Hi. Thank you for watching this 7th video in our video series. I’m Jody Chaffin, and today we are discussing ways to monetize a mobile app.
As we discussed in our 4th video, if you are building a business around a mobile app, it is crucial to consider how you will monetize that app to recoup your investment and generate the revenue you desire. There are several options available, and today we are going to discuss a few of those:
- The first and most straight forward is charging for the app in the app store. – As you probably already know, apps can be free or can be sold. One thing to keep in mind though is that Apple and Google keep 30% of sales through their app stores. Therefore, if you plan to charge $10 for you app, you will only get $7 for each sale.
- Another is In-App purchases – In-App purchases come in a variety of forms but are generally to expand the functionality of the mobile app or to purchase a subscription to premium content or features. Using in-app purchases, you can allow users to try the basic features of your app and then pay extra for the more advanced features. You can also use in-app purchases to charge an ongoing subscription fee for the use of your app.
- Advertising is another option – Ad supported apps can generate a lot of revenue through showing ads throughout your app. However, you have to keep in mind that if your app is providing professional services, users may be turned off by ads. If they are using the app to assist them with their work, they most likely won’t want ads distracting them. Additionally, ads can take up valuable space within the app.
- Similar to advertising but less invasive is securing Sponsors – This is especially effective if you have an app that is designed for a specific industry. If the majority of your user base has similar interests, you can most likely find companies that would like to sponsor your app. A sponsorship can come in a couple forms. You can show the sponsors information on the splash screen or you can create specific pages with content about their company and products. We have one customer, the Timber Tracker app, that is utilizing this method very well.
- A final option is White Labeling – White labeling is selling a custom branded version of your app to another company that wants to use your features to help promote their business. Your app can be designed in a way to allow for easy reskinning and rebranding, so it can be sold to other companies.
Each of these have their pros and cons and you need to consider them carefully as we design your mobile app. Planning for monetization is important as it can impact the design of the screens and the overall architecture.
Of course, these are all ways to directly monetize an app sold through the app stores. If your mobile app is part of a larger software system, then you can also monetize it through more traditional software sales like licensing agreements.
I hope this has given you some ideas to consider as you plan for how your mobile app will make you money. If you have questions or would like to provide feedback on this video, we would love to hear from you. Make sure to subscribe and follow us on social media. Thanks for watching and I’ll see you next time.