Do you have this question in your mind as well? How do free apps make money? Every individual who has not yet got into the business has this question. Since there are apps, who charge some money to download. But the free apps, how come they earn from it? Its sensible that people will go for a free app more than a paid app, but what is the benefit of having this huge audience. There are benefits which can bring you good revenue.
If you are unaware of the difference between a paid app and a free app, you must follow the differences stated below.
- Free apps are such app that does not charge any money to download. A paid app charges money to get downloaded.
- Free apps are more preferred. Due to the investment factor, paid apps are not preferred until it is of a persons use.
- Free apps are less expensive to make. You can check on mobile app development services; you will find that free apps are not high quality and inexpensive. On the other hand, paid apps are more efficient and work flawlessly. They are of high quality.
- Free apps have several monetizing facilities, but paid apps get limited opportunities for monetization.
- Because of a huge audience capacity, free apps can easily build a brand name, where on the other hand, paid apps don’t get much reach because not everyone would like to pay for the app unless they try it.
In all operating system and their app stores, there are a maximum number of free apps available. The count of a paid app is relatively less. Do you provide app development services? Or do you want to know how app make money? Here is what you need to know.
Over a statistical report that says the count of free apps download is more than paid apps download. Over the years, the graph of people’s interest over free has become more. That is why we can say that the demand for paid apps will go down more and more in the future. So to boost up the mobile app development services, here are some earning opportunities discussed.
How apps make money?
It is not always that free service providers do not earn. If they are not earning through their service, they are earning through another way. The market for free apps is enormous. In the Google play store, among all apps, 96.2% of apps are free to download.
Among them, free apps that make money have a revenue expectation of $581 billion by the end of 2020. Which also makes it count more in 2021. Every year the revenue is growing more and more, making us anxious about how apps make money.
Since we have already mentioned that free apps get many monetizing opportunities, those are the money-making factors for free apps. Here is how free apps can be monetized.
The most popular means of monetizing is in-app advertising. While playing a game or running an app, you might have noticed some advertisements running in between. The free app that makes money monetize their app and put advertisements. Those ads help promote other apps, and they pay some amount to the app developer or owner.
In-app advertisements is commonly applied in the form of native ads. This means it shows up to people who are interested in that topic or a game. Showing native ads can make the viewer purchase the service or the product. This is how the apps run.
Why in-app advertisement is the famous monetizing opportunity?
In-app advertisements help the advertisers to reach the target audience easily. Take any social media app as an example. You see stories of different brands that you are not following. You also see the sponsored posts in the feed. All these ads are related to your recent search. This is how brands can easily reach out to you through advertisements.
You may not like seeing the same advertisement repeatedly, but these advertisements are quite beneficial for the advertisers due to a broad reach. This is why they pay a fair amount to the app owner.
Types of in-app advertisements
Depending upon the app’s pattern and their users’ interest, different types of advertisements are published. Which are-
Banner ads– Banner ads are the static form of advertisements containing some letters or a stable animation. It does not pop up again and again but stays in a fixed position of the screen for the entire time you are using the app.
Banner ads are one of the most ignored apps by users. But it is somewhere beneficial for creating awareness or developing a brand name.
Video ads– When you play a game or binge, watch a series or scroll through social media stories, you get interrupted with video ads. Generally, these advertisements contain the direct link to the brand page. It helps the viewers to get a profound impact on the brand or product. Sometimes the video ads are skippable, and sometimes not.
Though the exciting fact is that video ads always come with a discount or an offer. Even the concept of advertisement is impressive in some cases.
Native ads- Native ads are the one which is related to the content that you are watching, which is why you don’t get annoyed with it mostly, and the ad can reach the target audience.
With time the evolution of native ads has been massive. From the time it was launched to date, there has been a considerable change. The demand for native ads is growing day by day.
Interstitial ad model- These are the most comfortable in-app advertisements—the ads pop up on the screen and can be ignored with a click. Though such ads’ regular interruption is annoying, if the app developer doesn’t allow frequent pop-ups, such ads can show significant results.
Generally, when you click on an app and reach the hoke page, you see a pop-up ad. You can remove the ad and then do your work. On the other hand, when you are exporting the edited video, a static ad shows up for the time being. Such ads are called interstitial ads.
Incentives ad model- Such ads are the one which can bring you some benefit. For example, if you are out of life in a game, you can watch an advertisement to get a life. Those advertisements are standard in similar apps or games.
But the majority of the audience who watch the video get their profit of extra lives or digital currency and then proceed with the game. They don’t download the new game that they see in the advertisement. Still, the number of views is more for such apps, which brings a lot of benefits to the advertiser.
