How do free apps make money [ 10 Proven Strategies]

Introduction

How do free apps make money? 
Have you ever wondered how to create an app for free and make money? Mobile apps were the biggest hit of the pandemic period, i.e 2020.

Some technical agencies have literally made customers trust that they own the app. Don’t just launch an app, establish a connection between yourself and your customers. Tell us, how are you designing to launch your app?

To use an app, we usually go to google play, type the name of the app and download it. But what happens behind the scenes is still a problem.

The ultimate goal for every business is to create free apps make money, so how would you not locate a hot-spot that keep your loyal customers to earn revenue from it.

This blog is for those business persons who want to learn — how free apps make money and how to make money from apps to earn passive income by publishing free apps in the mobile apps market.

Difference Between Free Apps and Paid Apps

In fact, checkout an interesting graph that shows the difference between a number of paid app downloads vs. free app downloads in 2011–2017:

statistics-free apps make money

And the experts also predict that, between 2016–2020, global app revenue will double!

So if you think that free mobile apps are not as profitable as much as the paid ones, then you couldn’t be more wrong. The fact is, 98% of worldwide revenue comes from free apps, according to Googl Play. So, you need to think more about how to make money developing apps.

Free Apps

As most of us know, free apps influence more users because they are free to use and usually one does not have to pay to use the app.

Here the customers have three options: One is to stop using the app, the other to continue using the free version and last upgrade or pay for the premium version.

These apps clearly attract more target users and increase visibility and downloads.

These apps are a great way to optimize your app on the App Store, to take advantage of great reviews.

They are less expensive because they are not complicated compared to the paid ones. Different monetization possibilities in the future.

  • More Customers
  • More Reviews
  • Lower Customer Expectation
  • More Downloads
  • More Visibility

PS: You can also earn money from free apps.

Paid Apps

As the name reveals, you have to pay as the name recommends, you have to pay to download the app and use it further. For this type of app you don’t need to think that how to make money from apps .

Only loyal customers pay for these apps. Enlarging number of downloads leads to increase in revenue. As you pay for the app, you don’t get to see annoying ads here so the user experience remains good throughout the usage.

Paid apps have less downloads, you will automatically lose out to potential customers who are not willing to pay.

High User Expectation- You have to make sure that your app works flawlessly and provides a complete set of features.

Despite lots of great reviews, people are less likely to buy the app if they don’t try it out first.

Also, as most of the businesses launch their app for free to get more downloads and users, therefore the competition in the market for the paid apps are less.

Listing the benefits of a paid app:
  • Loyal Customers
  • Revenue System
  • No Ads
  • Less Competition
  • Better Engagement.

Now let’s examine, you want the users to use the apps without any restrictions first. The smart move here would be to make your app free. But when you’re creating your app free, Remember, the end goal of your idea, yes ‘revenue’. You will be surprised to know that even free apps can earn money. Yes, you read it right.

11 Most Popular Ways you can make Money with free apps:

11 ways to make money

1. Advertisement

Ads are probably the most common and easiest to implement when it comes to free apps. And it is also done through third party ad networks. According to the latest Statista report and study, here are the details of mobile ad spend in the year 2019 and expected in 2020.

Year 2019: US$ 190 billion
Expected in 2020: $280 billion

Whenever this question comes: How to earn money from mobile apps? Your first thought would be to use ads to monetize apps and make money and there is nothing wrong with that.

Advertising, in simple words, means showing advertisements to the user while using the free app through a third-party app. Most of the free apps make money through advertising.

Additionally, ads are considered the best way to earn money from apps. As an app owner, you just require to show your ads within the mobile application, so you can simply get paid from third party networks and ads.

There are mainly 4 kind of show ads which are disposed by app provide for monetization. But, as an app owner, you need to see if the target users are searching these ads amusing or they are adblocking them.

free apps make money
  • Cost — per -impressions:

If your app shows ads to 1000 different users, then you will get a fixed amount for the same. Also called cost-per-mile.

  • Cost — Per- Installs:

If the user whom you’re showing an ad about, installs the app, that means your target is achieved. You will be earning money if the user installs the app your app is promoting.

  • Cost — Per -View:

You can also charge your advertiser for the number of views you are giving while allowing ads to play in your app.

  • Cost-per-click:

These are usually for display ads, if your user clicks on the display ad promotion done by the advertiser, you will get paid. You can set an X amount per click and here you go.

