Ever wondered how free apps make money? Well we have answers for all your queries. In this blog we will cover all the ways which free apps make money. Our experts have amalgamated a list of all the possible monetization methods by which free apps can be a great source of income. Furthermore, we have included a detailed comparison between free and paid apps in this blog. We will try our best to answer your questions of How to make money from free apps in 2021?
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According to Google Play, 98% of worldwide app revenue comes from free apps. This itself is enough to anticipate the vastness of this industry. Free apps are extremely popular in the market because of their innumerable advantages. The first being that they are absolutely free for the users. Users can install the app on their mobile phones and use it wherever for FREE!
Furthermore, free apps can play a crucial role in increasing leads and sales for all types of businesses. Today every firm and startup launch its free app before anything else. This is done to attract more potential clients to their business and consequently to earn more money. All these reasons are enough to make you think more about the monetization strategies for your free apps.
Especially after the advent of pandemic, free apps have taken over the world in a whole new way. Be it Education, Healthcare or E-commerce, everything is revolving around free apps to operate their businesses. Check out our list of Top 5 Free Educational Apps to know more.
The concept of paid apps is not very successful in the market. You can eventually lose your customers who are not willing to pay to use your app. Paid apps are generally used by very exclusive software companies that provide their services to professionals. Paid apps typically have way fewer downloads than Free apps. Furthermore, even if someone is willing to pay for your app, it has to be excellent in all its aspects. Since someone is paying to use your app, they expect a high-quality service. Especially when they can easily avail these services for free on other apps.
There are fewer payment options available, like just a monthly or a yearly fee. It makes it harder for the customers to make sure if they want to spend that much money. To sum it all up, if you are a very exclusive brand that provides one of its kind services, then you may make money using paid apps. Otherwise, there is no scope of any revenue that you can generate through paid apps.
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How to make money using free apps? In this segment of our blog let us have a look at 10 best strategies by which free apps make money.
First on our list is Advertising. Advertising is probably the most frequent and easiest way to make money via free apps. According to a survey in 2017 almost 49% of free apps use in-app advertising as their main strategy of monetization for their free apps.
You can either advertise directly on your free app or via third-party ad networks. Through advertising, you can earn a substantial amount of money to keep your app open. The process of monetization apps using advertisements is quite simple and straightforward. The app owner needs to display ads/commercials on his mobile application. Furthermore, the owner can even choose associate marketing to earn via third-party ad networks. This way, you can either get paid for PPC (Pay per click) or every time an ad is displayed(Pay per impression) on your app.
Similarly, you can even run ad campaigns for a limited period of time on your app to get an extra income. Now, there are different types of ads that you can run on your app. Some of these are Interstitial Ads, Banner Ads, In-App Video Ads, etc.
Advertisements are generally a very successful way of earning through free apps. But other than that, they can even help you measure your user interaction and your target audience reach. Additionally, running video ads can help you to generate more significant traffic for your business.
This method of monetization is becoming quite popular these days. A lot of companies like Amazon Prime Video work this way. Easiest way to do so is to offer content on your app for free for a limited period of time and then charge them with a subscription fee after the free trial is over. Further, this monetization strategy is commonly used by audio and video streaming platforms like Spotify. This way, users can choose if they want to continue using the app’s services.
There are a lot of advantages and disadvantages of using this method to monetize your free app. Like you can get a loyal customer base using this strategy, but then you have to constantly work to introduce new features in the app to maintain that customer base. Similarly, Subscriptions can be a source of reliable income but small businesses can hardly afford to offer their services for free for that free trial month. Henceforth, to conclude, Subscriptions can be a stable source of income for big businesses but they are of very little use to small firms.
Gaming apps often use this monetization strategy. In-app purchases are made directly on the free mobile apps. These purchases usually aim at providing access to better functions, tools, and other services. This monetization strategy is prevalent these days and so far has been pretty successful too. Furthermore, it is not a very intrusive method of monetization which again contributes to its success.
However, you must acknowledge the fact that customers are expecting high-quality services from in-app purchases. Failing to provide these advanced services can lead to angry and frustrated customers. Henceforth, make sure that you are implementing In-App purchases correctly in your app. Understand that there is a great opportunity to earn high from this low monetization method, if implemented correctly.
Referral Marketing is not a direct method of monetization. It involves third-party ad networks or services to generate revenue. App publishers can promote ads based on the number of installs or the number of clicks. There are a lot of referral marketing models that are used by app publishers. Some of which are as follows
Referral Marketing is the most reliable and stable source of generating income from your free app. Furthermore, referred customers can even become your long term loyal customers through this method of monetization.