- Affiliate or referral marketing
Affiliate marketing is a method where the app owner can promote a product or other brands’ service through a link.
An influencer promotes a product and shares the affiliate link of the product. Likewise, the app promotes a third-party service or a product. For example, if an app is promoting another app development services, they are doing affiliate marketing. I exchange the app development services provider will give a commission on every product purchase or service taken.
The affiliate marketing payment counts on several factors, which are –
CPA- Which is Cost per action. When the viewer of the advertisement through an app clicks on the app and sign in or purchase products, that is considered an action. For this instance, the app owner gets paid. According to the number of actions, the payment is made.
PPC or CPC– PPC stands for pay per click, and CPC stands for Cost per click. When the viewer clicks on the advertisement even without signing in, they come out. Then the app owner will get paid. Such ads pay for the number of clicks to the ad.
CPV– The term stands for Cost per view. The number of views to the advertisement through the app brings revenue to the app owner. This is how apps make money and give free service to the audience. The pay rate is low for such advertisers, but the apps can make money easily due to the enormous number of audiences.
CPM– The term stands for Cost per mile, which means the payment is based on impressions on the viewer. The number of views of the same viewer’s ad makes an impression, which makes the revenue.
CPI- This is the abbreviation of Cost per Install. When you see ads for other apps within an app, they ask to install the app. If anyone installs the app, then the advertiser pays to the advertising app. Such apps pay a fair amount and make the app a free app that makes money.
- Crowdfunding Model
This is another popular method of monetizing an app. The crowdfunding model also helps to generate good revenue. Mostly the startup companies use such advertisers to earn.
Generally, brands contact the app developer to put their advertisement. But if you are new in the market, it is essential to reach out to toads. Several crowdfunding platforms help to monetize your app and generate revenue.
When you are providing mobile app development services, you can also influence your audience. You know their taste and choices. By putting relatable advertisements that are sponsored, your app can be the free app that makes money.
The most comfortable and common example is sponsored ads on social media. Most of the new companies take this path to promote their services through social media platforms. Generally, social media platforms offer the option to promote products through a target audience. Support you provide app development services you can promote it through the Facebook ads. Many of your target audience will get back to you and ask about your services. And some of them will convert into your customer. Is how Facebook is earning a fair amount by promoting your services.
Not only Facebook but sponsored advertisements are also done by influencers, bloggers, e-commerce apps. Being a favourite app, one promotes third-party apps and earn money.
- Email marketing
The email service providers are also available in apps. This is an old method of advertising, but it is quite profitable and inexpensive. Sending direct emails to the target audience is what the advertisers do. But to send emails, the advertisers will need email, ids and the app owners have vast data of email ids. Those email ids are sold to the email marketing company, and that is how they generate revenue. If you don’t understand any other means of earning money through an app, you must know email marketing is an important method, which is how apps make money.
- Paid Transactions
In such a method of mentioning an app is to become a mediator between the buyer and seller. The most significant examples are e-commerce apps. Amazon is selling products from multiple sellers in exchange for a commission. Makemytrip is selling flight tickets, rents out hotel rooms, and promotes different businesses in exchange for a commission. Such apps take time to grow but generate a fair amount of money. Multiple free apps make money without investing a penny.
- In-app purchases
In-app purchases, one doesn’t need to pay to download the app but to use some features within the app, they need to purchase it or pay for it. For example, if a video editing software provides the tools for free, they might leave a watermark on the edited video. To remove the watermark, the user will have to pay an amount. In another case, the video editing app might have some advanced tools which could be accessed after purchasing.
In the case of gaming apps in-app purchases, it includes more lives to play the games or more gems to boost the features. Sometimes, while playing games, you have to wait for a new life or make an app purchase. The one who cannot wait to play the game anyway purchase the life. This is how apps make money.
When you have already used an app but want to use better tools or advanced tools, you will have to make a purchase. To make your usability a scale-up then you have to pay for it.
For example, you can make a free website through WordPress, Blogger or Wix, but you need to purchase it to get a domain. Likewise, you may have to make purchases to use other app features to make your experience better.
In the case of gaming apps, the better version of the game is sometimes paid for. You need to purchase to play the game. To make such an app, you should look for good app development services.
- Selling data
Whether its a social media app, a gaming app or an online shopping app, everyone asks for log-in data. That generally contains the email ID and mobile number. These are the two digital methods of reaching out to the audience directly. If an app has a good number of audience, they can sell their audience’s data. Selling a mobile number or an email id does not bring any risk to the person. This is why when you get mobile app development services, they also ask whether you want to sell the data or not. If you want to keep your users’ data secure, it will be made clear to the audience.