Advertisements can be in multiple formats. There are usually banner ads, video ads, native ads, and intermediate ads. They all have their rooted places and they appear there.

2. Sponsorship

Sponsorship is one of the less commonly used monetization methods, but it can still be an interesting strategy.

This is another interesting way to earn money. Here the app owner needs to find a suitable platform to launch your app on another platform.

It would be a good idea to launch the app using the brand identity of a well established brand that has a large audience base.

As influencers are like general audience who distribute content according to their experience and hence people follow them. The importance of his experience and reviews is much more than that of a celebrity.

Find relevant types of Influencers and reach out to them to give your brand a shout out.

3. Email marketing

email marketing

Email has now become an important part of our lives. And using the platform that users browse through most often is a smart move.

This is done through email marketing. All you need for this is the cream and verified data as well as a great deal of ingredients.

It is a great call to update the subscriber with the latest deals and offers. If your business has a lot of new features, products, rewards and apps news to share, then undoubtedly go for it.

4. Subscriptions

It is a great call to update the subscriber with the latest deals and offers. If your business has a lot of new features, products, rewards and apps news to share, then undoubtedly go for it.

Using a subscription strategy is considered the best and most useful app monetization strategy.

App publishers can choose to offer free content in their apps for a limited time and then charge users a subscription fee that will allow them to access the full content without any restrictions.

This type of strategy is often used for cloud services, audio and video streaming, and online news services.

Membership is further into two categories:

The subscription lasts for a fixed period (eg: 3 months or 1 year) and once it expires, it has to be renewed again.

Subscription that automatically renews after the free trial ends. Once you’ve upgraded the app, the app asks you to try the app for free, but it requires you to enter credit card or debit card details. Apart from this, it keeps on deducting the amount as per the monthly fee.

5. In-App Purchase Model

in app purchase- free apps make money

If you have freemium app model then it is a powerful way to earn money. Here the app provides its internal deal breaker for the user.

App Store takes care of all these transactions. You can earn money from free apps by offering internal deliverables and improvements.

Again there are two types of offerings in the ‘in app purchase model’.

One is consumable (for shorter period of time) and the other is non-consumable (offer that lasts for a longer period of time).

6. Referral Marketing

referral marketing

Referral marketing involves promoting a third-party product or service as a way of optimizing revenue opportunities. App publishers may promote or sell affiliates’ products or services based on the number of clicks or installs.

To do this, you can use pop-up ads to promote someone else’s app or advertise products. There are multiple types of referral marketing models that publishers use in their development.

Cost Per Acquisition or Cost Per Action (CPA):

There are many affiliate networks you can use to find the right network for your free mobile app. In this model, you can either promote other apps, advertise products with pop-ups, or promote apps through the in-app store and earn money.

Cost Per Click (CPC)

This type of revenue model is depend on the number of clicks on the ad disposed. You can join to a popular network like Adphonic or Google’s AdMob for this model.

They both provide text and display ads which will help you earn money for the app.

Cost Per View (CPV)

This model involves charging based on the number of ad interactions or video views.

Smartphone game development company Brighthouse successfully increased its app revenue by 130% through the Cost per View network.

He used video as well as interstitial ads in his smartphone games to build natural breaks between game sessions.

Cost Per Install(CPI)

Cost per install is a kindly new marketing mechanism and is the mobile equivalent of CPA (Cost Per Acquisition) in the web marketing world.

The cost per install is exactly what it looks like — you get paid for each install of the app advertised in your free app.

There are many platforms providing software for you to install in your app.

Fees for this network range between $0.80-$3.00, and the online affiliate network has a diversity of campaigns to create global traffic while promoting other apps, making it an attractive marketplace to play in.

7. Collecting and Selling Data

As you know, apps gather a lot of users data in terms of user conduct or usage of other apps. All these user behavior data is desired by many researchers in various fields.

This means that the app for free publishers can sell the behavioral data of their users to these researchers and earn a good amount of money.

The data typically consists of users’ email addresses, social media accounts, and personal preferences.

This means that the app for free publishers can sell the behavioral data of their users to these researchers and earn a good amount of money.

The data typically consists of users’ email addresses, social media accounts, and personal preferences.

There are two methods to advantage from this model. You can either track what users do and sell the data to outside companies and researchers, or you can use the raw data for your own purposes.

