How Do Free Apps Make Money?

This is a popular monetization strategy with gaming apps, and there are a variety of options available. What you use will depend on the type of app you’re building and what user purchases make sense. One of the most popular ways to monetize free apps is the freemium business model. Freemium is the monetization model that helps app developers upsell the app by introducing different paid features to the users. When you open the app, you can take advantage of several free options.

how do free apps nake money

By now, you must have already had a fair idea that which monetization model is most suitable for you. Still, if you are confused that which model is best suited for you, or if you must go for a hybrid model, then follow these simple tips to clear any remaining doubts. As the name suggests, the publisher of the app appeals to a large crowd of people how do free apps nake money to support their app and make monetary contributions. Against the donations made by interested patrons, the app publisher may give them exclusive rights, premium access, or beta access to new features of the app. Results in wider reach with the free ad-sponsored version of the app and a loyal base of premium users – best of both worlds.


Depending on the type of apps, some strategies are more effective than others. Rewarded video advertising is proven to be the best bet as it’s rated at 75%. It is a form of advertising popular in games where users will need to watch a video ad to receive gameplay items or energies. Many applications operate as marketplaces or aggregators, not selling their own products or services. So how to make money from an app that is free and sells someone else’s products?

how do free apps nake money

Again one of the great monetization strategies for free apps. This type of model is best for those apps that already have a huge user base and provide services to particular market niches. We hope these stats must have helped you to understand the difference between free apps and paid apps. And this also proves that if you develop an app and provide free services to your users, that can get you a better user base and great revenues.

What Makes a Good App? 10 Key Elements to Develop a Successful Ap…

A clear picture of your target users allows you to create an app tailored to their needs. To benefit from the freemium monetization strategy, you need a second, paid version of your application. If users like a free version, they’re likely to opt for a paid one that has some extra functions. In-app ads allow you to make money off free apps, but this monetization strategy works well only for applications with big audiences. If your app is a startup, don’t expect it to bring big bucks this way.

In a market as crowded as that, having a unique app idea that stands out from the rest can be critical to your success. Copying other popular apps or games can negatively affect your app’s performance, regardless of which app monetization strategy you choose. While advertising is the most widely used app monetization strategy, it is only suitable for some. Sometimes, a less popular monetization method or a combination of different models can prove more profitable for your app. It is vital to conduct deep market research or turn to business analysis services provided by MLSDev.

How Do Free Apps Make Money?

At Uptech, we’ve helped various clients monetize their app and build the MVP. Skype offers a subscription for its Skype To Go service and sells credits that allow users to use certain features. VCSO, a tool for photo and video creators, offers a premium subscription along with its free app. The free app market is also split into freemium and free trial apps.

  • Thus, the user can either close the ad or click on it to learn more about the promotion.
  • From the business perspective, subscription-based apps tend to earn higher as well as stable revenue.
  • As of May 2017, there were approximately 138 non-gaming apps that known to raised funds between $10,000-$100,000 as compared to 29 mobile games that got a similar funding goal.
  • Contact us using the comments section below with your queries.
  • CPM – This form of advertising allows the advertiser to earn based on the impressions generated from the video.

Who knows the current app development market and needs of the market. If you also have great ideas for app development and want to earn just through the app. Then you must hire a good app development company and get an app built as per your business or niche requirement and earn amazing revenues in no time. Statista report indicates that more than USD 186 million were spent on mobile ads in the year 2020. You need to find the killer combination of a great app offering a value proposition for its users and a sustainable monetization model for your free mobile app. Like anything free, free apps have always outnumbered the premium apps market by many times over, as far as downloads go.

Once an app proves its value, the users are prone to conducting more in-app transactions, purchases, and to unlock extended functionality. Considering the fact that game apps are one of the most popular app categories these days, some ads systems are keen specifically for them. So, the list of in-app advertising for game applications starts with Unity, as it’s completely focused on games and targets ads only for gamers.