Selling personal data is not anyway promoted but setting contact details is a standard method through which free apps make money.
- App merchandise
Some of the apps that got a big audience turn up to sell their merchandise through an app. As an example, angry birds, when they got famous, they started selling T-shirts, games, stationaries with their merchandise. Such an app doesn’t ask for money to log in. They earn through the merchandise.
If you want to develop such a mobile app, you want a similar app like an online shopping app while taking the app development services. Selling the merchandise of a famous brand or game helps to make the stock clear quickly. The huge fan base makes the app worth it.
- Physical purchase
Mostly new brands who want to showcase their products use an app. The app is free to download but not the products. To purchase the products, you will have to make a physical purchase. This is how the brand’s products get sold and offer a free app that makes money.
When the brand takes mobile app development services, they invest some amount still they offer the app for free because they can generate revenue with the products. An app makes it easy for the user to find products and buy them. This is why online shopping apps or e-commerce apps are prominent examples of free apps that make money.
Subscriptions are commonly found in online video streaming apps and gaming apps. The app development services provider mostly makes several gaming apps and offers a subscription to play other levels or enjoy better graphics. Sometimes the app is free, but the game has to be purchased after a specific time. There are two types of subscriptions which are –
Auto-renewal- Such Subscriptions will automatically renew the subscription by deducting some amount and keep the services flawless. Netflix is one of them, don’t disturb the subscriber and keep auto-renewing the account. There are other apps like Prime Video, Hotstar, which offers the facility of auto-renewal.
Non-renewal– On the other hand, some apps ask for a further renewal of the subscription. So that the customer gets to know their subscription got over.
If you want to make such an app that offers an auto-renewal of subscription, please communicate with the developer while taking app development services.
- Free trial
Several apps offer a free trial for some days before the customer makes the actual purchases. Sometimes the app owner offers seven days free trial o 30 days free trial. Providing a free trial helps the customer enjoy the services, and then if they find it useful, they can purchase the features. Many users genuinely purchase the app after the free trial, but most users enjoy the free trial and leave. This is another way of free apps that makes money.
The free trial makes the person addicted to use the app and then asks for money to continue their experience. All online trading apps do the same. They give free digital currency and some opportunities to learn to trade. Once the person is trained enough, they ask for money to get the action in real. This is a smart way for free apps that makes money.
How to make a strategy to monetize an app?
When you want your app to be monetized, several sections will help you decide on the monetization option.
Things to keep in mind while monetizing the app
Know your goals– Before monetizing your app, you must know what your business goals is. Where do you want to reach with the app? Knowing your goals will help to find the right monetizing strategy. Once you know your goals, you will find the best strategy for your app, and that is how your app could be one among all free apps that makes money.
Know your target audience- When you are looking for advertisements or monetizing your app, you must know your target audience. Your audience will help you decide on the method of monetization. You can choose multiple monetization methods, but all of them should focus on your target audience. You need to show such advertisements or products which will be liked by your target audience.
When you know your audience, find ways to monetize your app to focus on your target audience. Once you know, that then make it clear to the developers while taking app development services.
Know your competitors- In every business should have your competitors. Knowing your competitors will help you provide better services to your audience. The better service also includes the type of monetization you will adapt. This is why you know your competitors is necessary; follow their monetization strategies and plan better strategies for your audience to beat your competitors. The better is your strategy, the better you become among free apps that make money.
Think of better names for the app- If you already have a business and want to extend it with an app, you will continue with the same name. But if you are starting with an app, then you must think of a catchy name. The name should be easy to pronounce and easy to remember. Even before you take the app development services, you should be ready with the name to not face any delay. You can also ask the developers to suggest some names that go with the vibe while taking the mobile app development services.
Make a description for the app- I thought the developers would add the description while you take the app development services, but you need to make it. Since the app si your brainchild, you will have to describe it. No one can describe the app better.
Make attractive screenshots- While you take the app development services, you can ask the developer to make screenshots of your apps. The screenshot will be required when you will list the app in the app store or Google play store.
How to monetize an app?
Since to get monetization offers from other brands, you will have to become famous. Here are some of the tricks to get monetization mentioned.
Reviews and rating- The higher number of ratings and reviews makes the app visible to others and brands. Don’t forget to ask your developer to add review and rating pop up while taking the app development services.
Offer security- If your user’s data is secured, then they will trust you more. This is why providing security to your users is necessary.
So these are the tried and tested methods of earning through a free app. But it is necessary to mention your requirements while you are taking app development services. Otherwise, you cannot monetize it, and your app cannot become the one among all free apps that makes money.