Free apps have always been more involved in the market than paid ones. So how do these free apps make money? Today we will talk about it and make some statements about it. Let’s all start together.
First, let’s collect their names in 11 titles and move on to the narrative.
- 1- Advertising
- 2- Subscription
- 3- Product sales
- 4- In-app purchases
- 5- Sponsored
- 6- Directed Marketing
- 7- Collecting and selling data
- 8- Freemium Upsell
- 9- Physical Purchases
- 10- Transaction Fees
- 11- Crowdfunding
Now that we’ve learned the main headlines, we can start talking.
It’s not surprising that advertising is the first way that comes to mind when we say making money from free apps. Ads, which are a good source of revenue, allow us to use many apps for free. We encounter different advertising models. Although this is the case with general logic, we want to give full information by entering it into detail.
According to the latest report and study by Statista, here are the details on mobile advertising spending in the year 2019 and expected in 2020.
The year 2019: 190 billion U.S. dollars
Expected in 2020: 280 billion dollars
It’s pretty simple to use ads to make money and make money on apps. It is enough for the app owner to display the ads on their mobile app and receive payment by a third provider. But advertising placement in the app is also important to make money.
What are the advertising options?
Ads save money in 3 ways.
- Every time the ad is displayed.
- When the ad is clicked.
- When the application mentioned in the application ad is loaded.
There are 4 types of ad impressions that we will also talk about when placing ads.
Subscriptions are a very useful strategy for making money. Apps that offer subscriptions usually offer free content first. After that, it asks for a subscription. The second way is that there is always certain free content available. In this way, subscribers can access more content. It is also a method to offer subscribers more tools than free of charge. Subscription is the backbone of free apps for money.
3- Product sales
You can choose to sell products to make money on your free mobile app. Some providers, such as Amazon, use the product selling system. Customers load products and sell them in this marketplace. It’s a very useful strategy. But its requirements are just as difficult. It is an indispensable source of revenue for free apps.
4- In-app purchases
Purchases made within the app are usually simple. In simple words, it serves to sell items that are completely virtual from within the app. The best free games like Clash of Clans, Angry Birds use this method.
In-app purchases provide the best revenue for developers, according to Forbes data.
Sponsorship is less used than other methods. But that doesn’t change that it’s still an interesting strategy.
These apps launched on behalf of another company can generate high revenue through sponsorship. If the audience that sponsors pay attention to IS users of your app, they will contact you. Before creating the app, creating a list of organizations and brands that can benefit from the partnership is a good starting point.
6- Referral Marketing
Includes promotion of a third-party product or service to optimize revenue opportunity. App publishers advertise based on the number of clicks or downloads.
- CPA (Cost per acquisition or cost per action).
- CPC (Cost per click).
- CPV (Cost per view).
- CPI (Cost per install).
7- Collecting and Selling Data
Most apps today record personal activities and behaviors. These apps, which shed data by learning people, carry statistics for most ads. Companies pay great attention to this information when they advertise.
This suggests that the app, which targets free publishers, can make a serious amount of money by recording users ‘ behavior data and selling it to researchers. The data typically includes users ‘ email addresses, social media accounts, and personal preferences.
There are two ways to exploit this data. First, you save and sell your users ‘ data. Second, you generate revenue from conversions by using this data for your own purposes.
8- Freemium Upsell
Applications of this type of application can be downloaded for free, but they include paid or premium features. These paid or premium features are accessible through in-app purchases.
The actual feature promised by the app is free. If you also want to use more advanced tools, you can make purchases and use them. Such applications are conducive to gaining new users. Users who like content can also pay to use premium features.
This strategy is widely applied in education, health, and sports applications and is success-oriented.
9- Physical Purchases
Apps generate revenue models through physical sales of products in their store. Examples include phone cases, T-shirts, toys, and more. Apps like this increase profits from branded products.
The company Rovio, which owns Angry Birds, for example, sells about 1 million branded T-shirts, backpacks, and stickers each month through its free mobile app.
10- Transaction Fees
The best way to monetize your apps is through transaction fees. If you charge a fee per transaction from your application, which has an active Sunday network, you will get a high profit. You can do this either way. The first way is to sell digital features in the content of your own app. The second way is to charge them a transaction fee if you allow third parties to sell products within your application. With the second method, you can get high profits without costing problems such as procurement and shipping.
One method of winning is crowdfunding, which is still new to the industry. In this method, startups and companies share their ideas in search of donations to fund the development and promotion of the app on platforms such as Kickstarter, Patreon, Crowd Supply, Fundable, and Indiegogo. If you are in college and want to make money, you can also check out our article.