Another annoying app ad popped up while watching a really interesting video? Well, that’s how a free app works! A surprising number of free applications influence the app market. To be precise, free apps dominate 92.9% on the App store and 96.7% on Google Play as of March 2021. (Source: statista). Hence, 90% of apps on the app market are free. Even so, if the apps are free, how do they make money and generate real income?
For a great revelation, check out below how free apps make money. This will help you acquire knowledge if you are building an app anytime soon for your business.
How do free apps make money?
A misconception often gulf people that after developing an app they make it a paid one. They do so because they have no idea how to generate back the money they have spent on building the app.
Fortunately, making your app free will tremendously magnetize a good number of audience and users. This in turn generates enough money to recover and earn more for the expense you made. It is easy however, a lot of smart work behind the scenes is required. The tip to begin with creating your app is to choose a specific monetization model or select all at once. To understand more, check below:
Advertising and affiliate marketing
We find almost all free apps creates money by running apps or doing other business promotions. Through Advertising and affiliate marketing, there are interesting ways to generate income. Payment received through:
CPC or Cost-per-click is when a user of the app clicks on display ads.
CPM or Cost-per-mile, or Cost per impression is when the ad has 1000 views.
CPI or Cost-per-install is when users install your app that you are promoting.
CPV or cost per view is when you charge the advertisers for the number of interactions or the number of ad views.
There are ways to run ads for the promotion of your app to users. You can identify them as Display or Banner ads; Video ads; Native ads and Interstitial ads.
In-app purchase invites a vast audience and increases user engagement level. It tends to magnetize users to the screen. Through this monetization model, your app can sell items in varieties such as:
Consumable items – This includes digital currencies or health points.
Non-Consumable items – Includes stagnant items such as maps, new games, or blocking.
For instance, when your app is downloaded, the users accrue a trial period for a month or specific days. After the privilege is given and if the user chooses to continue, they can proceed with monthly or yearly subscriptions. However, there are two types of subscriptions: Auto-renew and non-Renewing subscriptions. In this monetization, apps work 5% to engage users at high rates and require integrating third-party payment gateways. Such examples are video streaming, music, or educational apps.
The Freemium model is similar to that of the subscription model, however, a user can manage the free version of the apps with basic features with no time restrictions. Nevertheless, a user must pay monthly or yearly to acquire advanced feature-rich app versions. In other words, freemium maintains a balance between the basic features and the advanced feature-rich of the same app. This will result in reaching out to a big audience and making your app flourish.
This method works through certain styles although it is quite similar to ads. Precedently, you can target a sponsor similar to your app. Doing so, you can place the sponsor’s icon or logo on the open screen, footer, or integrate sponsored content with deals and offers which work right for your app.
Nowadays, Influencer marketing is a new trend every business is sort of running after. It involves an individual who has a huge fandom, which in turn intrigues them to use your app or business. Through the demo of the influencers, they will invite and attract fans to download your app. These influencers can become an ambassador for your brand or app so that they will keep engaging with their fans and have you, new users, every now and then.
Most Startups follow this monetization model. In fact, it is one of the most effective ways to generate income. However, there is a way to follow procedures to attend to this model. You are required to launch your crowdfunding campaign through these steps below:
Choose or design a goal for your campaign. Follow the SMART way while you set your goal, ie, Specific, Measurable, attainable, relevant, and Time-based.
Create a status for your campaign to inform your audience what your app is all about, what it delivers, and what they will benefit from it. You will show the aptitude of your app or project.
Make sure you design a gripping video as video content convinces the storyline of your idea and application.
Describe a detailed illustration of your project on a nicely designed campaign page.
Social media platforms drive your potential investors for your project. Use them.
There are more than 400 crowdfunding platforms where you can attract additional funding for your app project or marketing requirements. In this way, investors can donate money to your fund. Some common crowdfunding platforms are Kickstarter, Indiegogo, CrowdFunder, and Apps Funder.
Your app can generate income through a transaction revenue model. This model works on a commercial-based app where users transact money. For instance, you might have done a lot of shopping from certain shopping apps. However, this does not only include e-commerce apps but also hotel, flight, or taxi booking apps, food apps, and other servicing apps. This kind of app works where the buyer and seller interact on the platform. As to transact money, a third-party payment gateway integration is required on your app. However, these kinds of apps require strong security to protect your users’ details. In this case, you will require a niched mobile development team to build your app.
Key to Choose an Ideal Free App Monetization Model
Your app absolutely requires the most beneficial and compelling attention for your new users. Hence, considering these measures below will bring the most effective strategy for your mobile app:
Marketing Goals: Solving a user’s problem is the ultimate marketing goal of every mobile app. Consequently, each goal influences the model as users differ their uses of the apps in different ways having their reasons. Each monetization strategy works differently to suit the behavior of the app. Hence, deciding on a good strategy and the right goal can bring a lot of income for you.
Target audience: Comprehending the kind of users for your app will give an obvious picture of the best monetization strategy to apply. These users, also known as the money spending core will legitimately pay for the service through your app. However, achieving this strategy requires you to put yourself in the shoes of your potential users.
Competitors: Examining the way your competitors or other apps like yours will help you to choose a fitting strategy to generate income for your free app.
End of the Line
By now, you should have a complete understanding of running apps, free apps. Each monetization model prompts a different set of deliverance for your app. However, all the strategies may not work entirely okay with your particular app. It is clear each of them has a height of perks and drawbacks which might or may not suit your project. Therefore, it is wise to choose the correct strategy through precise planning and decision making.
We at Liangtuang Technologies significantly deal with developing and pretty much gain exceptional admiration from our clients. This in fact causes us to be the best and diligent mobile app developing company that helps you create your idea into one, solid app. Moreover, we help generate income for your app. Getting our service is easy and slick.