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How to earn from Apps
January 5, 2023

How to earn from Apps

Ever wondered how much someone can earn by developing an app? Continue reading to find out

You’ve probably heard that apps can make a lot of money. Apps have the potential to generate billions of dollars in income each year. There are several examples in front of us that support that. However, most apps that have this potential are rather few. Most of the applications are duds that struggle to earn any money at all. If an app is on the list of the top applications, it will earn an average of $82500. When the top 800-900 app’s average profits are $3500, this differs dramatically.

It’s a very challenging exercise to estimate how much money an app can make. As a result, we are addressing an approximated average here because it is a variable that is affected by a variety of circumstances. Among these are the app platform, the app’s purpose, the income model, and the app structure.

Because there is no defined average for how much income an app may create, you will need to study how different niches perform within the app ecosystem to determine how much your selected niche’s projected returns will be. You must decide on the market you want to target as well as the business strategy your app will use.

According to, the use of Google Play Store applications increased dramatically in the second quarter of 2020. More than 96% of these programs were available for free.

We may conclude that people are interested in applications, but only 5% are willing to pay for them. So, how exactly do apps earn revenue?

To make things easier, let’s go over the numerous ways to monetise an app and how to decide which one is best for you.

Direct sale- You’ve probably noticed that some premium apps aren’t accessible for download before purchasing. The description, video, screenshots, and reviews are the only things you may see at first. Convincing a user to download a premium app is a difficult effort, thus all accessible materials must be highly appealing, the best example being Minecraft Pocket Edition. It is the most profitable app on Google Play. When it was released in 2011 for $6.99, it quickly became the most downloaded game on Android.

Indirect sale- The goal of this strategy is to disguise the payments within the free software. As a result, customers may enjoy certain basic functions for free while paying for more sophisticated alternatives. This is a smart tactic since it increases the odds of converting your users into customers. They may test your product, discover its benefits, and then decide whether to invest in further features. The following are some methods to generate money on apps:

  • Advertising
  • Freemium
  • In-app purchases
  • Subscription
  • App sponsorship
  • Crowdfunding

In-App Advertisement

The approach envisions app owners gaining a large consumer base. As a result, providing relevant information and adverts to the same target group might be a big profit source. However, before purchasing this model, you should consider the sort of adverts that will be displayed on your app. Keep in mind that the advertising should load quickly and be relevant to your target demographic. Users lose tolerance with clumsy and irrelevant adverts, which degrades the user experience.

The advertisement pay-out is determined using several ad campaign models. Cost per click (CPC), cost per view (CPV), and cost per install (CPI) are the most prevalent. 

  • CPC deals with the clicks on presented adverts, and the pay-out is based on the cost per mile principles Cost per mile refers to payments made for every thousand (miles in Latin) clicks on advertisements.
  • CPV is based on the user seeing 30 seconds of the video ad or interacting with the ad, whichever occurs first. In the event of shorter video advertising, the complete duration of the ad or the initial contact is taken into account.
  • With the CPI, you are paid when consumers perform an action in response to the advertisement, such as installing the promoted app.

Freemium Model

The term “freemium” is a mix of the terms “free apps” and “premium apps.” The apps in the freemium model are free to install and use. However, some of the exclusive content or upgrades are not free. For example, with the premium edition, improved performance, characteristics, or ad-free content use are available. The key to making the freemium model succeed is to provide significant value to users through the free app.

Your software must begin to develop trust and value from the first session. When people realise the excellent service, utility, and satisfying experience, they are finally persuaded to pay for premium options. You can’t expect a dissatisfied customer to make a transaction. So, whether free or paid customers, your app should provide something exceptional.

This method works well with cloud services, instructional apps, photo editing apps, app-based games, and other similar applications.

In-App purchases

The in-app purchase model is a subset of the freemium model. Under contrast to the Freemium model, users must pay for many tiers in an in-app purchase model.

In-app purchases (IAP) are extra features, functions, and virtual things that users may purchase within the app. This often grants users access to exclusive material and things such as virtual money or a feature.

