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How Do Free Apps Make Money: 10 Most Popular Revenue Models

  • Thursday, October 14, 2021
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How Do Free Apps Make Money: 10 Most Popular Revenue Models

Remember those advertisements that pop up while you’re viewing videos on YouTube or banners that display when you visit a website? These are instances of how businesses monetize their websites; the same principle applies to paid and free mobile applications. Free apps have a 96 percent market share on Google Play and a 90.3 percent market share on the App Store, generating $71.3 billion in sales. But because those apps are free, how do they make money?

Before developing a free mobile application, you might want to learn more about app monetization tactics because you might want to discuss every aspect of your app project with your mobile application development company before giving a green signal to them. This article will help you in generating revenue from your app and how to pick one that’ll work for you.

 

By Using In-app Purchases

 

In-app purchases, one of the most common ways to generate money on free apps, is the approach of giving an app away for free and then charging money for additional purchases made within the app.

Game apps are an excellent example of this, where a user might wish to buy more coins or power-ups. In this scenario, how much money can you make from an app? However, estimating the quantity of potential revenue is difficult. 

 

Advertising Within the App

 

This is one of the easiest methods to make money using apps. iAds for Apple and Admob for Google applications are the two major ad networks. cost per thousand impressions (CPM) and cost per click (CPC) are the two revenue-generating possibilities here (cost per click). However, be aware that you will only earn a few dollars for every hundred downloads initially.

 

Sponsorship

 

Many businesses try to get a sponsor for their apps. It is an excellent method to make money with apps. If your app caters to the demands of a specific user group, there’s a chance you’ll be able to find sponsors who want to utilize it to spread their message to your target audience.

In this instance, you’ll need to create custom sponsored content for the app and label it as advertising material. However, you might even want to consider getting your app developed from any top mobile application development company to win over the hearts of a specific user group and sponsors.

 

CPI Networks (Cost Per Install) – Pay Per Install

 

You’ve probably seen those pop-up notifications in games and apps that tell you to look at something else. These apps are dynamically served based on the sort of app you’re using, your interests, age, and other factors. CPI (Cost Per Install) firms are similar to CPA (cost per acquisition) in the web marketing world. Enable this method of making money with apps.

 

Subscription-Based Service

 

The subscription model is one of the most common ways to make money with free apps. Users can download apps for free, but after a week or month of trial use, such apps demand regular subscription costs. This free app monetization model works for cloud services, media, and streaming multimedia apps like Spotify, among other things. Owners allow users to download their software for free, but they must pay a quarterly or monthly price if they wish to become subscribers.

 

Fees for Selling

 

This payment mechanism allows app publishers to earn a percentage of every sale made through their app. This paradigm applies to platforms and marketplaces that regularly connect clients with service providers. Travel markets such as Booking.com, for example, charge hotels 10-30% of each hotel visit. App owners can also use a flat fee for each sale.

 

Fees for Transactions

 

You might be overlooking transactions if you’re wondering how app developers get money out of nowhere. You may charge fees for processing payments if your app is a marketplace that allows parties to send and receive payments. Because such fees are often low, the more payments you process, the better.

 

Crowdfunding

 

Crowdfunding is appropriate if your mobile applications intend to provide your audience with truly unique and valuable material that they will be prepared to pay for in the future. You may test how consumers react to your app by putting it on crowdfunding portals.

This app monetization technique will allow you to create a customer community while your mobile application development company builds your mobile app. On the negative side, crowdfunding takes time, and there’s a reasonable risk you won’t be able to raise enough money.

 

Merchandise Sales

 

Another fresh idea for mobile applications is to offer products through your free mobile apps. To sell physical things such as toys, clothing, and shoes, many e-commerce enterprises create free versions. These tangible items can be sold through the app or email marketing.

Amazon has launched a service called Merch by Amazon to encourage app developers to employ this method. Merch by Amazon allows publishers to create artwork, upload it to their platform, and promote their items. It’s a beneficial situation for both app owners and users.

 

Referral Marketing

 

Partnering with firms and promoting them in your app could help you generate some quick cash. You earn money from user interactions with your product referrals or services in this approach. Overall, referral marketing approaches differ depending on how referrals are compensated. The most common models are:

Cost per action (CPA): You earn money by pushing products, displaying adverts, or allowing third-party in-app transactions.

Cost per click: Receive payment each time a user clicks on an app at a cost per click.

Cost per view: Get a user to watch a referral video, and you’ll get compensated.

Cost per install: You earn money each time a user installs a referral app in your app at a cost per install.

 

To Summarise Everything,

 

In-app adverts continue to be the most successful income strategy for mobile apps. Although, in-app purchases and subscription models are also among the highest-earning revenue methods.

Each strategy has advantages and disadvantages, so it’s crucial to understand the product you want to create.

Based on primary market research, it is feasible to develop a well-thought-out business strategy that includes the application’s income sources and the use of many monetization tactics at the same time. Customer happiness and financial profits are closely connected.

If you are considering developing your app and utilizing the above methods, we are here to ease the process for you! 

iWebServices is one of the top app development companies in India! Contact us now for some value addition to your business!

Summary
 How Do Free Apps Make Money: 10 Most Popular Revenue Models
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How Do Free Apps Make Money: 10 Most Popular Revenue Models
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In this article, the most popular app monetization strategies and advertising models are to explain how do free apps make money.
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iWebServices
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Sara Williams

I'm a transformational business and sales leader with close to 12+ years of strategic sales and business development experience. I am a Global Head Sales at iWebServices, I am recognized for being a collaborative hands-on leader who is driven, passionate, energetic, result-oriented, and highly impactful; particularly in high growth and fast-paced environments.

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