So I wanted to showcase to the world how easy is to make money with apps and this has been the 1st week.
To be honest, it wasn’t easy… these are the lessons I learned:
- Try not to get married in the week you start this challenge.
- Try to do market research BEFORE you start. I started my market research while doing the apps and it took a lot of time
- Be sure you pre-written your descriptions. Descriptions and ASO takes a lot of time… so be sure you do it before working on that.
- First impressions matter a lot! so do awesome work in screenshots and Icons
So how many apps have we done?
one of them got automatically removed by Google but I managed to get it back (I will write a post about this later on).
The plan for the next week? To create 2 apps per day, to try to have by this Friday a total of 15 apps.
So stayed tune for 15 apps by the end of this week.
I will be updating the community with more insights tomorrow.
There are hundreds of thousands of Android apps out there for buyers, but most of these mobile apps don’t make a dime
A few years ago, it was clear a Gold Rush mentality was brewing as Google proved that people really liked Android mobile apps. A lot of developers jumped on the bandwagon to claim their fortune, as did many young developers and regular folks lured by the promise of easy money via cookie-cutter apps created for them by app making websites (ex. Appsgeyser). The hype has cooled down, but not the desire for mobile Android apps, nor have the opportunities for real app developers to make real money from it.
According to Forrester Research, there is an estimated $17.5 billion worth of mobile apps that will be sold this year across all platforms. If you will subtract the cut that Apple, Google, and other platforms get for placement in their app stores, that’s at approximately $13 billion for app developers to pocket. But as a developer, what do you need to do to get the biggest slice of the pie?
Ilya Laurs, the founder of the app store GetJar, believes that he knows the key answer to the key question above, based on analyzing the sales and revenues of mobile apps.
He presented his analysis recently at the CIO Global Forum, an exclusive invite-only leadership event for CIOs. Take note, the vast majority of apps that he analyzed are consumer apps, so sales through an enterprise app store, such as the one Apple provides for employee app distribution, may not fit his analysis. Also, Laur’s data is based only on Android apps as he could not analyze Apple App Store sales data. But then again, he still believes from anecdotal evidence that the basic model for making money with apps “generally holds true” for iOS apps as it is for apps on other platforms.
For him, it boils down to what he calls the user engagement model. To put it simply, it means what you charge for an app should be based largely on how your users engage with it.
To give you an example, if users use your apps for just a few times, an ad-supported model makes no sense at all, as you’ll earn just a couple of pennies per user. You’d be better off charging 99 cents or $3.99 or whatever up front. Even though your sales at the paid price will be a fraction of the free, ad-supported version, your total revenues are likely to be larger.
Conversely, if your user engagement is expected to be high, regardless if your app is for a news, sports scores, social feeds, or other information-stream-oriented stuff, the advertising model makes much more sense. You would be able to make even more money from the many more impressions — sales-speak for the ads actually presented to your users — over your Android app’s lifetime even at a few cents per impression than if you charged a one-time upfront fee. However, you must remember that it’s often difficult to get paid by the ad networks.
Which begs another question: What about high-engagement Android apps that aren’t made to provide information streams, where ads would be a turnoff? I’m referring to games such as Angry Birds and the likes or Draw Something. According to Laurs, to combine a relatively low up-front price (perhaps 0.99 cents to $4.99) with “IAP” in-app purchases for virtual goods (such as hints or power ups in games) and additional functions like bookmarking of your favorite teams for a sports oriented app or ad removal to convert a free trial app to a paid one. Another huge advantage of IAP is that billing is easy, it can be done either through the app store’s own system or via an established provider such as PayPal.
Then there are highly useful Android apps that don’t really support the notion of an IAP. Those should cost more because they are more valuable. In some cases, a subscription model for you app makes sense. This approach is perfect for a high-quality magazine like The Economist, which doesn’t repeat the same news everyone else has. Outside of media, I think the subscription model is a harder sell, though you’ll still certainly see it with services such as the CloudOn Office virtual environment. It’s currently being used by Quickoffice Connect as their strategy to get people to subscribe to the Quickoffice Office editing suite rather than buying it just one time.
Laurs has created what he calls a user utility-engagement model to represent his app pricing strategy, as shown below.
