How to make money with mobile apps

You too can be a success at building and selling mobile apps. Read Gregory Kennedy's advice on how to develop a successful app and turn that success into a career.
Written by Ed Burnette, Contributor

As director of global marketing at mobile ad network InMobi, Gregory Kennedy has learned a thing or two about helping developers make money with mobile apps. In this Q&A, Gregory offers some advice for app developers of all platforms.

What's the key to success as a mobile developer?

[Gregory] Focus on providing customers a great value proposition. If you’re making games, they need to take maximum advantage of the mobile experience. Angry Birds is the best example of this. The gameplay is simple and you only need a few minutes to play to the next level. It’s ideal for mobile. Sustaining success in digital media is more challenging, we’ve seen huge companies rise and fall in only a few short years. Being flexible enough to evolve is key, but you also need to develop a strong sense of what works in digital and stick to it.

Once you have an idea that works, then what? How do you turn that into profit?

There are four—and only four—ways to make money with apps.  The most obvious is through paid downloads, in which you set a fixed price for your app, customers purchase it, and the transaction usually ends there.  You could also seek an exclusive sponsor for your app.  It’s not the most economically sustainable method of monetizing, but it might help you establish yourself enough to make your next app a success.  Then, there are the increasingly prominent in-app purchases, in which your customer might not have to pay anything at the beginning ("freemium"), but will have the opportunity to make purchases within the app to enhance the experience.

[Read: Survey says: Mobile gamers prefer free games that are full of fertilizer]

And finally, you can sell advertising space within your app. Provided you have a good match between app and advertiser and an installed base large enough to support the volume of impressions needed for profit, this can actually make you more money than you can with a pay-per-download model. I always recommend developers mix and match models to their particular app business. The more monetization strategies you can employ, the more money you will earn.

What about marketing?

With over one Million apps in the world, competition is fierce. You can have the greatest app in the world, but if you can’t get the word out about it, nobody’s going to download it.

Should I worry about piracy?

If you’re developing apps for iOS only, you won’t really need to worry about it. Apple is committed to copyright and has done a good job at protecting the eco-system.  But of course Apple isn’t the only player in the game, and piracy is becoming an issue with Android apps.  Here at InMobi, we’re actually working on a technology that will still display ads in pirated apps, so that you continue to make money from your advertisers.

If you don’t develop for Android you’re missing out on a huge segment of the market. In a recent Mobile Insights Report, which covered August through October of 2011, we found that 31.1% of mobile ads were displayed on an Android device. Piracy is also not an issue if you focus on ad supported apps. Plus, unlike iOS apps, Android apps are available through multiple stores worldwide, so your potential for exposure can actually be even greater.

Before joining InMobi you spent many years as an artist and creative director. Why did you transition to high-tech marketing?

I was always good at that strategy and concept aspect of advertising. I found my clients responding positively, so after a while it just made sense for me to go onto the business side full-time.  I like to jokingly say that a good creative director is 85% marketing manager, 10% high school principal, and 5% creative. When I transitioned, I only had to give up that 5%.

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