How to Earn Money by Developing Free Mobile Apps

Introduction

Are you looking for ways to make money from free mobile apps by launching it on Google Play Store and Apple App Store? If yes, this blog is for you.

Mobile apps are a profit-making industry and that’s the reason everyone wants to be a part of it! Also, it is estimated to reach a whopping $407.31 billion by 2026! (Source: Allied Market Research)

According to Statista, approximately 97% of the apps available on the Google Play Store can be downloaded for free. This translates to 9 out of 10 apps being freely accessible. Therefore, the essential inquiry arises: How to make money from free mobile apps?

How much money do free apps make?

The amount of money that free apps can make varies greatly and depends on several factors such as the app’s monetization strategies, popularity, user engagement, and advertising revenue. Some free apps may generate substantial profits through in-app purchases, subscriptions, or advertisements, while others may struggle to generate significant revenue. It’s important to note that not all free apps are profitable, and success in monetizing a free app largely depends on its unique circumstances and the value it provides to users.

What is the most effective approach to select the optimal strategy for monetizing a free app?

Choosing the best free app monetization strategy requires careful consideration of various factors such as:

Understand your target audience

Gain a clear understanding of your app’s target audience, needs, and preferences. This knowledge will help you identify the most effective monetization strategies that align with your users’ behaviors and expectations.

Analyze competitors

Study successful apps in your niche that employ different monetization strategies. Analyze their user reviews, revenue generation models, and user engagement levels. This analysis can provide insights into what works well within your industry and help you make informed decisions.

Business goals

Each mobile app has its own unique business objective, which revolves around addressing a specific user need. These business goals have a direct influence on the chosen monetization model, as users engage with apps in various ways and for different purposes. For example, in-app purchases may not be as effective for a mobile music app compared to a subscription model, whereas an educational app with personalized content may not benefit greatly from a subscription-based approach. Consequently, the optimal profit potential can often be achieved by implementing a combination of in-app purchases and advertisements.

App Monetization Strategies to Look Out for in 2023

The mobile app monetization strategy you opt for in your application plays a significant role in determining its profitability. Thus, it is crucial to have a comprehensive understanding of various effective monetization strategies available for mobile apps. The following are some key strategies discussed in detail:

In-app Advertising

Advertising is commonly regarded as the most prevalent and straightforward monetization method for free apps. In-app advertising serves as a revenue generation method where app developers earn money by allowing advertisers to promote their products or services to app users.

This app monetization strategy can be implemented through different approaches:

Banner Ads

These are small rectangular or square advertisements displayed at the top or bottom of the app interface. They can be static or dynamic and are often used to promote third-party products or services.

Native Ads

Native ads are designed to match the app’s look and feel, seamlessly blending into the app’s content. They mimic the visual and functional elements of the app, providing a non-disruptive ad experience.

Rewarded Videos

This type of ad provides users with a reward, such as in-app currency or additional content, in exchange for watching a video advertisement. Rewarded videos are popular in gaming apps and can enhance user engagement.

In-app Purchases

An alternative strategy for app monetization involves implementing in-app purchases, allowing you to offer various items for sale, such as:

• Consumable items that users can utilize within the app, such as points and rewards.

• Non-consumable items that have permanent usability, such as games, maps, or ad blockers.

In-app purchases boost user engagement rates and keep users captivated by the app. This monetization approach involves integrating native app store payment gateways, as Apple’s App Store and Google Play Store typically charge a 30% fee on each in-app purchase for the first year.

Freemium model

The freemium model, as implied by its name, has gained immense popularity and now dominates the realms of both Google Play and Apple App Store. Rather than demanding upfront payment from users, freemium apps grant access to their fundamental features at no cost. Nevertheless, if users wish to unlock the premium features, a fee is incurred.

Within the freemium model, various monetization strategies can be observed. In the context of mobile games, users are given the option to purchase in-game items through in-app transactions. On the other hand, productivity apps commonly present a premium subscription model that eliminates any feature limitations imposed on the app.

A prime illustration of the Freemium model can be seen in the DSLR camera app for iPhone. The app offers free access to its basic features, while certain filters or advanced functionalities require a premium subscription for utilization.

Subscription model

The subscription model stands as one of the primary methods through which free apps generate income. It operates by charging users a recurring fee either on a monthly or annual basis. By adopting this model, developers secure a consistent stream of revenue for as long as users maintain their subscriptions to the app.

The subscription model is predominantly employed by entertainment, media, news, and service-based apps. Despite its application in these industries, it is not widely favored, with only 5% of successful apps adopting this monetization approach. Some examples of subscription models include MyFitnessPal, Tinder, Twitch, and more.

For VPN, video, or audio streaming services, the subscription model proves to be the most effective means of monetization. To entice user sign-ups, consider providing a money-back guarantee period for new users.

Referral marketing

Referral marketing is a strategic method that leverages the promotion of third-party products or services to maximize revenue potential.

App publishers can capitalize on the chance to promote or sell products or services from affiliates, with the arrangement based on the quantity of clicks or installations. They can utilize pop-up ads to endorse another app or advertise various products.

In their development, publishers employ various types of referral marketing models.

CPC (cost per click)

This revenue model relies on the quantity of clicks an ad receives when displayed. To implement this model, you can join well-known platforms like Google Ads or Facebook Ads, which offer both text and display advertisements, enabling you to earn revenue for your app.

CPA (cost per acquisition or cost per action)

There are several affiliate networks available, allowing you to discover the one that best fits your free mobile app. With this model, you have the option to promote other apps, advertise products using pop-ups, or endorse apps through an in-app store, all of which enable you to earn revenue.

CPI (cost per install)

Cost per install is a recently introduced marketing approach that resembles the web marketing concept of CPA (cost per acquisition). In this model, you receive payment for each installation of the advertised app within your free app.

CPV (cost per view)

In this model, the charging is determined by the number of ad interactions or video views.

Transaction fees

Monetizing mobile apps through transaction fees is the most effective method to generate revenue on the app store, especially for platforms facilitating regular digital transactions. It proves to be the optimal way to earn money from your apps.

Consider this scenario: If your mobile app offers third parties the opportunity to sell their products and facilitates online transactions for these purchases, you can implement transaction fees. By charging a small fee for each transaction that takes place within your app, you can generate substantial revenue. This approach enables your mobile app to earn money without requiring significant upfront investment.

Final thoughts

Free mobile apps hold a larger market share when compared to paid apps. There are numerous mobile app monetization strategies available, each with varying user engagement rates and income potential. We recommend choosing a monetization model based on your app’s niche, purpose, and target audience. However, you can also consider taking expert guidance from mobile app development service providers like Bytes Technolab Inc.

To enhance the profitability of your free app, consider blending various monetization strategies, for instance:

• You can implement ads while also providing users with a paid ad-free version of the app, creating a win-win situation for both you and your users.

• Or you have the option to combine in-app purchases with subscriptions, or advertising with subscriptions.

To put these ideas into action, you may want to explore the option of hiring mobile app developers. So, to hire the best mobile app developers in town, get in touch with us today!