If You Build It, They Will Come: Making Money Edition
Last week, we talked about deciding which platform to build your app on. Generally speaking, most developers develop for iOS first, so let’s act like that’s the platform we’ve chosen to go with. But now that that’s out of the way comes the question: “How are you gonna make some money off this thing?”
“Making money? It's an app!” you say.
Don’t be swayed by the glamorous mobile startup success stories. The failure rate of mobile startups is soul crushing. If you’ve planned your app successfully, you have a monetization model in place. If you don’t, put on the brakes and give us a ring. (We’re good at this. It’s kind of our thing. But we digress.)
There are many ways to make money on apps:
- Premium apps that people pay $.99 or more to download. You make the money with the sale of the app itself.
- Apps that serve purposes of marketing, branding, or customer service, which are free. They’re generally promotional in nature and make money by driving business to your company in some way. Obviously you only make the money when the advertising converts into a sale!
- In-app purchases are ways to sell add-ons once the app has been either purchased or downloaded for free. This works by offering add-ons that the user can purchase in the app to enhance the experience.
Apps that combine those two things are called “freemium.” A user downloads the app for free, falls in love and pays to upgrade to a version with premium features.
- The fee-based apps and freemiums are usually fancier than the free ones (duh! Or nobody would buy them!) and can be a direct source of revenue. But just because you make money via the app itself doesn’t mean they can’t ALSO be a great source of marketing/branding/customer service!
Let’s say your app is going to make you your millions via paid downloads. It’s important to look at who’s downloading the most paid apps. According to AdMob, 50% of iPhone users download at least one paid application per month, as opposed to 21% of Android users. A large discrepancy? Yes, and perhaps a big reason why app designers are so drawn to iOS. Many mobile applications launch for iPhone only, and then port their application to Android after achieving success and recognition (and cash flow). If you wait long enough, Android users may downright clamor for your amazing application (We’re looking at you, Instagram—you know what you did).
Anyway, once you’ve established how your app is going to make you money (and you do this through careful research and consulting with experts like us!) you’ve got some marketing to do. Mobile application marketing is complicated, but having a plan and knowing your audience can make all the difference in the world.
But we’re going to save that whole conversation for next week! You’ve got enough on your plates for this week. Homework for next week: Decide how you’re going to make money with your app.
See you back here next week for the Marketing installment!