Do free apps make money? Or how can I make money from free apps? Is one question every entrepreneur or organisation who wants to make money from publishing Apps Ask.
Free applications are said to have outnumbered the paid ones regarding publishing and download, but the question remains “do free apps make money!? Or how do I make money from free apps? “ but before we answer this question, you need to know that the app boom has not ended and it would not end even though the percentage of profits by paid apps have dropped from 75% to 37% it is still worth billions of dollars.
According to TechCrunch more than 90% of apps on the market now are free, and the profits generated by paid apps are expected to go down in upcoming years.Going back to our question, do free apps make money? Or how can I make money from free apps?
To find out let’s analyse the top most popular revenue generating methods of free apps.
1. Advertising: it is indeed the most common and easiest way to produce income from your free app. It is done via a third party ad network. Using ads to monetise app and make revenue is quite simple, all you need to do is to display commercials inside the Mobile App and get paid by the third party ad network.
There are mainly four types of advertisement in free apps.
• Interstitial ads: this kind of ad is usually full-screen pop ups that are displayed at specific time frames.
• Banner ads: they are displayed in different sizes and at bottom or top of the app screen. They are usually small and less obstructive.
• In app video ads: these are video ads that are displayed automatically and used as an in app rewards.
• Native ads: they are integrated to appear as a natural element in the app. It is mostly used to promote a product or Mobile App.
2. Subscriptions: app publishers can choose to offer free content in their apps for a limited amount of time, and they charge users for a subscription fee that will allow them access to the full content.
3. Selling merchandise: e-commerce businesses build free apps to sell physical goods such as pieces of jewellery, shirts etc. These products can be sold directly within the app.
4. In app purchases: in app purchases provide an ability to sell a variety of visual items directly from the app. It is usually used to access exclusive contents or features such as restrictive levels or power ups used by gamers. According to Forbes, in app purchases generate the highest revenue for app publishers.
5. Sponsorship: although it is used less, it can still be another interesting strategy to monetize your free app. Sponsorship app is building the right niche app for a targeted audience and launch it on behalf of another company.
6. Referral marketing: it involves promoting a third party product or service as a way of increasing revenue. App publishers can promote or sell affiliates products. You can use pop up ads to promote products or someone else app.
There are different types of referral marketing methods used in free apps;
• Cost per action(CPA): in this method you either promote other apps, advertise products with pop up or promote apps through in app store.
• Cost per click(CPC): this type of methods is based on the number of clicks on displayed ads.
• Cost per view(CPV): it involves charging depending on the number of ad interactions or video views.
• Cost per install: you get paid for each install of the advertised app in your free app. It is said new marketing mechanism or strategy.
7. Collecting and selling data: companies pay for displaying ads to a targeted audience. So providing them with enough relevant data, like email addresses, social media accounts, personal preferences and behaviour of your free app users can help generate revenue.