If you have any query regarding making money making apps for android, please feel free to see the image below to get information about monetization strategy.

The same strategy applies to iOS apps as well.

8. Freemium Sell

When it comes to freemium upsells, freemium apps are available to download for free, but include paid features. These paid and premium features can be accessed through in-app purchases.

In this type of freemium model app, users download the app at no charge, and if they like its content, they can get full permit to the functionality by making a purchase.

By using this strategy, it is easily possible to get a lot of new users as premium features are optional.

According to the mobile application development business, in Freemium Upsell, customers can download the app for free, but will have to pay for additional services.

Furthermore, this strategy is extremely common for education and health and sports applications, allowing users to get premium features at a particular cost.

9. Physical Purchases

physical purchase

There are many eCommerce businesses and startups that have started using free applications to sell their products or physical goods like mobile cases, t-shirts, toys etc.

Through apps developed on the App Store. Let’s take the instance of one such free application, Angry Birds, which increased profits from branded products.

Through this free gaming app, Rovio company sells around 1 million branded T-shirts, backpacks and stickers every month.4

In fact, Amazon is providing a method to give rise to revenue from merchandise by building a merch self-service program to sell custom branded T-shirts from its app.

10. Transaction Fees

Transaction fees are the best method to monetize your apps. This is the best method to earn money from your apps on the App Store.

This is especially possible with apps that provide a platform where digital transactions take place on a regular basis.

You can charge a small fee for every single transaction you make on your app and earn a lot of money. In this way, you can create your own mobile apps to earn money without investing much money.

11. Crowdfunding

crodfunding-free apps make money

Crowdfunding is the newest thing in town. Another monetization way to make money from free apps is crowdfunding, which is new in the industry.

Here an app with a great idea, great initiative and extraordinary components gets funded all over the world. In simple words, it means a small amount provided by a large group of people.

There are many crowdfunding websites that bring together investors and entrepreneurs. This is usually done for charitable events, NGOs and small startups.

According to a report by Mobile Growth Stack, non-gaming mobile apps are extremely good at crowdfunding.

3 Tips for Choosing the Best App Monetization Methods

1. Interpolate app type

Before deciding on any monetization model, you need to understand your app type. What and how does your app solve a problem?

Once you have a clear idea about the purpose, you will be able to select the appropriate monetization method for your app on the App Store. For example, the subscription model for content and service apps.

For example, the subscription model for content and service apps. And it’s unlikely to work for single-purpose apps, gaming apps, shopping apps.

2. Competitor analysis

competitors analysis

Competitive analysis is not just about the features, functionalities and design of the app.

With a proper study of your similar competitorsyou can easily figure out the monetization business model for your app.

Ask yourself some questions like how are the competitors earning money? Are there any distance that could be chances for you?

Once you know this, you have a fair idea of ​​what the challenges are in your business.

3. Analyze the Target Audience

analyse the target audience-free apps make money

To successfully earn online revenue via app monetization strategies, you require to study your target audience in advance.

How much are they willing to pay? In short, users should know the real value of making a purchase.

After going through all these how do you make money from free apps, you are almost ready to develop your idea in the app.

Our application developers have designed a handy app cost calculator to make it easier for you to estimate your app development cost.

Remember, being a marketer, your main focus should be to identify the needs of your target audience and then what your business has to offer.

Don’t overlook the money you spend on building an app

Look at all the features and decide how to make money from mobile apps and which feature you want users to mark the upgrade for.

Because every penny and every feature plays an important role in your business.

Take an brilliant call post analyzing your cost, components, USP and target audience.

Also read how much does it cost to develop an app?

Conclusion

With so many app monetization models for making money with apps, it is important to note that each method has its advantages and drawbacks to give when monetizing an app.

So when starting to work with a reliable mobile app development firm, you should keep the app structure and target audience in mind before choosing a monetization strategy.

So, that you clearly strategist how to make money developing apps.

Our expert team is here to help you with everything from app development and launch related issues. We can suggest you from the beginning on how do apps make money.

Contact us, as we have dedicated app developer professionals who have already build-ed apps with best features. Send us an email at projects@deliverable.services with your project query, and Our team will contact you within 12 hours.

14%
portion of total synergy savings derived from IT consolidation
Your Startup team structure or failure depends on the composition of your initial crew. According

Explore Other Successful Projects