How Does Free App Make Money?

1. Mobile Advertising

Let’s kick off from this model. Mobile Advertising is the first technique that you might have come across while researching ways to make money from your app. Well, This is a technique that anybody can implement in their mobile apps using a third party such as Google Ads.

The concept is displaying Ads of other businesses or commercials. Now you will be having concerns regarding, who’s Ad you will display, or from whom you will get paid and what kind of Ad that you should displays. Here is How.

The first step is integrating your app with mobile advertising companies such as Google Admob or facebook audience network. And yes there are alternatives for these, But Google Admob is mostly used by Android apps (and yes it’s free!).

Once you have integrated you can set priorities about the Ads displayed in your app including category, Ad display area and so on. Even though your app loses a little of its beauty, the performance of the app won’t be affected due to Ads.

2. Freemium Services

This technology is like Wildfire. Entertainment giants including Youtube adapted the freemium models. This model can help you generate revenue from up to 2% of your app users.

What exactly are freemium Services?
Normally freemium apps are free to download and charges are included for some feature up-gradation which is optional. Not all users opt-in for this feature upgradation. Just like enjoying free services there are users who would appreciate enhanced services and it is from these users freemium app gains revenue besides other app monetization techniques. Before implementing premium services, There are certain points that you’ll need to lookup. One is the current service that you offer for free users. This has to be valuable so that you have a consistent user base and the enhanced features should be optional. For example, you can include features such as Ad-free experience, and HD downloads it is a video/audio streaming app.

3. Subscription

Subscriptions are the next popular method that works best for earning money from apps. Apps with subscription plans work as the following. The users can download the free app and enjoy all the services for a certain period of time (mostly 1-3 months). And this is how the users get to learn and experience all the features offered by the app. Then after a time period, the user is either restricted to certain services or the whole service. And the services will be renewed once the user subscribes it by making payments.

The money made from subscription-based apps are more reliable and this model works best that is based on services and contents. Moreover, subscription models are least effective if you are having an eCommerce app or game apps.

4. In-App Purchases

When it comes to in-app purchases, you can see there are 2 types. Namely consumable and Non-consumable. Consumable in-app purchases are normally implemented in gaming apps, where the users spend their money in purchasing gaming currencies or virtual currencies. On the other hand, consumable In-app purchases include purchases related to Google Account or Apple account where the users have to make payment to get access to the full app and its features.

More than 50% of apps use In-app purchases to earn money from apps.

5. Sponsorship

Among the app monetization models, sponsorship is considered the most profitable model. Even though, finding a sponsor for your app is challenging as the investors should find your mobile application interesting.

The sponsorship model works in many ways, once is the revenue is divided among the sponsors and this works well if you have multiple funders. Or you can charge a recurring sponsorship fee.

On the other hand, once you have an impressive number of userbase, you can approach a sponsor and offer deals like promoting their business, by displaying banner, powered by badge or even changing the theme that matches your funder’s business.