How Do Free Apps Make Money? Build Your Strategy

Today the market of mobile apps is growing quickly, and everyday developers try to promote their applications and make them compatible. But not everyone is successful in the long run. If you think that only paid apps can bring you income, then you are definitely wrong. Learn how do free apps make money and realize your dream as soon as possible.

How to make money on free apps. The best strategies

In case you are working on a new product, or you want to increase the revenue of the existing one, then you should discover monetization strategies on how to make money from apps.

In-app advertising

According to recent surveys, media customers reported that they spend 45% of their budget on advertising on mobile platforms. For app developers, it is one of the easiest ways to earn money. They simply need to show embedded commercials along with their product and get payment from a third party. As a result, the developers are enjoying impressive customer engagement in comparison to other forms of advertising. Generally, five types of mobile advertising can be outlined:

Native ads. They are integrated into the application so nicely that users do not notice how easily the ads are becoming a part of their experience. For instance, when you use Snapchat, you see the ads that are based on your location, interests, previous actions, etc. This way, the developers have more chances to boost the income as the users are less irritated with the native ads.

In-stream/ in-app video ads. 10-30 second clips appear during natural pauses or on-demand.

Interstitial ads. Another type is pop-ups that are occupying the entire screen and can be closed after opening the promoted page or cross button. These ads appear in the news, messaging and other content between game sessions, etc.

Banners. Users see ads of different sizes at the bottom and top of the screen. Of course, they can keep using the application, but it would be rather annoying. Such ads also make the click-through rates lower.

Incentivized ads. They reward people for definite in-app actions like content sharing, ad interactions, etc.

In-app purchases

This is another way to make money off apps. According to statistics, in-app purchases generate the highest income for owners. About 50% of the top products come up with in-app purchases. This model requires incorporating a payment system and paying fees to the payment-holding organization. The app store keeps about a 30% commission from each purchase. As for the items which the publisher can sell, they are as follows:

Consumable virtual items can be used after purchasing only once: health points, power-ups, extra bonuses, etc. The best example is “gold”, or “coins” in games.

Non-consumable products remain with the users forever. For example, you can purchase icons/stickers for blocking the advertisements or unlocking a new game level. As for the educational app, such items can help you open extra functions or tips.

Subscription

You can often meet such features in cloud services, digital news portals, and video/audio applications. The publisher offers access to a definite service with unlimited content or a trial period after paying for a subscription. The person chooses the type of subscription in accordance with expected features and available budget. This monetization model is one of the least used because the app must have a vast audience to keep people engaged.

Paid apps

People usually spend a lot of time and effort on building no ads apps, so it is not surprising that they want to get revenue for the final product. But, this approach is rather controversial in terms of effectiveness. Most researchers say that mobile users do not prefer spending money on their applications.

Sponsorship

Application devs design a product in a definite market niche. Along with it, they create a user base. Afterward, the developers get in touch with a potential sponsor company. If they deal, the next step is updating the product design, refreshing the content, and making any other necessary changes so that the product suits the needs of a particular organization. Sponsorship can take place in two ways. The first one is receiving a sponsorship fee per month or splitting the revenue that is generated by the item with the sponsor.

Affiliate income

You can make money from my phone for free using this model. It is connected with mobile advertising, AdMob, and other companies that are specialized in picking up suitable affiliates for mobile applications. Then the publisher promotes the product via ads or uses “in-app stores” to trade an affiliate’s services or products. In return, the revenue split is received. It is based on the CPA (cost-per-action) model.

If you want to know how much do apps make from ads, then look at the most popular models that are applied in affiliate marketing:

CPI. This model helps the publisher earn money whenever a person installs a product.

CPM. The advertiser is charged money every 1,000th time that the product is shown.

CPC. The publisher gets a fee depending on the number of clicks on an ad demonstrating.

CPV. Usually, video ads use this type. The payment is based on clicks or any other interactions with the video.

CPS. The publisher gets a percentage or a fixed commission after the user has made a purchase.

Selling merchandise

Another fantastic option of how to make money from mobile apps is selling merchandise. It is an especially nice solution in case you are designing an e-commerce application to trade services and products. With this model, the application can be downloaded from the app store free of charge. Moreover, you can easily combine it with email marketing and eventually receive the products out there for the right audience. Do not confuse this model with in-app purchases where users can purchase bonuses, virtual goods, currency, etc. Selling merchandise may be a great option for your business in case it doesn’t include any physical merchandise.

