Before we get on to building the first stage of your spec, it is worth considering some of the monetisation options for your app if you haven’t already (if this isn’t a factor for you, I still advise you read this section as it may give you some ideas you hadn’t thought of).Whether it’s for yourself or your company, monetising the app may be a big reason for your decision to put it in the App Store in the first place. There are several common approaches:

#1 Direct sales on the App Store

Currently Apple takes a 30% cut of every sale on the App Store but the rest is yours to keep.That doesn’t mean you necessarily want to price your app at $100 (though for a high-end app aimed at a niche market this may well be the most profitable approach). 30% may sound like a lot to some but if you are the creator of Angry Birds and selling six million downloads and counting (‘Angry Birds sells 6.5M units on iPhone and flies to new smartphones‘) for $0.99 a download, that’s still enough to keep you of trouble for a while.

Paid apps might not be the right tactic for everyone though (I talk more about pricing strategies in Part Four & Five), instead some other monetisation methods may be desired .

#2 Sponsorship

Time Out London allows sponsor Smirnoff a range of branding opportunities in its app

Time Out London allows sponsor Smirnoff a range of branding opportunities in its app

Many of the Time Out apps have successfully used this approach to offer a free app, get an instant contribution towards their development costs and ensure a profit. All without negatively impacting on the user experience.

Examples: Time Out London / Time Out Dubai

#3 Selling banner ads

Time Out London allows sponsor Smirnoff a range of branding opportunities in its app

You can embed small banner ads and other types of advertising into your iPhone App automatically.This is fairly easy for your developer to accommodate, just choose the ad network (or networks) that suits your mobile app best and let your developer know the details.

Currently there are a lot of networks to choose from, the right one for your will depend on your needs. These include:

#4 Micro payments

Esquire uses micro payments in its app

Esquire uses micro payments in its app

Micro payments are one of the best ways of adding an extra revenue stream to your app.The beauty of them is that, if done using Apple’s existing system, the micro payment is simply another transaction made with a user’s App Store Apple ID and credit card.There is no extra process for them to learn or trust. It’s something nearly every user has already done.

How can micro payments be used then?Take a look at what others have done to get some ideas if you need to, but it’s only limited really to whatever you consider appropriate for your app.

If you’re producing a game you could sell extra levels or other add-ons. If you’re a publisher or other media organisation (or budding publisher/media organisation) you can create an app (either paid or free) and then sell subscriptions to magazines (and/or other services through it).This is something that is really taking off on iPad, with Adobe, for one, showcasing a really nice solution for this (if this is something you’re interested in, more detail follows in the ‘Alternatives’ section in Par t Two of this guide).

#5 Lite and paid versions

Whether it’s the paid or lite versions, both of these apps have got a lot of attention

Whether it’s the paid or lite versions, both of these apps have got a lot of attention

As used by many apps, the lite and paid version strategy is very common, and can be extremely useful. It involves launching two versions of your app.

  • The ‘full’ version is your original vision for the app with all features but only available as a paid app (ads are often disabled in the ‘full’ version to reflect the ‘paid’ experience).
  • The ‘lite’ version of the app (often marked with ‘lite’ on the app’s App Store icon) is a version of the app with some features disabled or limited (but still enough to give the user a decent experience). It may also feature banner advertising that doesn’t appear in the full version.

A classic case of this strategy was seen in the success of the iShoot game1, which was one of the first App Store ‘headline grabbers’.

Created by Ethan Nicholas in 2008, iShoot originally did little in the iTunes store. Priced at $2.99 it was off the radar until he released a Lite (free) version of the same app.Then suddenly the Lite version shot up the App Store rankings as curious users who wouldn’t download the paid version gave it a try.Very quickly this started driving sales to the paid version, both through customers trying the free version and then wanting more and from all the exposure the Lite app was now getting in the Top Free Apps section of the App Store.This interest eventually took the same pad app all the way to the #1 spot, still at it’s original $2.99 price tag but with more sales than ever. Ethan quit his day job pretty soon after that.

The App Store has a few more apps (and a bit more competition these days) but Ethan’s story should show the benefit of this strategy and it’s not just an old tactic. It was very successfully used by Angry Birds and has also been piloted by recent success story ‘Shazam’.

It is up to you how you monetize your app but I think the best strategy is to use one or two of the approaches above or risk over-complicating your app and damaging the user experience.

If you’re looking to do more research at this stage, a quick search on Google can bring up lots more examples and case studies, for example: