How Do Free Apps Make Money? Proven & Popular App Methods

How Do Free Apps Make Money? 11 Proven & Popular App Monetization Methods

Author image By Manish Patel  |  Monday, February 3, 2020 04:52 PM  |  4 min read  |   700

Apps Make Money

Many entrepreneurs across the globe have a ubiquitous question in mind, “How to make money from free mobile apps.” Well, free apps have always exceeded the paid ones in the Play store of different operating systems. Before we clear all your doubts, do you know Techcrunch has mentioned that the demand for the app is showing signs of slowing down anytime soon? Although the revenue of paid applications has witnessed a downfall to 37.8% from 75.9%, still the mobile app market is worth billions of dollars.

Here’s an image showing some exciting facts about the mobile app market:

Therefore, if you think that free apps are not worth it, then you have a wrong perception because 98% of the companies earn revenue from free apps.

To understand how free apps make money, we have shared 11 effective tips for the businesses, which are as follows:

Mobile app market

1. Advertising

Advertising is the most typical factor that can help you make money with apps, which is accomplished through a third-party ad network. As per 2016 statistics, 7 out of 10 companies used advertisements for earning better ROI from free apps. Using ads to monetize from free apps is very easy; all you need to do is display commercials inside the mobile app and get paid through the third-party network.

You can quickly get paid by per click, impression, or every time the user installs the app through the ads. There are majorly four types of ads that are displayed by the app providers for monetization:

  • Interstitial ads
  • In-app video ads
  • Banner ads
  • Native ads

2. Selling merchandise

Another unique and innovative approach to monetizing your app is selling merchandise in your free app. Many eCommerce businesses build free apps to sell physical goods such as apparel, toys, shoes, etc., which can be sold by app or email marketing. To encourage merchandisers to optimize this strategy, Amazon has taken the initiative and introduced Merch by Amazon which permits publishers to create their artwork, upload it to their platform, and promote their products.

3. In-app purchases

As the term defines, in-app purchases are the purchases made within the app and are usually seamless to implement. To simply put across, in-app purchases offer the ability to sell a variety of virtual items from the app. According to Forbes, in-app purchases convert the app into money-making apps by generating higher revenues for businesses. Typically, this model is used by game publishers, mostly because of digital money. Thus, it makes an interesting fact for converting non-paying app users into paying users.

4. Referral marketing

Referral marketing is all about promoting a third-party product or service as a way to optimize revenue opportunities. App publishers can encourage or sell affiliates’ products or services, depending on the number of clicks and installs. For this, you can use pop-up ads to promote third-party apps or advertise products.

There are different types of referral marketing models that publishers can optimize:

  • A Cost per acquisition (CPA)
  • A Cost per click (CPC)
  • Cost per install (CPI)
  • Cost per view (CPV)

5. Sponsorship

Sponsorship is not that popular among businesses when it comes to the monetization of apps, but it can still be an exciting strategy. To simply put across, sponsorship in your application can be a powerful app monetization strategy, if the app builder builds the right niche app for a targeted audience and initiate it on behalf of the other company. Similarly, app publishers need to take into consideration sponsors whose target audience is the same as the one being matching by the app.

6. Subscriptions

It is a useful monetization strategy that allows app publishers to offer free content in their apps for a set timeframe and then charge users a subscription fee that enables them to view full content without any hassle. The famous and common technique used by the majority of app publishers is offering a free trial and then charging subscription fees.

7. Freemium upsell

When it comes to freemium upsell, these apps are available free of cost to download but contain paid or premium features. These paid and premium features are accessible through in-app purchases. In this type of app, users are allowed to download the apps without paying any charge, and if they like the content, they opt for full access to functionality by making a purchase.

8. Transaction fees

The best way to monetize your free app is by charging a transaction fee, especially in those apps that provide a platform where digital transactions occur regularly. For instance, if your mobile app has an option for third parties that allow them to sell products and those purchases can be carried out online, then you can charge transaction fees.

9. Physical purchases

There are innumerable eCommerce startups and businesses that have begun using free applications for selling their products or physical goods like mobile cases, toys, t-shirts, etc., via developed. And one such example of this app is angry birds that have to raise profits by listing branded products.

10. Collecting and selling data

As you know, apps gather a lot of user data with regard to the user’s behavior or other app usage. All these user behavioral data is the most desired factor among various industries. This means app publishers can sell these data to researchers and make a good amount of money.

11. Crowdfunding

Another app monetization way from free apps is crowdfunding, which is new in the industry. In this technique, companies and startups share their ideas on platforms like Kickstarter, Crowd Supply, Fundable, Patreon, and Chuffed in search of donations to fund the development and promotion of the application entirely.

Bottom line

In a nutshell, the growth of the mobile app market is unstoppable. So, businesses that are planning to invest in a mobile app can be assured that they’re making the right choice as it can generate higher ROI. However, you need to be smart enough to choose the right strategy for app monetization for your free app to excel in the dynamic market!

How Do Free Apps Make Money? 11 Proven &
Popular App Monetization Methods

Contact Us

 

FAQs

1. How do free apps make money?

There are innumerable ways for companies to monetize their free app and advertising is the most profitable app revenue.

2. How much an app makes with millions of downloads?

An app with 1million downloads approximately earns $10000 to $15000 per month. I would not say on per day basis eCMP and impressions play an important role.

3. What is mobile app monetization?

App monetization means making money from mobile without charging for it. Introducing free apps in the play store and earning from it.
 


Author image

Manish Patel

Manish Patel is a Co-Founder of Concetto Labs, a leading mobile app development company specialized in android and iOS app development. We provide a one-stop solution for all IT related services.

Why Our Client Love Us?

  • Fast kick-off
  • Agile Ready
  • 98% Client Retention
  • 360-Degree solutions

Our integrity and process focuses largely on providing every customer the best recommendations for their respective business. Our clients become recurring customers because we always go beyond their expectations to deliver the best solutions.

Get In Touch
Kamika Kilgore
Customer for over 2 years Kamika Kilgore United States

Concetto Labs has been a fantastic partner in consistently delivering high quality, high value solutions to our organization. Their team does an excellent job of first understanding our processes and requirements, and then translating them into solutions that meet or exceed expectations. Concetto Labs has helped us simplify multiple processes and workflows as well as suggested additional improvements we had not considered. Their communication and follow-through are top tier. They have proven themselves to be a trusted partner and we look forward to leveraging their services on future projects.

Mr. Sieva Savko
Customer for over 4 years Mr. Sieva Savko Norway

Concetto Labs have provided us with a tremendous amount of help. Their competence in various IT fields led to a positive outcome while facing different challenges. A lot of value was given by their helpful professional staff. To describe this company in three words: effectiveness, collaboration, trust. I would also like to personally thank Mr. Tejas Patel for his positive, friendly, and highly competent approach. The all-around support provided by him made every task at hand a no-brainer.

Miss. Caroline Jack
Customer for over 4 years Miss. Caroline Jack South Africa

It has been an absolute pleasure working with the Concetto Labs team! We have worked together on a few projects now, all of which have been successful. You can rely on good communication and response times from these guys. And they go above and beyond to ensure that the result is achieved. Because of their great service, they have become an integral part of our business and we will continue to use them going forward.

Mr. Richard Bartlett
Customer for over 3 years Mr. Richard Bartlett United States

Concetto Labs is a group of incredibly talented individuals. They are very responsive and communicate with you each and every step of the process. I worked with Manish Patel throughout the entire process and must say that I have never conducted business with a more honest and professional individual. Together with his team, Manish created www.travcentiverewards.com exactly how we envisioned it to be. Thanks for all of your hard work.

Mr. Conrad Abraham
Customer for over 2 years Mr. Conrad Abraham United States

Concetto Labs team is my go-to for any simple or complex development projects. They have risen to the challenge. Great project management, communication, and super quick turnaround. I've done multiple projects with them and don't plan on changing that.

Mr. Edward Chin
Customer for over 4 years Mr. Edward Chin Canada

Concetto Labs was able to bring my complex idea to life. Throughout the project, Concetto Labs maintained constant communications and was always professional - considering I had no experience in what I wanted to create their welcoming attitude, patience, and knowledge in the field created the perfect environment to work in. I was so impressed with their work that I've kept them on board as my go-to experts. Thanks for the worthwhile experience and the breathtaking product.

Karuna Govind
Karuna Govind CTO & Co Founder (Coupay) London, UK

We started working with Concetto Labs due to the influx of work on mobile (Flutter) and frontend (React.js). It's been fantastic working with them. Good, consistent communication and good quality of work means they may be our first choice for many projects to come.

Arunabha Choudhury
Arunabha Choudhury Director (Fuzzann Technologies Private Limited) India

We are a healthcare IT company and wanted to build a Mobile Application for both Android and IOS using Flutter. The Concetto Lab team has been very patient with our project requirements and made sure all our queries are answered. It was a great show of professionalism and customer relationship. Even during the project, the team was very accommodating of all the changes we requested. The project was delivered successfully and we deployed the app in the Android Play Store. Overall, the entire process has been very transparent and the team was able to deliver exactly what we had envisioned the project outcome to look like.

GlobalClients
Good Firms Clutch App Futura Microsoft Associate Mobile App Top Developers Gesia