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The basis of any business is to generate income. Without income, it is very difficult to maintain a long-term project. So how do you make money from a mobile app? How can income be generated?
Earn money with paid download applications
The first thing to keep in mind is that an application can be published as a paid or free download application. This choice is ours when publishing our app in the different app stores.
On the one hand, if we publish our app as free, users will not have to pay anything to download and use it. Just when they find it in the store, they will hit the install button and you’re done.
On the other hand, if we decide to publish a paid app it will mean that the user will have to pay before they can install and test our application.
The price that the user will pay will be chosen by us when publishing the application and can be as low as a few cents up to tens of Euros.
This chart shows the distribution of paid and free download applications on Google Play and the App Store. As we can see, more than 90% of the applications are free to download. They are free to download but not 100% free, they simply use other methods to generate income, methods that we will see below.
Earn money with an application with micropayments
As I said, an application can be downloaded for free but it does not mean that it cannot earn income.
An application can offer certain premium features once the user is inside. In other words, certain functionalities that are only obtained if the user pays for them.
We have absolute freedom to create these so-called micropayments within our application. Within these integrated payments we have to differentiate between two types.
The first is a one-time payment. It is a payment that the user has to make only once and already manages to unlock that premium functionality.
Let’s imagine an application that allows you to edit photos and apply different effects. Perhaps these effects could be premium and you would have to pay for them in order to apply them. Once the user bought the filter, they could use it at any time. they don’t need to buy it over and over again.
The second type of micropayment is just the opposite. It is a payment that is made every time that premium functionality is needed.
One of the most classic examples is that of games and extra life packs. Let’s imagine a game where we need a series of lives to be able to play and that, once we finish them, we have to wait a certain time to play again. The typical option that these games offer you is to buy more lives.
However, once we buy and spend these lives, we have to buy more if we want to keep playing. We could say that these micropayments have an expiration date.
As payment applications have been losing popularity, micropayments have been gaining it. Especially a type of micropayment that we are going to separate here into a new category: subscriptions.
Earn money with an app with subscriptions
If there is a method especially booming in the software world today, it is a subscription.
Subscriptions are nothing more than a recurring type of micropayment. Normally the applications that offer subscriptions are free to download but to be able to access certain features you need a subscription, that is, to pay recurrently every X time. In most cases, this period is monthly.
Services like Netflix or Spotify have helped popularize this type of income method. In fact, today, it is rare to find someone who is not signed up for any kind of recurring service.
Make money with an app with ads
Viewing paid applications, micropayments, and subscriptions. Is there any other type of income method left?
Yes, perhaps the most popular of all, the applications with ads.
In all the above cases, the income comes directly from the user. It is the user himself who pays the application with his money. However, there is a way to earn income without costing the user money, and it is through third-party ads.
If we have advertisers who are interested in paying to leave within our app, we can charge for that space. This can be done in two quite different ways.
Make money with ad networks
The first is to resort to AdNetworks are companies dedicated to bringing developers and advertisers together. As creators of the application, we only have to take care of configuring where and when what o show these ads and the AdNetwork will do the rest of the work.
In fact, I am sure that you will already know which is the largest AdNetwork in the world today, Google. through its Adsense products for the web, and Admob for mobile applications, the largest advertising company on the Internet. Is it a coincidence that Android is owned by Google and that it is free? I don’t think so 😉
Make money with your own advertisers
The second option is to sell the space ourselves. Contact advertisers and set the price ourselves. This means that we will have to manage the payments, the types of ads that we will show, the analytics and reports to customers … everything.
There are many applications that use this method of income today. Perhaps, by applications monetized through ads, a small application developed by an independent creator that has the typical banners and full-screen ads could come to mind. In any case, there are other applications that we use every day, much larger, that also fit perfectly in this category. We are talking about apps like Facebook, Twitter, Youtube or LinkedIn.
In fact, when we use this type of application we believe that we do it for free simply due to the fact that we can download and use it without having to pay a Cent, but the truth is that we are paying for the service. We are paying, not with money, but with our information.
All personal information that we transfer to these applications is then used by these companies to sell advertising space to their advertisers. And the truth is that they are not bad at all. Information is a big business today.
Using an AdNetwork has the great advantage that we don’t have to worry about getting advertisers or dealing with them. In fact, we can have ads in our app in an hour. The problem is that the income will be lower since these companies will keep a percentage of them in exchange for all the service and the platform they offer us.
On the other hand, if we decide to manage advertisers ourselves, we may be able to earn more, but we will also have to take care of managing advertisers.
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