Tuesday, April 5, 2022

How A Free Mobile App Can Make Money for Your Business

You must have seen ads that appear while watching YouTube videos and banner ads that keep popping up while browsing sites online? These are the two most common examples of companies monetizing their online websites and mobile applications. The free app market generates $71.3 billion on Google Play Store and App store combines. And these apps are completely free!  

So how do free apps earn money?  

 If you're planning to create a mobile app and wish to understand more about strategies for monetizing free apps, this article is for you.  

Let's begin. 

How can free apps earn money? 7 ways to monetize free apps. 

Based on your industry and the app type, you may apply any monetization method or combine them simultaneously. The list of models for monetization includes: 

  • Affiliate marketing and advertising 
  • Influencer marketing and sponsorship 
  • In-app purchases 
  • Paid Subscriptions  
  • Freemium 
  • Crowdfunding 
  • Revenue from transactions 

Let's examine each of them in greater depth. 

1. Affiliate Marketing and advertising 

Seven of the ten free apps earn money from advertisements and promoting other businesses. If you are interested in using this popular method to monetize your app for free, you can charge other brands for advertisements. Some of the ways to do this are: 

* Cost per mile (CPM) (or cost per click) - You will be paid for every 1000 views of the advertisement 

* Cost-per-click (CPC) - The app pays you when users of your app click on the display advertisements 

* Cost-per-view (CPV) - Advertisers are charged for the number of ads viewed or for the number of interactions 

* Cost-per-install (CPI) - You get paid every time your app users download the app you've promoted 

As you can see, there are many types of in-app methods of displaying ads for users. There are four ways that you could display ads to app users. 

  • Banner ads  
  • Video ads 
  • Local Ads 
  • Interstitial Ads 

2. Influencer marketing and sponsorship 

This kind of app monetization can be compared to advertising. However, the difference is that it has deeper integration with the application.  

Let's see why. 

Beyond advertising, you can include a sponsor's logo and icons on the splash screen, in the footer or even integrate the sponsored content of a special offer directly into your application.  

To make this kind of revenue-generating model more successful, seek out sponsors with the same audience. For instance, if you run a fitness app, it is beneficial to find sponsors like personal trainers, fitness centres or websites focused on healthy eating. 

Influencer Marketing is a different sponsorship method because you are not dealing with a company. Instead, an individual, a person of opinion popular with the target market. This way, an influencer will help advertise your app to followers and draw potential users. It is also possible to ask an influencer to serve as the ambassador of your application. This is a standard strategy for well-known brands. 

3. In-App Purchases 

Utilizing this monetization model allows you to sell various types of merchandise, such as: 

Consumable items users can use within the app, such as health points or digital currency. 

Or items that are not consumable and can be used continuously for a long time, like games, maps, etc. 

In-app purchases boost engagement and keep users attracted to the display. This monetization method includes the integration of native payment gateways for app stores, as app stores are charged an additional 3% for every in-app purchase. 

4. Subscriptions 

You could try earning money with free apps by using paid subscriptions. However, this model is effective for just 5% of apps with the highest user engagement levels, like productivity, educational, music, or streaming video apps. This kind of payment requires the integration of third-party payment gateways, like Stripe and PayPal. Therefore the app stores don't charge commissions. App subscriptions work in the following manner: 

- When downloading a free application, the user is given an initial trial period to test the app, typically for a month. 

- Once the trial period is over, when the user is still with the application, they will have to purchase a subscription. 

5. Freemium 

It is possible to make money with free apps through the freemium model that is identical to subscriptions. The primary difference is that the user can download a free version of the app with minimal features without time limits.  

However, users have to pay monthly or annually to get the most advanced app version with features. The statistics show that just 0.5-2% of users pay for a premium version. In contrast, the free version of your app is likely to get the attention of a wide population and will help your app become viral. 

6. Crowdfunding 

Crowdfunding is especially popular with entrepreneurs and has proved to be a successful method to raise money. If you're looking to get additional funds for app development or marketing, You can use one of the over 400 crowdfunding platforms, where users of any platform can contribute funds. The most well-known crowdfunding platforms that raise money for mobile app development include: 

  • Kickstarter 
  • Indiegogo 
  • CrowdFunder 
  • AppsFunder 

To begin your campaign on crowdfunding, you have to follow the steps below: 

  • Set goals for fundraising that you can use for the campaign. Be aware that your goals must be Specific, Measurable, achievable, pertinent, and time-based. 
  • Write a compelling story to describe to the world the purpose of your app and how you came to build it and the problem it addresses. By doing this, you will demonstrate the potential of your app. 
  • Create a compelling video, as video content is one of the most effective methods of telling stories. 
  • Create a page for your campaign in which you present investors with a comprehensive outline of your plan. 
  • Make use of social media to attract prospective investors to your cause. 

7. Transaction fees

There is the possibility of charging transaction fees to earn money using free apps when your mobile app is a part of the marketplace segment, where customers make money transactions.  

This segment includes not only eCommerce apps but also: 

  • Hotel and flight booking applications 
  • Apps for dog walking 
  • Apps for ordering meals 
  • Apps for taxi booking  
  • Banking apps  

There are other instances where there are sellers and buyers. You will need to add an API from a third-party payment gateway to your application to charge transaction fees. This requires prior experience in coding, and we suggest hiring mobile application developers for the same.

In a nutshell

Free mobile apps hold an increased market share when compared to paid apps. There are various ways to use mobile apps for free marketing, and each one is different in its level of engagement with users and will yield an additional amount of revenue. We suggest selecting the monetization method following your app's niche and its goal, and your intended audience. 

For more information or queries, talk to our mobile app development company. Our team is available to discuss app issues anytime.  

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