A customer will pay for access to a high degree of user engagement. In-app purchases are one of the key money generators for free apps, and they are increasing year after year. One of the claimed reasons for this is the fast-expanding spending power of the two tech-savvy generations — Millennials and Gen Z.

There are three types of IAPs that are used to generate revenue — consumable, non-consumable, and subscriptions.

  • Consumable IAPs are one-time consumable purchases like as virtual currency, power-ups, prolonged gameplay, or an extra feature. This type of purchase is widespread in mobile games..
  • Non-consumable IAPs are often permanent features that users purchase in the apps, such as the ability to eliminate advertisements or a premium photo filter.
  • Subscriptions provide consumers with access to services or additional features for a recurring fee for a certain length of time. These are popular with streaming and news apps and they can be renewable or non-renewable.

Subscription Model

The subscription model is the most preferred and easiest approach to charge app customers. Offering great material to customers for a limited time period, until they become accustomed to it, and then charging them to continue using the app. Subscriptions are available monthly, quarterly, semi-annually, or annually. From a business standpoint, the app subscription model is best suited for applications that provide services such as music, video, and news apps.

This concept results in a win-win situation for both enterprises and users. Subscription-based apps generate more money and have a more consistent income stream. According to statistics, subscription-based applications produce 2-3 times more money than ad revenue or even paid apps. Furthermore, it performed roughly 50% better than in-app purchase income.

It also allows you to target several user groups with different membership plans, tailoring the pricing and features to their specific requirements. At the same time, purchasing the items is more convenient for the users.

App Sponsorship

In-app sponsorships have emerged as an effective mobile marketing technique for brands looking for a strong presence and results.

In-app sponsorship and collaboration raise the bar for advertising. It gives marketers a more integrated presence by linking them with the proper audience who is ready to buy. It also assists marketers in associating their brand with a great app experience, increasing brand exposure and sales.

To attract such sponsors, however, your app must have a large or specialty userbase that exposes brands to the right demographic and drives results.

Partnerships with other goods and applications can improve the user experience and app offers in addition to earning cash.


Crowdfunding, an alternative funding strategy to consider, is also one of the profitable methods for monetizing mobile apps. It has gained popularity in recent years.

There is an audience that will support you if you have a brilliant concept, thanks to sites such as Kickstarter, Patreon, Crowd Supply, Fundable, Indiegogo, and Chuffed. (And, of course, gratitude to people who make little but significant donations.)

Crowdfunding works differently than other methods of app fundraising. This method might assist you in obtaining the funding you want for app development and promotion.

If you want to raise funds for your app through crowdfunding, you must reach out to and connect with a wide audience. And to do so, you must focus on developing your brand as well as a solid advertising campaign that describes your software and your mission. However, monies raised through crowdfunding are only a start in compensating for a lack of starting resources. To make money from your software, you must adapt to different possible monetization tactics.

How do you pick the best monetization approach for your app? Finding the correct combination of monetization tactics for your app to produce money is a vital piece of the puzzle that determines the success of your business.

Explore other apps

This gives you information about how other developers charge their content and apps. Consider if it would be advantageous to provide alternative payment options.

Consider your pricing structures

Choose a subscription option if you have ongoing content costs. In addition, provide a free trial to encourage sales.

Think about your app’s usage patterns

It will suggest monetization possibilities. In-app purchases and advertisements are OK for casually used apps. You may charge an in-app fee to eliminate advertisements.

Use native extensions

If your program may be enhanced, for example, by adding levels to a game. You may make the basic version free and then charge for further features via subscription or in-app purchases.

Consider local factors when pricing

Remember to consider local pricing models, cost-of-living variances, the cost of rival applications, and other considerations when pricing apps, subscriptions, or in-app purchases.

Consider your target audience

The purpose of selecting a subscription, advertisement, or in-app purchase may be limited for some users. Paid (premium) apps are more appropriate in such instances.