How Do Free Apps Make Money?

It’s pointless to introduce just another app to the marketplace. 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. CPV – earning is based on the number of views by app users. And ready to choose one or multiple monetization strategies to make your app profitable. It’s an ad network tool for acquisitions and native adverts. Advertisers get access to rich audiences, effective targeting, and statistics tracking services.

how does apps make money

Evaluate the advantages of your solution, analyze competitor apps, it’ll give you a clear perspective of ​​what price to set. Statistical data mentioned earlier, almost 18% of mobile revenue comes from in-app purchases. But advertising on apps is not at all limited to the banner ads. Finally, we shouldn’t forget about email marketing, which is an indirect way to get profit from your application. In the case of the sponsorship model, you depend on your investors. You either have to constantly pay them money, or you’ll have to share a percentage of the profit. How free apps make money if they’re unique and universal and difficult to develop.

The Most Popular App Monetization Methods

If your plan is to just build one without an app monetization model and just sit back to collect your money, you’ll be in for a rude awakening. You can apply this same business model and pricing strategy to your app.

  • InMobi allows users to leave feedbacks about the ads, and, consequently, increase the value of targeting for the advertisers.
  • In its time, Uber succeeded in white-label monetization, and many companies still successfully use its on-demand model.
  • With over 50 million registered users, Match Group’s Tinder is a great example of an app that is a tidy money earner due to in-app purchases.
  • However, trying out these tactics and analyzing what competitors are doing is a good starting point.

The promoted pins look so similar to the pins that organically appear in search results that they don’t interrupt the user experience. When you think of music streaming services, Pandora is probably not the first one that comes to mind anymore. That said, it’s consistently one of the top grossing apps in both app stores —despite remaining exclusive to users located in the United States. You need to decide what monetization strategy you want to follow, if you want your app to be free or paid, and so forth. Business models are just one aspect of many considerations you’ll need to make, like support for the development and sale of your app idea, customer support, and so forth.

However, one point that you need to know about native ads is that their revenue can be pretty low compared to other methods. And despite the mobile app developers think of native ads as the best strategy, it is the most hated by users. These ads are displayed automatically and generally used as a reward video in exchange of some in-app rewards. For example, by watching the ad video, the app users can get the app currency which can be useful for either unlocking levels in the game or getting additional features. Discover how to monetize your free app in 2020, what the most popular app monetization models and trends are and how to avoid common mistakes.

How To Get More Downloads For Your App With Guerilla Marketing?

Another alternative would be to develop a free app for your regular business and sell any other items with its help. Email marketing, due to its wide usage, has become less effective today.

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The ways in which ads translate to money can be measured in a few different ways. If you’re complementing an existing business with an app, and you have a customer base to market to, then the freemium or subscription model is worth considering. For businesses that are only concerned about generating quick income, the advertising model is the easiest approach. Prior to developing an app, you’ll want to be clear of what you’re trying to achieve in terms of business goals. Is it an attempt to increase brand awareness by getting as many downloads as possible? If so, the paid subscription model may not be the best approach. Skype offers a subscription for its Skype To Go service and sells credits that allow users to use certain features.

How To Choose The Best Free App Monetization Strategy

Before building the app, creating a list of organizations and brands that could benefit from the partnership is a good starting point. Before concluding this business model, let’s have a look at this strategy’s pros and cons. These display ads are displayed in different sizes and at the top or bottom parts of the app screen. They are often small and less obstructive which helps users to freely use the app.

how does apps make money

What’s more, most of the apps are entirely free and therefore in higher demand among users. 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.

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Google introduces better terms, taking 15% of subscription revenue even during the first year. The strategy is also lucrative for developers to generate and expand user audience and promote an app, as most sponsors already have good website traffic and loyal customers. Are the full-screen pop-ups, displayed at specific time frames.The add can be closed by opening the promoted page or by a close button in the ad corner.

The trend of mobile apps will keep on increasing shortly. During this covid pandemic, even the actions that required our physical presence are converted into virtual presence. Artificial intelligence, Virtual reality, cloud storage are making our life much easier and so are the apps based on these features. The gaming apps make billions of revenue through the mobile application and other apps are yet to arrive in their desired revenue benchmark. 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.

Also, with in-app ads, the possibility of reaching your target audience is higher. These ads help measure user interaction, and video ads make higher traffic than social media networking, audio ads, or web browsing. Our advice is to get a team of expert mobile app developers for skills that you may not have yourself. If you need to hire a team of people to help you create your app, do it! Take out a loan if needed to make sure you’re setting yourself up for the best possible outcomes when it comes to your app. The app market has continued to see substantial growth and has no plans on stopping anytime soon.


The data provided here is useful for identifying and listening to consumer voices and easily making them available to the right enterprises. All in all, this model can result in a genuine revenue model. Next, it is time to create a story to inform others about the app, the idea behind its development, and what problem it solves. All the maintenance costs are needed to be bear by you as the app is free of cost.

With an out-of-the-box strategy, we shall help you build a truly innovative product to grow your business. Tuhin Bhatt is a co-founder of Intelivita, a leading Web and Mobile App Development Company.

If users swipe right on too many profiles in a day, they can’t continue searching for 24 hours. With free apps, you may get significantly more downloads, but the users could be less engaged. They could potentially download your app, check it out once and never use it again.

This method is used by Gaana, which is a great example of app monetization. This app by integrating such ad tactic without any advertising fees has managed to enhance its app experience. Mostly, the app owners are paid when the user clicks or hits the ad or when the user installs the application via advertisement, the app owner gets paid. The paid app has fewer downloads, Software testing you will automatically lose potential clients who are not willing to pay. Techcrunch also says that more than 90 percent of apps on the market now are free. And, the revenues generated from apps that charge for download are expected to go down in upcoming years. Try putting yourself in the user’s shoes and ask yourself whether you are ready to pay for this app.

how does apps make money

This does not mean you should just jump into a game category, as there are distinctive apps in each field. For instance, the top earning non-game app, Netflix, generated almost $560m in 2017, which is more than double its income from the previous year. For example, if you have 50,000 banner ads displayed per day, your average number of clicks is 750, while the revenue comes out to $75 (750 x $0.10). In any situation, do not forget to inform, ask permission, and state the purpose of using personal user data. This is a concern especially if your target audience is in Europe, according to the GDPR .

App Purpose

Moreover, you’re sure the idea of the service can be applied in other areas as well. In this case, you should mark the structure of the application as white-label and sell its code to interested parties. When it comes to Freemium, you don’t ask the user for money right away and let him download can free apps make money the application without any payment. Moreover, you offer him quite decent basic functionality. Shareware applications are the most popular these days. Such a mobile service seems to be free, but only in its basic version. To access the most valuable features, users have to fork out.

how does apps make money

Now let’s discuss who to focus on when creating applications. According to recent studies, the most productive users are men and women over 30 . These people are financially solvent and used to taking advantage of applications in their daily life. Can such a digital product be a profitable venture at all? Free mobile services are quite capable of bringing money to their owners, you just need to approach your business properly.