Crowdfunding

App developers share their ideas on specialized platforms that are called crowdfunding (Kickstarter, AppsFunder, Indiegogo. etc.). They seek support for app development and further promotion. In most cases, exactly non-gaming applications receive such funding. The author has to convince people that this product is worth the investment. It must solve certain users’ questions.

Free app monetization common mistakes

The process of monetization-free money-making apps is more difficult than it may seem to be at first sight. Only good planning will save you from common pitfalls. Before you decide how to get free AppStore money, mind that a selected option shouldn’t irritate your users. For example, people will not certainly like to see a pop-up just at the moment he/she is streaming the video. The idea is to choose the approach that will look natural while using your product.

Also, it is important to decide how to make money from the phone app before you start developing it. You see, every monetization strategy has different results on various platforms. It happens due to differences in UI and policy of every App Store. What is more, some ad formats are not presented on all platforms. It means that you should have different strategies on how to earn money from developing Android apps and iOS apps.

Always mind the Analytics. The information that you can get from it is very useful. It includes data on active users (location, gender, age, etc.), number of installs, etc. This way, you will not only understand whether your strategy is successful but also draw the path to follow. Finally, you find your target audience at last.

Get more users to get more money

It’s clear that people will not download your application if they do not know about it. That’s why you need to attract as many customers as possible to increase your income. The more users know about your project, the more they will be eager to download it. One of the best steps to reach this goal is to promote the app. You can either hire a specialist to promote apps that you can make money or do everything on your own. Anyway, there are a few important rules to mind:

Select the audience. It doesn’t matter what type of application you design to make money freeware; you always need to remember about the target audience. For instance, if you want to present the product to pet lovers, then you should add relevant content like animals’ pictures. In any case, it is recommended to use MVP for collecting the feedback, this way, and you will discover more about your active users. For instance, if the app is used mainly by kids, then you will add no content to meet their needs and expectations.

Stay close to your customers. If you are working on an app that is connected with the beauty industry, then it is reasonable to visit SPAs; or educational establishments if you want to present the educational app. The idea is to battle for every person. Tell people why your application is useful and how it can be used to satisfy their needs.

Make the app social. This idea on how app make money is not new. Still, it is worth mentioning once again. The more reposts your app has on social media; the more people will see it.

Why not make it paid?

If you are wondering whether making an app paid is a good idea or not, then mind, it is not actually. Numerous surveys show that people are deciding to download the app only if it is free of charge. By presenting a free application, you have more chances to attract potential users. Along with it, do not aim to create an app that is completely useless without extra in-purchases, as in this case, the person will surely delete it at once. Instead, you need to let the person understand that this application is worth his/her attention, and with extra items or a premium subscription, it will be even more efficient.

Freemium Apps vs. Paid Apps Market

Nowadays, people use mobile applications to solve several issues. With a good app, you can order food delivery, find a new friend, gain the necessary knowledge, etc. While the app market is increasing quickly, users are very picky. Generally, they do not have more than 5 active apps. Most of them look for ways on how to get apps that cost money for free. That’s why developers are facing more and more difficulties with how to make money creating apps for Android or iOS. People are looking for high-quality products with excellent performance that is free of charge. Recent research proves that users are more likely to spend money on in-app purchases rather than paid applications. That’s why developing a free app seems to be a great idea for businesses of any type. The next step should be deciding what monetization strategy to use.

How much money can you make from an app?

Application has so many opportunities for you to earn money, but after all, only a few apps make money. It may sound surprising, but millions of applications end up making no income at all. People are eager to get apps that cost money for free. Let’s look closer. 200 leading applications make up to $82,500 per day. This number may drop down to $3,500 per day in case we broaden this criterion and consider 800 apps. Of course, it is not an exact number, and it will vary depending on the categories. Leading entertainment applications may make about $3,090 per day, while gaming apps about $22 thousand.

In a nutshell

Earlier, people had no idea how to create an app for free and make money and that it is possible in general. Times are changing as well as the industry. Today, developers do not only cover the expenses but get extra income with how do apps make money strategies. There are plenty of ways that you can use to reach your goal, but mind that none of them is perfect and suits everybody equally. You should choose the option, explore it well, and apply if it is effective. If not, then keep your research and pick up the better option on how to make money from mobile apps.

Published by Dana Adams
Content Marketing Manager