ads on their screens.
Though there are plenty of ways to turn your app into a profitable business there are also plenty of factors you should consider before choosing the option for monetization.
App Store vs Google Play
An ongoing topic for all holy war lovers: iOS or Android? App Store or Google Play? We are not going to take the attitude of any of the sides, but will provide you with clear overview supported by facts and stats.
Facts and stats
Today App Store reveals to host more than 1.5 million apps versus Android with 1.6 million apps.
The App Store has developed like a flash in the sky with 65 000 apps just in a year after its launch (2009) with 1.5 billion downloads. So now App Store has more than 100 billion downloads with 62.500 downloads per app on average.
As for Google Play, it has developed the same fast reaching 100 000 apps mark in a year with 1 billion downloads.Today it offers over 1.5 million apps for Android users.
Long before the mobile app market emerged, Steve Jobs had already announced the era of smartphone apps to begin. He was right, agree?
Where users purchase more?
App Store and Google Play are two completely different markets with different policies influencing users behavior. Apple is known for its attention to details both for hardware and software. That’s why before your app would be available on the App Store it will go through at least 7-day approval process and numerous tests.
Oppositely, Android apps can be easily added to Google Play and get approved just in several hours.
How it influences the number of apps purchased? Well, it increases trust. iOS apps look more reliable in terms of paying money for them. Since a user will think: well, if the app is already here, someone has already approved it and it has a good value for money, i think I shall buy it.
According to the stats, Apple has paid out more than $10 billion to developers last year, which means it made more than $4 billion just from operating the App Store. Apple does its best to promote and encourage companies to develop for iOS.
So the following factors result into the following figures: Google Play has 90% more downloads, while App Store earns 80% more money.
With this info in mind, Android developers may want to offer their apps for free and make an upsell for additional features, meanwhile iOS developers can feel free to charge for their apps’ downloads.
Apps by category
This year companies that released mobile games, business and educational apps are on the top. App Store reveals that these three sectors top this year’s list of mobile apps downloads with 22.1 % for games, 10.41% for business and 9.59% for educational accordingly.
Google Play oppositely reveals Android users put educational apps on the top with 9.12% (or 145 883 apps), lifestyle apps go on the second place with 8,11 % (or 129 713 apps on offer) and the App Store leader category is in the third place with 7.76% for game apps (or 124 158 apps).
Please note, that these figures are generic and may vary depending on the region (Asian market is quite specific) or niche.
How much?
It depends greatly on the category of your app and store. Here’s what official stats says:
If you have a business app, the average price on Google Play would be (according to the 2015 info) $8.70 for business app. Business apps are usually more expensive due to numerous features and APIs. For entertainment apps the price is four times lower and is $2.84 per app on average.
So as you see, the prices vary greatly.
But here please note, that 90% of apps on App Store are FREE. About 5% of the remained can be installed at $0.99 only and so the rest (5%) are sold from $1.99 up to $1 000 per app. So it’s up to you to decide how much you app will cost. But the tendency is that the amount of free apps with in-app purchases or ads is growing. Consider that.
Some expert advice
Well enough with pallid stats, let’s see what the top guys think about creating good apps and how they measure the success.
We’ve reached out the guys from the Top 30 Mobile Advertising Influencers list to share their thoughts on mobile app’s promotion and success in general:
Judy Hamilton, Founder/CEO TerraTap Technologies Inc.
App success for us is based on “stickiness” meaning that it’s not a measure of downloads but a measure of usage. When you can say that your user base is immersed and engaged with the content you are providing on a regular basis, that is when your app has paid off!
Juan Gonzalez, Strategy and Business Development at Ubiqua
First point it’s the discovery challenge. I try to achieve the TOP 25 ranking for Apple and get a great push in Google Play. The first thing on my mind is to know that I have a good app. So, in my case I always try to achieve a range of thousand downloads per day to know if the idea is in a good way. Then it’s time to take numbers of engagement, virality, and so on. And finally, move for a final growth and extend the app to new markets. But obviously, the process depends on the business models and your milestones.
So as you see, mobile app creation is not only about development, you should also contribute as a person to release an app that would stand out.
