Post updated March 25, 2015.
“It’s money that matters.” – Randy Newman
The secret’s out – it’s not easy to make money with apps.
Everyone who’s on this blog at some point has watched, read or purchased content from someone talking about how you can make millions of dollars with apps. They talk about how every download you can get is going to make you AT LEAST $1…all you need to do is get apps in the store.
I hate to break it to you, but that’s bullshit.
If you think that you’re just going to sit back, relax, and watch the money pour in, you’re in for a rude awakening. App monetization is not about being in the game, it’s about winning. It’s not about downloads, it’s about dollars.
In fact, if it wasn’t for a few key app monetization networks, I’d be in a lot of trouble. Up until now, making money on apps required a LOT of downloads, much the same way websites require a lot of traffic.
Strategies like in-app purchases, Lite -> Paid up-sells, and CPM advertisting (Admob/iAds) are DYING, yo. Straight up. I know this from first hand experience.
Fun fact – one week 2 years ago the in-app purchases from 3 of my apps made me about $70. The new monetization I’m doing make me over $800.
In-app purchases took me 2 days to program in and $300 in development work. The new services take 10 mins and involve 2 lines of code.
Some people have different results, no question. This can vary from category to category and depend on download volume.
The Glory of Inequality – Why It Pays To Love Rich People
Yeah, you heard me. When it comes to making money with apps, the best thing you can do (at least for a while) is to make rich developers even richer. Instead of trying to sell your own apps, sell theirs. Here’s why.
Now – please understand that I’m all about following your dreams and staying the course. To create a brand that’s as strong as iron and as cool as Triumph Motorcycles is the ultimate dream for anyone getting into apps.
But this article isn’t for you – this is for the thousands of you out there that just want to make money. You want to build an app and have it spit out $80/day and then repeat that process.
So here’s a quick and dirty breakdown about the app market that maybe you don’t know (if you haven’t opted in to my email list and read the $0.51 article, I highly recommend you do so before reading this):
Take a look at the apps on the Top Grossing lists, specifically the top 25. You’ll notice that most of them are Free.
Top Grossing AND Free??
These apps have enormous monetization pathways within their apps and can pull in upwards of $5 PER DOWNLOAD. That means every time anyone downloads their app, they can expect to make an average of $5 off that person over the lifetime.
Like any business person, these apps get to the point where they can prove these numbers and the developers say to themselves “Wow – we just need to get more downloads and we’ll make way more money!” The Apple charts and regular marketing helps, but they want to DRIVE users to their game.
They want to purchase downloads. And at $5 per user, they can definitely afford to do that.
Now, most (99%) of the developers out there who use ad networks to buy traffic are looking to spend $0.05 per click or $0.50 for an install. After fees, the publisher (the person who’s showing the ad) makes a whopping $0.02 – $0.30. Not horrible, but that’s not going to help you retire.
Enter the Goliath who can make $5 per download. He says “Hell, I can pay out $3.50 per install!” A publisher like you or me delivers them an install and, after fees, makes $3!!!
Simple as that. The best part?
These huge app companies have an insatiable appetite for downloads – their instructions are pretty much “We’ll take everything ya got, buddy.”
Glory, glory, hallelujah. I’ll sell you downloads for $3 a pop allllll day.
Leveraging a Winning Model – The Birth of an Empire
Enter Guilherme Schvartsman, the creator of a few little games called Ant Smasher and Bunny Shooter. They’ve combined for over 80M downloads. No big deal.
The problem, however, is that those 80M downloads were not translating into big dollars. Gui knew he could deliver a ton of installs, but the ad solutions out there were only paying peanuts. Like a true marketer, he realized the above opportunity with top grossing companies and inked a deal that he would try out on his own apps.
The result? A waterfall of money. Millions of dollars. The kind of money that changes lives permanently.
And just like that – the birth of RevMob.
The rise of mobile ad networks
What Gui did was essentially create an entire ad network with premium advertisers in order to maximize the eCPM (earnings per thousand) for developers and publishers that promoted the advertisers. The beauty of this model is that with only a few clients who want unlimited downloads, everyone’s happy.
When I first heard of RevMob in 2012 I was skeptical, per usual, but figured I’d give it a whirl. I had some success with Chartboost and wanted to see if these eCPM claims held up.
I installed the SDK in about 8 minutes and released a few apps with the new code.
The first week I had my apps pulling in anywhere from $18 eCPM up to $125 eCPM. My app revenue went up 10X. I all of a sudden realized that everything in my world had changed – this powerful system was working….and changing my life. Well, for a short period of time.
The Fall of an Empire
Like all good things, my RevMob campaigns came to an end. Presently in 2015, RevMob can only be found in a handful of my apps and $125 eCPM is completely unrealistic.
With the millions of apps added to the Store since 2012, people caught on to RevMob and other (better) Ad Networks have emerged. That isn’t to say a $125 eCPM is impossible.
There are going to be some people who make it work with their own apps and strike it big with in-app purchases and various traditional monetization models, but mark my words – Ad Networks are continuing to evolve with more features and smoother UIs.
What you can expect to see are $1-$50 eCPM. Still solid numbers. Ad Networks now have a lot of additional functionality. Instead of the traditional RevMob full screen interstitials, you can:
- Add buttons, text and colors
- More Games screens
- Video interstitials
- Rewards campaigns
- Scrolling features to show more apps
- You can even link ad interstitials to IAPs
A lot has changed since 2012 when I was introduced to RevMob.
Apple has caught on too. More rejections have emerged, which isn’t necessarily a bad thing. Like us kind good hearted developers, Apple wants to make sure their users have the best experience possible and aren’t bothered by nagging popups.
However, Apple has little control over 3rd party SDKs. Campaigns can be switched off during the review process and turned back on after launch if a user is really inclined to get it in the Store.
Feel the Vibe
Ad Networks and increasing your eCPM is all about experimenting, you gotta feel the vibe man. When I noticed my early day RevMob campaigns dropping, I knew it was time to act.
The good news is my gameplan hasn’t had to change too much from the early days. Get people to download my Free app so they they can get MORE free apps.
Turn your pop ups into part of a selling process. If people like a free version of an app, use ad networks to promote better features in the PRO version. These convert well, the biggest challenge is testing the right marketing text and image.
People always ask what my favorite ad networks are. My first response is always Chartboost, hands down.
They’re the best for games, convert better than a Transformer and are just solid guys to work with. I’ve developed personal relationships with some of their staff, and they genuinely put themselves out there to help others and increase conversions.
New ad networks popup everyday. Some are worth looking into, others feel like cheap knockoffs.
My advise is to pick some of the popular ad networks and experiment. Here are a couple ways you can help conversions:
- Change ad placement and order
- Change campaign type (interstitial, banner, video…)
- Target your audience
These 3 will heavily change your ad conversions. And they’re somewhat painless.
Do Yourself a Favor
Sign up to Chartboost, Applovin, AdMob, Xplode, and Vungle today (for free). You don’t need to integrate all of them, but scroll around and see which ones you feel comfortable with.
If you have an app, you definitely should. If you’re thinking about it, you definitely should.
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