The image shows three factors to steer you to the best pricing model:
- Utility – how useful a person finds the app
- Engagement – how often a person uses the app
- Value – how much a person likes the app’s features, relative to the universe of other options
As the slide above shows, how those three factors combine indicates the way to make the most money from Android apps.
Another factor that’s worth considering is marketability. Free apps, including “freemium” titles that use ads or in-app purchases to make money, are the easiest to market. We all like free stuff, even if they know there’s money being made off them in some other ways; thus, it’s easier to market a free app over a paid app regardless if it’s an iOS or an Android app. Take note, the marketing cost should not be your primary option; attracting people who aren’t paying for an app or end up using it for a few times, thus not getting you the ad or revenues via IAP you counted on, doesn’t make you the money you sought in the first place.
So, no matter your pricing model, always remember that apps have to be good at what they do and how users engage with them. Quality matters most to gain customers, customer loyalty, and referrals to their friends and colleagues.
OK, let’s face it, if you are an app developer, you are not just building apps for fun, right? Building an app is a business where you need to earn money to keep going. But, with so many options available for monetization, which tactic should you adopt for your app?
If you know about the ups and downs on app monetization model from day one, you can easily prove that your customers are willing to pay to solve the problem you’ve identified for your app – this is a crucial part of validating an app idea.
There are actually three good pricing models that bring in all the revenue for apps. According to Distimo’s report, IAP revenue from freemium apps brought in the most revenue at 71%, with paid revenues following at 24%, while in-app revenues from paid apps are only at 5%.
If you launched your app using one of these monetization models, most likely you’ll have a greater chance at making more revenue than any other model.
Here’s what you need to know about each monetization models:
- Freemium App
This may not be just the most popular monetization option for Android apps, but it is the most revenue generating one, with in-app purchases raking in 90 percent in the Asian markets, according to Distimo’s report.
A freemium app is being offered free-of-charge to users with limited features. Users can access a premium version or any additional content and features via in-app purchase. This model has also been used for subscribing for monthly content updates. The free app with an in-app purchase removes the price point as a barrier for users to download an app and gives the developer the fighting chance to prove the value of their app or product.
You can offer premium or additional content or offer basic features for free and require your users to pay to use the complete functionality of your application. A good example of an app who uses this model is the British celebrity chef Jamie Oliver’s recipe app wherein it offers additional content and is updated every month for a subscription fee.
You may offer a free basic version of your app to your users so they can get a quick buy-in with least resistance. This allows them to buy additional features for a fixed price or a monthly subscription once they’re hooked and find value in your app.
- One-time Paid App
As its name suggests, you users pay just once to download your app. Updates, features, or any other additions are expected to be free.
If you want to launch an app using this model, it should be compelling enough for your users to pay to download it even without a demo. Also, there should not be repeat revenue from your existing customers. For a continuous revenue stream, you should look for new customers each time.
So how do you determine whether your app should be monetized using this model? Well, most paid apps offer the core value in the first download, followed by minor updates or design enhancements. Most productivity apps fall into this category. Take, for example, Clear.
- Paid Apps with added Paid Features.
This hybrid model has gained traction fairly recently, but not with its fair share of criticism. Many users feel that it’s not fair to pay to download an app and then pay more just to avail additional features. It’s kind of tricky for you to build on this, but if you do it cleverly with a value proposition, it may certainly work.
An example of an app for this strategy is the flight tracker app, Flight Radar Pro.
- Free Apps with Ads
While the abovementioned monetization models require the user to pay to use, one of the monetization models that Distimo has excluded from its research is a free app with advertising.
There are many apps that use this model of monetization. Take for example the Sleep Easily Meditations by Shazzie. The app is free to download and runs non-intrusive ads for as long as the app is in use. No wonder this app receives over 330 downloads daily and it runs for over 20 minutes every time it is used.
You only make money with apps when a large number of users download and use it on a very frequent basis. So choose a model for monetization wisely. Also, when making or developing apps, you should not overspend. You can try Appsgeyser as it can help you create Android apps easily for free.
While there are different options to monetize your app, the way to achieve continuous revenue stream is through repeated transactions from new and existing customers. The lifetime value of your customer will determine whether your app is a hobby or a business.