In-App Purchases

If users want to retain access to the content or services, they need to purchase a new subscription. One of the less common strategies, the sponsorship model involves finding a sponsor related to your niche and striking up a compensation structure. In return for the monetary compensation, the app could include the sponsor’s brand, advertise its products, or send users to its website. Use the freemium model if you’re hoping to decrease user acquisition cost, yet confident that the users will stick with the app and make purchases now and then. Most ‘free’ apps downloadable on Appstore and Google Play are based on the freemium model. According to Statista, 96.1% of apps downloadable on Google Play and 91.9% on the Apple App Store are free.

It can be considered similar to the direct sales commission where each sale is tied to one of the multiple marketing channels. Networks like Flurry, the all-powerful Google’s AdMob, Facebook Ads, and AdColony are the top picks. The ads can be placed within your app in many forms – like banners, in-app native ads, video ads, interstitial or full-screen ads, animations, and rich media ads. Most Android and iOS users rely on “free” apps to connect to the world, entertain themselves, play games, and even for making their daily lives more comfortable.

With in-app ads, you advertise your affiliates’ products (apps, games, etc.) inside your app and get paid if your users interact with those ads. Some companies that offer free mobile apps sell their databases to third parties. The information may contain user’s email address, social media accounts, and personal preferences.

Spotify, Netflix, HBO, and Hulu are all services with a subscription. Tinder and Pandora radio use freemium models and offer the ability to unlock premium functionality. To sum it up, developing a free app for your business is a wise action to pursue. The next decision is to choose your free app monetization strategy correctly. Most of the time, you download an app from the store and simply start using it. Naturally, developers who offer apps for free expect pay in some other form.

Sponsorship and influencer marketing

Referral marketing involves promoting a third-party product or service as a way to optimize revenue opportunities. A good example of this how you can make money from apps through sponsorship deals is Home Depot sponsorship on the Weather Channel App. The animated app background behind the temperature measurement is the advertisement placed by the sponsor to target homeowners interested in weatherproofing their houses. Well, both UK agencies and advertisers are now spending the majority of their advertising budgets on mobile. The reason for investing in in-app ads is that the format is more reliable than mobile browser ads.

Apple takes 30% for the first year of any subscription, and then 15% after one year of paid service. Google introduces better terms, taking 15% of subscription revenue even during the first year. None of the above-mentioned monetization options could be described as inefficient. In fact, app publishers have gained skills in using these models in particular cases. To make it easier for you, apply a formula to calculate your app development cost.

About Oleksandr Sokhanych I am Oleksandr Sokhanych & have started many IT businesses since 1997. has +200k monthly readers with mission to provide real-life IT & Software experience worldwide. The other factor to pay attention at is a Platform to use while creating an app.

Referral or Affiliate Marketing

The average revenue per click is around $0.10 for banner ads. The minimum or optimum click-through ratio for an app is around 1.5-2%. This type of revenue model is based on the number of clicks on an ad displayed. You can join popular networks such as Adfonic or Google’s AdMob for this model.

So, consider the app structure and target audience before deciding on a monetization strategy when working with a reputable app development company. You must learn about your target audience to earn online revenue through app monetization strategies. After going over all of these ways to make money from free apps, you’re almost ready to turn your concept into an app. Mobile app development company and app marketing industry for promoting mobile apps.

Physical purchases and Merchandise

If you are looking for a simple digital storefront tool that allows in-app purchases, Swarm is there to help. It unlocks additional features that are not available on initial free downloaded version. While in case you prefer to combine ads and freemium model in your system, try out AdWorkMedia. It implements various app monetization tools at your disposal. Android takes care of their developers and offers its own solution to freemium called Androids In-App Billing tool.

As you know, apps collect a lot of users’ data, in terms of user behavior or other app usage. All these user behavioral data are desired by many researchers in different fields. Now, have a look at these pros and cons and decide for yourself whether to go for this monetization model or not.

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