How Do Free Apps Make Money

Similar to websites, app publishers need to consider sponsors whose target audience is the same as the one being addressed by the app. Before building the app, creating a list of organizations and brands that could benefit from the partnership is a good starting point. Poor m-commerce experience in this mobile app world you need to have a user-freindly smartphone version of your business. Another innovative approach is to sell merchandise in your free mobile apps.

Online users watch them in exchange for points, lives, or virtual goods. Through such an ad model, it is easy to make money, as an advertiser you are able to communicate brand messages effectively. These display ads are displayed in different sizes and at the top or bottom parts of the app screen. They are often small and less obstructive which helps users to freely use the app. We have discussed 11 well-known revenue models that will answer your question.

Thus, to select a suitable way to make money from free apps, take a closer look at competitors and other apps in your niche. There’s a chance that the monetization strategy, used by other apps from your industry, will suit your business as well. If you have calculated your app development cost, here is an insight into the mobile app revenue over the years.

These ads are displayed automatically and generally used as a reward video in exchange of some in-app rewards. For example, by watching the ad video, the app users can get the app currency which can be useful for either unlocking levels in the game or getting additional features. Whenever you mention Google in conjunction with a business, you know you’re in trusted hands.

Another recent statistics researched by our app consultants clearly shows a win-win scope for the free apps. According to Statista, the distribution of free or paid apps in the Apple store and Google Play store as of December 2019 is mentioned as below as per the users. Techcrunch also says that more than 90 percent of apps on the market now are free. And, the revenues generated from apps that charge for download are expected to go down in upcoming years. For iOS apps, an average cost per install in February 2016 was $1.78.

There is a number of platforms providing software to install into your app. The best example of this model is Chartboost and Playhaven. Both are third-party networks that have software that you install into your app. This is the most effective advertising model when we talk about in-app ad integration.

At the same time, only 5-10% of mobile app users are ready to buy a paid app, and around 98% of profit and downloads come from free mobile apps. The vast majority of mobile app users prefer to use free apps, and this number is continually rising. In the first half of 2019, the number of free app downloads in Google Play increased by 16,4% and raised $41,9 billion in revenue. One of the best app monetization strategies is in-app purchases. It is directly made within the free mobile apps and are usually quite a simple process. They’re typically used to access special contents or features such as powerups, restrictive levels, or additional features.

Why Is Google Chrome Using So Much Ram? Here’s How To Fix It

The cost also varies as per your selected types of apps and their technology. Cost per install is a relatively new marketing mechanism and is the mobile equivalent to CPA in the web marketing world. This type of app advertisement is full-screen pop-ups that are displayed at specific time frames. Users can close this ad by a close button at the upper left or right corner.

how apps make money with ads

To successfully earn online revenue through app monetization strategies, you need to study your target audience beforehand. In short, users should know the real value to make purchases. This new format was made to encourage app publishers to sell their apps for a recurring fee instead of a one-time cost. But despite this, only 5% of the most successful apps are using a subscription revenue model or developing subscription-based mobile apps,according to Sweet Pricing.

It considers itself a cutting-edge platform and offers a payout system that gives the developer $50 for every 1,000 app downloads. Most of the advertising networks follow the raid shadow legends advertising budget cost per click model for the app. So whenever a user clicks on an ad, few pennies are added to your pocket. The average revenue per click is around $0.10 for banner ads.

How Much Do Apps Make From Video Ads?

With access to search, mobile, native, local, display, and video ads, you can select a campaign that fits seamlessly with your app experience. offers competitive CPMs, mobile “in-content” units, and fully customizable units to create matching in-app content. Knowing and understanding your target users, especially paying users, known as the money spending core, will give you a clear picture of the best monetization model. To achieve this, create a portrait of your app users, think about the functionality they might need, and try to forecast how much time they would spend in the app. To create online revenue there are other ways than ads, paid installs, in-app purchases.

how apps make money with ads

As you know, apps collect a lot of users’ data, in terms of user behavior or other app usages. All these user behavioral data are desired by many researchers in different fields. They used video as well as interstitial ads in their smartphone game to create natural breaks in between game sessions. Referral marketing involves promoting a third-party product or service as a way to optimize revenue opportunities. A good example of this how you can make money from apps through sponsorship deals is Home Depot sponsorship on the Weather Channel App. The animated app background behind the temperature measurement is the advertisement placed by the sponsor to target homeowners interested in weatherproofing their houses.

Despite the uproar, Facebook isn’t purposely giving other companies your data—it wants to keep it for itself. However, Facebook monitors your usage, such as the pages you like, and uses this to put you in a category so that advertisers can pay to target that group. However, what many of them do sell is aggregated and anonymized usage patterns. For example, Twitter sells advanced access to its API, which companies can use to view all historical tweets and filter, sample, and batch them. Now you know a little of the basics of in-app advertising and what kind of advertising you want to serve, you need the help of an advertising network.

How Much Do 30 Second Ads Make?

