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How to Make Money from an App (App Monetization Methods 2020)

If you are an app developer, you probably want to make money from it (well, you have spent a lot of time creating it, right?). To that end, you might think that you shouldn’t put it on app stores for free. This is where you might be wrong and the concept on monetizing comes into place.

App monetization is a means of making money from a mobile app without charging users for it. As users of mobile apps, most of us don’t like paying for them (unless they offer something very special). One of the reasons behind this is that there are usually free apps similar to the paid ones, and there is no point to pay for something when you can have it for free. Despite that fact, however, free apps are the source of most of app stores’ revenues.

Ok! So now that we know developers of free apps can make money from them, let’s see how app monetization works.

Monetizing with in-app advertisements

This has probably happened to you: You open an app, start working with it, and then you see some ad popping up and taking over your entire screen. These ads are a source of revenue for apps, or as we call, app monetization. There are three types of ad revenue: Cost per Thousand Impression (CPM), Cost per Click (CPC), and Cost per Action (CPA). CPM is preferred amongst free app developers because it doesn’t require the user to click on the advertisement in order for the developers to earn and it’s less intrusive on the user experience.

There is also another way to make money from ads showing up on an app. Developers sometimes give their users the option of upgrading. Users pay a small amount of money to stop receiving ads on their phones when they are working with that specific app. This money goes directly to developers’ pockets. Sounds interesting, right?

There is also the opportunity of promoting apps that are in affiliate programs. Major companies such as Google, Microsoft, and Apple have affiliate programs that you can use to earn a little extra money. In these programs, you are supposed to promote specific apps through your own app, but you have the option to choose which app you want to promote.

app monetization - in-app advertisements

Monetizing with in-app purchasing options

In-app purchases are something else developers can offer to free app users as a channel for app monetization. This is widely seen in app stores. Users download a free app and get access to some material, but if they want to continue using it or have access to more material on that app, they need to make a purchase.

This is a good approach for app monetization if you think your app needs to be a paid one, but also think that people will not download it in the first place (since they do not know if it is worth paying for or not). You make the app free to download and give them a sneak peek with limited access to what’s to offer. By doing this, users are more likely to download your app and pay you for using it.

Monetizing with sponsorships

Sponsorship works in every business. You need money for your development, right? Look for a sponsor and give them free marketing within your app as a return of favors. This is a win-win situation for both sides, although you need to convince them that your app is interesting enough and your in-app ads are going to be seen by many users.

This app monetization method can only be done and useful if your users are a fit for the sponsor’s market, so offering their products or services may lead to something for them. These kinds of advertisements exchanged for sponsorship money are also usually well received by users since the content seems relevant and valuable.

The most important here is that you as an app owner decide to choose an income method that suits your app and its users. If you make a lot of money in a short period but lose most of your users, it’s not worth it! Try to be less as spamming as possible and focus on staying relevant with your app.

app monetization - sponsorship

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