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Tuesday, August 26, 2014

Top 3 monetization options to consider when developing an app

Commercial app development tips
Free apps open the door to future sales
By Mariah Cameron

Mobile app development has attracted many people who venture into this business with the prospects of making money. This does not come as a surprise for an industry that is estimated to be worth billions of dollars.

If you plan to make money from developing apps, then you should think about using the best monetization strategies. There are various ways of monetizing apps, all of which have their own pros and cons.  The ideal monetization method to use will ultimately depend on the nature of any given app. However, here are the top 3-monetization options you should consider before developing an app.

Direct app sales

Selling on app stores is the most obvious way of making money from mobile applications. But, you will be surprised that most apps are actually free to download. However, if your app offers a unique solution and there is a clear return on investment to the user, then it may be logical to charge for it upfront.

Usually, platforms such as Apple’s app store and the Google Play store take a percentage of what you make after selling an app. Of course, there are many other ways of selling an app without having to incur commission fees. But, keep in mind that competitive pricing, uniqueness, and value are critical factors that will determine whether people will buy your app or not.
Mobile commerce monetization
Combine multiple monetization techniques to boost earning potential

Freemium pricing

This is one of the most common monetization methods for mobile apps. The freemium model allows customers to download an app at no cost and later generates revenue from in-app purchases. Most people love free things, so this model of pricing encourages users to download apps. There are generally three ways of using in-app purchases and make money from an app that is free to download.
  • The free trial mode of pricing is one of the most common strategies. This allows users to experience an app for a limited time. Once the trail period expires, users can unlock the app’s full functionality through an in-app purchase. This method is highly trusted as it gains the buyer’s confidence.
  • Another way to monetize an app is selling virtual goods. This is common with games whereby players are prompted to make an in-app purchase to proceed to higher levels in an engaging game or upgrade to a better version.
  • You can also make money from your app through subscriptions. This strategy has proved to work well for content related apps and those that deliver a service.


If your app has a really large user base, advertising is one of the monetization avenues you might want to explore. Mobile based apps work in the same fashion as traditional web advertisements. Developers simply sell advertising spaces to various brands that want to reach target demographics. Advertisers typically pay developers whenever ads displayed on their apps generate clicks or impressions.

In addition, you can make money if another company acquires your app. A great example of how this can work is the multibillion-dollar acquisition of WhatsApp by Facebook. In other cases, monetization options are obvious such as when a business sells products directly to buyers. Keep in mind that monetization methods will depend on the type of app you want to develop. In order to make an informed choice on how to generate revenue from your app, ask your developers to suggest the best monetization options.

About the author: Mariah Cameron is an app development enthusiast who loves to capitalize on great business ideas. She has developed multiple apps for over 5 years and turned them into successful ventures. To learn about the team of developers that Mariah partners with, visit http://www.xdesign.com/.

Image license: Geralt/Pixabay; US-PD; 2. Dion Hinchcliffe; CC BY 2.0