How Do Free Mobile Applications Make Money?

Shahid Mansuri
November 29, 2019

Most people search the app store to get mobile apps that cater to their requirements and start using it. Naturally, mobile app developers who have put in a lot of efforts to expect some rewards. And if you into mobile app development for iOS and Android, then you must also think of making that app work for you. Generally, developers opt for premium downloads where they charge money for each download. And most users do not buy an app without experiencing. So, it becomes imperative to understand how to earn money by developing mobile apps and allow users to use it.

Here are some tips to earn money by developing a free mobile app. We have also included a case study at the end of it to demonstrate the same.

First, take a quick look at the trends of free mobile and paid mobile apps. There are a lot of free apps out there and it needs a mobile money solution to strike the right balance.

In-app Actions

Integrating in-app actions to drive revenue is a tried and tested formula amongst the mobile app developers’ fraternity. 

There are two ways to do it;

In-app purchases

In-app Advertisements

You can either go with the one or blend in both the above options.

A. In-app purchases

A great way to offer premium, additional in-app features with purchase post downloading. When users are happy with the app, they’d prefer a comprehensive experience to leverage everything your app offers. Consider how Spotify premium charges extra of off-line playlists and no-advertisements features in premium. Offering such upgrades to users help engaging more users and improve their mobile app user experience. 

Here is how much an average user spends on in-app purchases.

B. In-App Ads

Referral marketing is closely associated with the in-app advertisement that helps to monetize mobile app for Android and iOS. Also, there is affiliate marketing and running sponsored ads on the application to open a revenue stream. Sponsored content placed in the app generates revenue with clicks, installs and views. Such in-app advertisements are based on Cost-per-action (CPA) method or even based on revenue sharing.

Now, since we have talked about referral marketing, here is how you can use it in your app. 

Promoting other mobile apps (non-competitor)

In-app pop-up Advertisements

Advertising the products or services by integrating an in-app-store

You may reach out businesses to assist you with an affiliate network program. They specialize in getting a suitable affiliate marketer for your mobile app. When you want your mobile app to make money, tell your app developers the same. They use different tools and software programs to integrate such a model once you launch the app.

Want to incorporate strategies for mobile money app?

The app is free! Yes, you need to deliver that alright. But what about something so special in that app which is not free? The idea is to create an illusion that users are missing out on premium offering. Also, to make the most out of that app, they need to pay for it. Consider how photo editing apps have some extraordinary filters reserved for premium users.

This is how your mobile app can make money

But if you withhold too many features in the free version, users won’t experience enough to realize that they want to do or see more. So you’ve got to find that middle ground. Subtly tease them with those enhanced features and benefits. If you’re going to use advertisements, make sure that they don’t hinder the user navigation.

For example, a user shouldn’t have to watch a 30-second video every time they open the app. But some popups or banners from time to time may not be unreasonable.

It takes a thorough analysis of your app, your users, and the market to determine which monetization strategy works best.

You’ve got to figure out which ones will result in the highest revenue. There’s no magic bullet when it comes to making money with free apps. But there are more ways you can learn to take advantage of the opportunities as they present themselves

Conclusion: How much money can a mobile app make?

Take a look at how much money does the Startups across the globe make through mobile apps.

If you choose to make money through mobile app and go with advertising as a source of revenue, here is what you need to know:

Revenue per impression and medium:

Banner ad: $0.10

Interstitial ad: $1-3

Video ad: $5-10

recent statistics mention at least top 16% of Android developers and almost 1/4th of the iOS developers make up $5000 on an average every month through the free mobile app. Such is the industry benchmark already meaning that there are only 20% of the mobile apps in the market that makes a profit based because of their premium quality.

About the Author

Shahid Mansuri

Shahid Mansuri Co-founder Peerbits, one of the leading Mobile App Development Company USA, in 2011 which provides Blockchain app development services. His visionary leadership and flamboyant management style have yield fruitful results for the company. He believes in sharing his strong knowledge base with learned concentration on entrepreneurship and business.

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