Every developer aims to make money with software, but how do you do it? Fortunately, there are several ways to monetize anything. None of these monetization methods are very difficult.
And they can be mixed and matched to meet your needs and your revenue goals. Some work better for mobile apps and some work better for desktop, while some work just as well for both.
The freemium model of advertising is one of the most common forms of monetization. This monetization method also goes by the name of “in-app purchases.”
It works like this: you offer your software or app for free, but with limited features. Users that want access to extra features must pay to access those features.
Games use this quite frequently and very successfully. Gamers who want certain power-ups, for example, may purchase those extras for real money.
This allows developers to distribute software for free, which vastly increases the number of downloads. But developers still make money in the process. Though turning freebie-seekers into paying customers can be tricky, the effort often pays for itself in dividends.
2. In-App Advertising
This is another common monetization model, which you’re probably familiar with. Ads are placed inside apps, either on a piece of the screen real estate or between screens (interstitial ads).
These ads earn income per thousand views or per click. Revenue then varies based on the ad network, the type of ad being displayed, the audience, and so forth.
This monetization method is second in popularity to the freemium model. And these two methods are sometimes combined: users can pay to remove ads, for instance.
To earn money with in-app or in-software advertising, you need a lot of users for your app. A larger percentage of users end up converting on advertisements than on freemium upgrades, but the revenue per conversion is less.
3. Paid Products
With so many free apps and software programs online, it’s hard to get people to purchase an app. Customers who will spend five dollars on a latte won’t spend two dollars on an app. And, chances are, you’ll be competing against an app that’s free or freemium.
When you’ve got the clout, marketing resources, or market share, however, this is a top monetization strategy. If, for example, you’re the only company offering a niche product, then charging for the product may make sense. Also, if your company already has a reputation and a solid following, you may be able to charge for a piece of software or an app.
Game sequels or high-quality products are examples of software programs that may benefit from this approach.
Pay-per-install is trending as one of the most effective advertising, distribution, and monetization methods.
This approach is ideal for making money with software that’s distributed on desktop platforms. CodeFuel’s InstallFuel, for instance, supports Windows and Mac OS X. There are also options for mobile developers.
To monetize with a pay-per-install program, you integrate your software with a smart installer. The best smart installers aren’t just scripts, however, they’re full platforms that allow you to customize the installer to meet your needs.
You can tailor the look and feel of an installer, pick and choose the products you promote and advertise your own software through the network’s partners. Analytics gives you a 360-degree view of downloads, conversions, and more.
5. Affiliate Marketing
Affiliate marketing isn’t just for websites. Developers can design software and apps around affiliate deals. This can be one of the most lucrative ways to make money from an app or software program. But it can also be challenging and limiting.
In other words, if you want to develop a software program and earn money from affiliate deals, you’ll need to design your software for that purpose.
Travel apps and websites are good examples of programs that use affiliate marketing to earn money. Websites such as Orbitz and apps such as Hipmunk are simple travel programs, but each sale earns developers a commission.
As you can probably guess, this can be a virtual cash machine once it’s up and running. But it’s also tough to integrate it with a pre-made software program or app. A language-learning app or video game may be better suited to in-app advertising or a freemium model.
These are the top five monetization models, though there are other creative methods of earning revenue, such as selling analytics or code. Subscription models, when implemented properly, can also be a lucrative method of earning revenue.
The major benefit of all these models is that they operate relatively independently. Once you have an app up and running, you only need to tweak your monetization program and update your app from time to time. Developers can stack up to their apps over the long run: the more apps you release, the more money you’ll make.