Monetizing Your Mobile App: Pay Per Download

May 7th, 2014

From the mundane “Get Your Family to Download Your App” to the off the wall “Create Beer Coasters” join us on a 52-week journey of some of the top ways to promote and market your mobile application.

Week 18

Mobile App Marketing: How Can I Make Money From My App?

Mobile App Marketing Tip - Monetizing Your Mobile App: Pay Per DownloadWithout a doubt, monetization is one of the most common concerns when developing a new application. After all, very few companies develop an app just for kicks. In that light, over the next few weeks we will discuss the various methods of earning revenue from a mobile application. For this week, we’re taking a look at good, old-fashioned paid downloads.

Setting A Price

If you plan to charge money for your app, then it’s important to determine exactly what you will charge long before you write the first line of code. While there is no exact formula for determining what the best price for your application is, there are certain things you should consider when establishing your product’s price. They could include:

    • What do I think users will pay for my app?
    • What do my competitors charge for their product?
    • Will the purchase price be the only form of revenue from the app?
    • How quickly am I looking to break even and profit?

It’s overwhelmingly important to choose a price that you think you can stick with for the long term. If the app suddenly encounters surging word-of-mouth reviews, part of that popularity will be predicated on the price. If the price suddenly goes up, your potential new users may end up not downloading the app after all.

With a Pay-Per-Download model, users of your app are generally less willing to see advertisements in the app and may expect a greater overall user experience, even at just $.99.

As for what to exactly set the price at, there is no one right answer, and it may involve doing some testing of the marketplace at various price points to see what users will pay. We have had clients be successful selling apps at $.99 and those selling them at $99.99. It all depends upon the value that your app provides, and how much your users are willing to pay for that value.
(148apps has a good price breakdown of app pricing on iTunes)

Updates Need to Be Factored In
When looking at pricing your app, don’t forget to factor in maintenance and updates. If you charge for your app, users will expect the app to stay current, and at their initial price of entry. So if it cost you $30,000 lets say to build an app, and you charge $.99 to create it, then you need over 30K downloads of the app to hit your break even point. That does not take in to account anything beyond your initial development.

Apple & Google Take Their Cut
One last thing to keep in mind when choosing a price is the transaction fee. Presently, Apple takes a 30% cut of each app transaction, so if you are selling it for $.99, Apple and Google keeps $.30 of that, leaving you the other $69. This figure is important to keep in mind when generating a projection of the app’s future revenue potential.

Multiple Monetization Methods Are Possible
Paid downloads aren’t the only method for earning revenue from a mobile app, nor are they necessarily appropriate for each and every app that’s posted to iTunes and Google Play. With that in mind, next week we’ll take a look at generating revenue through in-app advertising.

As always, you can follow us on Twitter and Facebook to stay in the loop.


The 52 Week Series of Marketing Mobile Applications
Week 1: Talk to Friends & Family
Week 2: Picking the Right Name for Your App
Week 3: App Store Optimization
Week 4: Submitting Your App to Review Sites, Blogs, and Directories
Week 5: Using Video to Promote Your App
Week 6: Creating a Microsite
Week 7: Creating a Press Kit
Week 8: Creating a Marketing Plan
Week 9: Social Media: Facebook
Week 10: Social Media: Twitter
Week 11: Social Media: Other Platforms
Week 12: Social Media: Managing Your Social Media Presence
Week 13: Social Media: Reaching out to Bloggers & Reviewers
Week 14: Finding What Makes Your App Unique
Week 15: The Ins, Outs, Ups, and Downs of App Review Requests
Week 16: Using Promo Codes
Week 17: What To Do When You Start Getting Reviews
Week 18: Monetizing Your Mobile App: Pay Per Download

Sam Allen

Samuel is something of a marketing Swiss Army knife. He enjoys helping clients build their web presence and visual identity through design, SEO, and good ol' fashioned content. A photographer by trade, he's had work published in the New York Times and the New Jersey Star-Ledger.

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