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5 approaches: How to make money on the App Store

26.07.2016 Pavel Сherniavskiy
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5 approaches: How to make money on the App Store

Along with Google Play, Apple App Store is the best source of revenue for app developers. It falls behind its main rival in terms of the number of downloads but, according to analytics, it still remains the number one platform as for making money.

Of course, the main thing you need to earn money on App Store is a really good app. You should know that developing an iOS app is not such an easy task as it may seem. If you want to end up with something more sophisticated than another Temple Run clone, you should realize that it would require a quite large scope of work, quite a lot of time, and enough money.

Still, you might have guessed that App Store is not a gold mine, and having a great app is not enough to start making a profit. The money-making app is 50% quality, 50% monetization strategy.

So, let’s figure out the ways you can make money on App Store via apps.

  1. Paid download

The most obvious way to make money is to make your app paid. However, this option works well only if:

  • You have perfect marketing;
  • Your app is much better than your free-to-download competitors;
  • Your price is fair and corresponds to app’s quality;
  • You want to gain revenue directly via downloads.

Remember that in this case the other monetization options should be minimized; otherwise, you will get lots of frustrated users and negative feedback.

Note: more than 70% of all app downloads are free. The sad reality is that even if you offer the best app possible, most users will still look for a free alternative. It all comes down to psychology: none wants to give their money for something that may eventually turn to be useless. Moreover, paid apps to require strong presence and sophisticated marketing, as ads in social networks or banners do not work even if your app costs less than a dollar. So, free apps offer more possibilities as for generating revenue.

  1. Freemium

The freemium model is one of the most popular monetization strategies. It means you offer a free download and a set of additional features users will pay for after trying your app. The point here is to find a right balance between offering too much and too little free features. Another way is to offer an advertising-free version of your app for a moderate fee.

  1. In-app purchases or subscriptions

In-app purchases generate profit through giving the users an opportunity to buy extra features, bonuses, or, in case of shopping apps, real goods. This model is used by most free apps available and it is especially helpful for games or lifestyle apps. If in-app purchases really add value to users, they make your app more addictive – when the users make their first purchase and it really improves their experience, they just cannot stop buying.

Subscription is essentially a content-based in-app purchase for entertainment or news apps. In this case, users download an app with a limited content for free. To get more of this content, they need to pay for the subscription.

  1. In-app Ads

This is another highly popular money-making option. In-app advertising can be displayed in the certain interface areas (for example, banners on top or on bottom), making revenue per view or per click. It is especially profitable when combined with location, demographic, behavioural and other user data analysis. This is highly effective monetization model, especially for the apps people use on daily basis.

Another option is adding auto-play advertising videos to your app. These videos can be played, for example, after each level of a game or after a certain period of time.

Remember: advertising should be a part of user interaction, not an annoying problem. Never use pop-up ads that appear in the middle of gaming process. Try to redesign an add banner to make it look like an organic part of app’s interface. As for videos, it is better to use “skip” button and make watching them “rewarded”. In this case, the user, which has watched the video to the end, gets some in-app reward, for example, coins that can be used for purchasing some items in a game.

  1. Partnership and sponsorship

The partnership monetization model means finding a partner company with an appropriate customer base and creating an app on its behalf to gain popularity. It may be the best way of making money off your first app. Sponsorship also requires finding a partner company, whose offers or ads will be displayed within your app. In this case, you essentially use more targeted and relevant in-app advertising.


The monetization model for your app depends on its category, target audience, its age group, and so on. Try to take all the crucial factors into consideration and lay out your strategy before launch. Whatever strategy or combination of strategies you choose, keep track of your data, distinguish monetization techniques that bring you the most profit, and try to improve your approach in the course of time.

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