How do app developers make money

6 ways to make money with your app

1. Ad-supported app

Most people will be familiar with this form of monetization. Advertising banners are shown in your app on parts of the display or the content is only activated after viewing the advertising video. The integration of advertising allows you to generate small amounts in a simple way, which can add up to greater income as the number of users increases. If you use this form of monetization, you can generally offer your app for free and earn money without your users having to pay for it, since you are paid for the advertising displayed by the advertisers.

There are 2 ways to include advertising in your app:

  • Above-the-line: Obvious advertisements such as videos before or after the display of the content or banner advertisements are understood here. Programmatic advertising offers a contractually regulated and technically simple option to implement this form of advertising.
  • Programmatic advertising This means the less easily recognizable, subliminal placement of advertising. This method differs in the following ways:
  • Infomercial: The classic "How to" videos, i.e. informative content, mostly in the form of videos
  • Advertorial: Smartphone advertisement in the style of a journalistic text with information on the use of a product or service
  • Native advertising: Smartphone advertisement in the style of editorial content
  • Native Interactive Brand Ads: Users are encouraged to share results or achievements they have achieved in the app on social networks such as Facebook, Instagram or Twitter, which in turn promotes the app

2. Paid app

This generally means paid apps. In order to earn money, the user is asked in the App Store, before or during the installation, to enter or confirm their payment details. Payment is made to the respective provider of the app store and is forwarded to you as the owner of the app, with the retention of a "commission".

Most apps are priced between € 0.99 and € 4.99, but there are also apps that cost more money. However, since it is more common to only pay small amounts of money for an app, you should be aware that you will only generate enough revenue with a larger number of downloads and purchases. Therefore, a well thought-out marketing concept is extremely important if you hope to generate income from downloads of your app.

Before your app is listed in the app stores, however, it must be subjected to a review process, which, depending on the provider (Google Play Store or Apple App Store), is differently strict and costly.

In most cases, paid apps are native apps. In general, monetized apps are almost always developed natively, this is also due to the fact that these apps are the most extensive and have the most functions. Get yourself in our article too Native apps a more detailed overview.

3. Freemium app

This new word is made up of the English Free and Premium and stands for the combination of free (basic) app and paid (premium) app.

Users can download the free app on their smartphone, but are encouraged to buy the premium app by:

  • Limited functions of the free app
  • Restricted content (e.g. articles must be activated) a so-called "Paywall"
  • Advertising in the free app, but not in the premium app

Here you should note that on average only approx. 0.5 - 2% of users a smartphone app for purchasing the Premium version decide.

4. In-app purchases

With this variant, the use of the app is initially free of charge, similar to the "Freemium" variant. Individual functions, areas or packages can go through In-app purchases can be unlocked.

Smartphone apps that offer in-app purchases are marked as such in the respective app stores.

5. Subscription model

Another model that is becoming more and more important is the subscription or Subscription model. In this case, users of the app are offered a subscription, which means that they do not even pay a large amount, but rather small amounts of money at regular intervals (monthly, quarterly or annually) for using the smartphone app.

6. In-app currencies

A special case of in-app purchases are the so-called In-app currencies. In the case of game apps in particular, these currencies are often used as a means of payment in order to offer users a way of getting to their desired destination faster or easier, which is appropriate to the game world. For example, users can buy virtual gold coins, diamonds or other “monetary units” that are suitable for the game, thereby gaining advantages in the game. The currency should not, however, in the sense of a so-called "Pay-to-Win" Systems are used. Users should always have the chance to get to their destination free of charge, which is usually more difficult and takes more time. Single transactions are sufficient here from just 1 euro to 150 euros.

A personal warning: When integrating in-app currencies as a payment system in your app, you should carefully deal with the legal requirements and regulations on the subject of gambling from the outset and also bear in mind that your app is mostly installed by users from all over the world can. We recommend consulting an expert. In many cases, the agencies we have placed can inform you about the legal regulations and hurdles and show you the right way. However, in special cases you should consider consulting a lawyer who specializes in this area.

After you have thought about how you want to earn money with your app later, the next phase, development, is dedicated to design. More on that at this point.

You want your own Let the app develop and earn money with this? Are you looking for a competent partner to develop your app?

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