Sponsorships are not a common way of generating revenue from free apps. However, it can still be a pretty intriguing and interesting monetization strategy. App publishers need to collaborate with sponsors who have the same target audience like them. Thorough research about all the brands and organizations that are of the same niche as the app is the first step. After that, you can propose to them to collaborate with you for sponsorships.
This method has its own drawbacks, like you have to be extremely cautious with the people you are collaborating with as it can render your app’s ROI. Similarly, you have to be a brand name in the market to collaborate with other big firms. However, it can become a stable revenue source since this monetization strategy has minimum disruptions to user-experience.
Selling Merchandise is another way of making money through free apps. You can directly sell merchandise such as toys, shirts, caps, etc on your app. You can sell these merchandise directly through your app or via email marketing. Selling Merchandise through your free app will help your business to reach a wider audience. Consequently, generating more revenue for your app.
However, sometimes due to poor inventory visibility the efficiency of this monetizing strategy is adversely affected.
There are a lot of apps that collect our data when we use them. This data is extremely crucial for so many researchers to carry on their study on different subjects. It is where this monetization strategy comes into play. The apps collect users’ behavioral data and sell them to third-party organizations. This kind of data is often very essential to carry on several surveys and researches.
According to a study conducted by Global Privacy Enforcement Network, over 75% of apps want access to user data.
This means that free apps can make a lot of money by selling behavioral data to researchers. Similarly, a lot of times, companies want to showcase their ads to the most relevant audience. You can even sell this data to such companies and can make a lot of money.
However, it is extremely important that you maintain the security of your customers’ data; otherwise, it can cost you financially and legally. Furthermore, this monetization practice can even make your customers question the legitimacy and security of your app. Consequently causing a massive loss of customer base to your business. Henceforth, it is important that you govern the security of your customers’ data very carefully.
A lot of e-commerce websites use this strategy to monetize their free apps. It is one of the most flexible monetization strategies irrespective of any niche. One can sell physical goods like mobile cases, caps, etc., through fully developed free apps. Another advantage of this monetization strategy is that it is extremely safe to use. Additionally, it generates a substantial amount of revenue with the lowest risk possible. However, this is a very volatile method of monetization. It does not ensure a stable income; therefore one has to be very cautious about the user behavior and their demands from your app.
It is one of the smartest ways to monetize your app. We say that because it truly is a blessing in disguise for all the free app owners. If your app deals with transactions all day long, then this strategy may change the things once and for all. You can charge a transaction fee for all the transactions occurring on your app. It is a stable source of revenue for all the free apps that deal with transactions as a part of their work. However the transaction fee is fixed so you must not expect any increment. However, saying that it is also a very stable source of revenue for free apps.
Crowdfunding is a new way of getting funds for your app. Here developers and startups share their app ideas on platforms like Patreon and Crowdsupply to search for funds for their apps. This way you can access a lot of money. However, it is important to be creative and innovative to get funds from others.
Hopefully by now we have answered your question about How to make money from free apps in 2021? But there is another most important question that arises pretty often and that is the development cost of a free app. However, to answer this question, we have to consider a lot of other factors.
These factors include Geographical location, Target Platform(Android or iOS), Integrated Technologies, and Features. Developing an app in the USA or Europe is relatively higher than creating an app anywhere else. Similarly, if your target platform is both Android and Apple, the cost of development would be higher in that case. The more advanced features, the more will be the cost of development.
Apart from UI/UX designing and front and back end development, testing tools also costs a lot. The cost of developing an app also depends on the fact that if it is a Native app or a Hybrid app. Considering all the above-given factors, the cost of developing a robust and scalable App with all the features is around $20k.
But if budget is your constraint, then you need not to worry. With Idea Usher, you can create a stellar Mobile Apps within your budget, without compromising on quality.
We hope you like our blog on How to make Money from Free Apps in 2021? If you are looking to create a scalable Mobile Application then you happen to be at the right place. Idea Usher is a leading software development company that designs web based and mobile based solutions for you.
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To wrap this all up, there are a number of options available to you by which you can earn money using free apps. However, it is crucial that you implement these methods wisely, keeping in mind the target audience and the market of your app. After going through all the other methods we can conclude that Advertising and Referral Marketing is one of the most successful monetization strategies for any free app. Thus ensure that you are integrating it in your app very efficiently.
Similarly, for a gaming application In-App purchases is the best option to monetize the app and earn a substantial amount of money from it. We hope that all your queries and doubts about how to make money from free apps have been clarified from this blog. Want to read more such blogs related to tech and startups? Click HERE!
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