This ad category also includes rewarded video ads when the app user is rewarded for watching a full ad video. None of the above-mentioned monetization options could be described as inefficient. In fact, app publishers have gained skills in using these models in particular cases. We have curated some pros and cons on transaction fees which will give you a clear idea about it’s loopholes. Mostly, the app owners are paid when the user clicks or hits the ad or when the user installs the application via advertisement, the app owner gets paid.

  • In this case, you will need to prepare specific sponsored content for the application and mark it as an advertising content.
  • Now, have a look at these pros and cons and decide for yourself whether to go for this monetization model or not.
  • In fact, half of the games provide more than one game currency such as gems, coins, and gold.
  • As you can see from the above-mentioned statistics of the respective app stores, the growth of the mobile app market isn’t stopping anytime soon.
  • After going through all these how do you make money from free apps, you are nearly ready to develop your idea in an app.

Knowing your app category and what problems it will help users solve is essential to choosing the right free app monetization model. You can make your application free to download, but provide additional features at extra charge. Thus your users may get a sense of what you app can offer them at no cost. If your application is interesting enough, people will be ready to pay for extended version. This type of app monetization is similar to ads, but the difference is deeper integration to the app. Apart from just running ads, you can place a sponsor’s logo or icon on the splash screen, footer, or integrate sponsored content with special offers right to your app.

Your Users Needs, And Demographics

Free mobile apps have a more significant market share compared with paid apps. There are many strategies for free mobile app monetization, and each of them has a different user engagement rate and will generate a different amount of income. We recommend selecting the monetization model on the basis of your app niche, its purpose, and your target audience. According to a mobile application development business, in freemium upsell, customers can download apps for free but must pay for additional or premium services. In-app purchases, which have been integrated, can be utilized to access such features and other android app development services.

A rewarded video ad is expected to generate an average revenue of $0 per impression in the United States. There have been no sales in the last five completions. Interactivity fees are $9 for interstitials and $2 for non-incicrocomics. In many cases, you’re making them money by watching ads and filling out surveys between games. Your earnings will likely be a few cents a day, and payouts are generally made once you earn a minimum amount, like $5. Take a look at the difference between the iOS and Android purchases.

Collecting And Selling Data

This method is used by Gaana, which is a great example of money making apps. This app by integrating such ad tactic without any advertising fees has managed to enhance its app experience. Free appsPaid AppsThese apps obviously attract more targeted users and increase visibility and downloads. The biggest way that social networks make money is through advertising. There’s a reason why the sites are designed to be addicting.

The larger their share in the business, the more influence they have over its decisions. The hope for the investors is that they make their money back and more when the business is larger and becomes profitable. Because there’s so many different variables, the price for a mobile app could range anywhere from $5,000 to $500,000. However, the price range will typically be somewhere between $100,000 and $300,000, with the entire development process taking weeks. Recent mobile blockbusters like Draw Something and, to a lesser extent, Hero Academy monetize themselves through ads. Gaming apps also make around $22,250, while entertainment apps make $3,090 daily, so there is no way to firmly say how much an average app makes.

The mobile market has grown substantially over the years and industry experts predict continued growth. When the trial period ends, if the user continues using the app, they must buy a subscription. After downloading a free app, the user receives a trial period, usually a month, to try your app. We have discussed about how to make money with apps, below you will know the cost to develop an app.

Subscription Model

You have to keep your users engaged and make improvements to the app. For example, the subscription model works only for a certain niche but is the most profitable of all if deployed correctly. Taking this cost into consideration let’s apply the formula, the result will be. Cost per install is exactly what it sounds like – you get paid for each install of the advertised app in your free app.

While the application is free to download and use, app publishers earn money based on the interactions on the advertisements displayed within the application. This app revenue model is highly considered and found to be profitable. The amount of money apps make per ad depend on both the genre of the app and the ad unit. For rewarded video ads, the average revenue per impression in the US is $0.02. The average revenue per completion is $0.16 for interstitials and $2.50 for offerwall. Being more popular among users than paid apps, free apps have the potential to generate a significant profit.

Using a subscription strategy is considered the finest and useful app monetization strategy. If you are wondering how to monetize an app without ads, then consider choosing a subscription method. Surely, this model is only applicable to apps with attractive and distinct brand personalities.

According to Forbes, apps with in-app purchases generate the highest revenue for their publishers. This monetization strategy is also expected to dominate in the years to come. Now, have a look at these pros and cons that will help you in deciding whether to select this monetization model to get your free application idea. While only recently, app owners mostly used in-app advertising for generating profits, the subscription and freemium models are confidently assuming leadership positions.

Tips For Choosing The Best App Monetization Methods

As you can see from the above-mentioned statistics of the respective app stores, the growth of the mobile app market isn’t stopping anytime soon. Despite increasing competition in the industry, publishers are also applying new monetization methods and creating more useful free apps for users. From a marketing point of view, companies want to pay for displaying ads to the most relevant audience. So if you can gather enough relevant data, then you can have a way to make a profit out of it. If you have a question about how to make money creating apps for Android, please feel free to look at the below image to get the information about monetization strategy. Or maybe an education app helping users reach their learning objectives?

Leave a Comment

Scroll to Top