How Do Free Apps Make Money In 2022?

Well, yes, it takes 30% of the revenue but manages the transaction instead. Technically, it is the easiest revenue model for app publishers, as it requires the creation of two apps versions – light and full one. 15% of apps are still using paid sister apps, that contain exclusive functionality which can be bought in addition to all functionality and content of its free version.

how does a free app make money

Thus, people can get some items or services for a single use or come to have a permanent access to them. Instead of bothering their heads about the right pricing strategies for their products, most app providers have decided to go free. The recent report proves that the trend is stable since freely distributed applications hold the market share of over 94% by now. According to the global market report, global mobile app revenue will reach $100 billion by 2020 from $75.8 billion .

You will have to partner with quality manufacturers of such merchandise and must ensure your suppliers can deliver reliably to customers who have placed the order on the app. If the popularity of your merchandise is very high you can also enter into distribution and sales agreements with retail chains and start selling them on eCommerce platforms. In-app videos can generate a greater level of traffic to the website or app of the marketed item, compared to social media marketing. Offers an added revenue stream if your app also has in-app purchases or other models integrated. Networks like Flurry, the all-powerful Google’s AdMob, Facebook Ads, and AdColony are the top picks. The ads can be placed within your app in many forms – like banners, in-app native ads, video ads, interstitial or full-screen ads, animations, and rich media ads.

They are usually displayed as an image and aim to push the user to click. However, you should bear in mind that they can be small or big, static or animated. In case you developed an outstanding, unique software solution, you can sell the API or the entire source code.

Let us unsolved this mystery and find the most promising ways in which a great app can make money. In many cases, some apps employ more than one approach to make money. The income from the apps could not how does a free app make money only be your passive income but can become your biggest blockbuster. The decision of choosing strategy solely lies in the user. We at Echo innovate IT can help you with the development of your free apps.

Common App Monetization Mistakes

The developer can provide users with free trial period and charge the subscription fee for an access without restrictions. Many applications operate as marketplaces or aggregators, not selling their own products or services. So how to make money from an app that is free and sells someone else’s products?

Our application developers have prepared an easy app cost calculator so that it becomes easy for you to have a rough estimation of your app development cost. This type of revenue model is based on the number of clicks on an ad displayed. You can join popular networks such as Adfonic or Google’s AdMob for this model. They both provide text and display advertisements which will help you to earn money for the app. Overall, this is an interesting model for converting non-paying app users into paying users without being too intrusive.

  • As you can see, app development is not a simple process, which is why most platforms would like you to pay for them.
  • This way, you can analyze the future traffic for your app to understand if the app can benefit from ads in it.
  • And investors find this metric very important, as having a large user base can be crucial for monetization and higher return on investment.
  • And there are plenty of ways to make money from a free app.
  • If your users are willing to pay for your content, then only IAP, subscription, merchandising, or freemium models will work.
  • Most ad networks support apps on iOS and Android, as well as on some other mobile platforms.
  • Let’s imagine a game where we need a series of lives to be able to play and that, once we finish them, we have to wait a certain time to play again.

People can download MeetMe for free and use it to browse profiles, chat with people, and connect with locals. However, you can also purchase credits to enhance your visibility and gain new ways to interact with people. MeetMe’s purchase model is lucrative because the app can clearly highlight the benefits of in-app currency. Governments and counter-terrorism agencies wanted the companies behind these apps to share the encryption key to gain access to messages sent and received by the terrorists. This led to WhatsApp’s adoption of end-to-end encryption, which prevents anyone, including WhatsApp, except the sender and receiver from gaining access to the data shared on the app. WhatsApp is a mobile app that allows users to message and call each other over the Internet.

Here You May Also Check Out The Complete Guide About How To Make Your App Successful

To find success with crowdfunding, you must have an incentive that will strongly appeal to your target users. You’ll need to offer something like early access, free access, bonus content, or a combination of the above. Without an enticing value proposition to motivate people to contribute, it’s unlikely you’ll get traction.

how does a free app make money

Social networking is the use of internet-based social media programs to make connections with friends, family, colleagues, or customers. Industry insiders have speculated that part of the rationale behind acquiring WhatsApp was for Meta to access user’s behavioral data and personal information. As of March 2022, the app has over 2 billion active users. In 2018, WhatsApp co-founder and Facebook Inc. director Jan Koum announced his departure from Facebook. Media reports indicate that Koum decided to leave after a disagreement with the company over its use of user data and its desire to allow advertisements on WhatsApp.

But as a startup coming with a paid app can be quite risky. You either need to have something irresistible in your app or a very strong marketing. Even if the later works fine things are quite difficult and you have a mile to travel in order to attain success. It can be seen as unattractive to sell the app users’ information. According to Statista, the advertisement revenue had gone to 14% in 2017 from 6% in 2011.

A Complete Guide To Make Money From Mobile Applications

However, not all free apps make money simply because they start monetizing before getting to know their right audience. Also, not all monetization strategies are for you, you test and try and see which one suits your needs. 50% of the leading apps use in-app purchases a stream of earnings and the model is expected to dominate in the next years. It is commonly preferred among game developers, mostly due to digital money, used by users to purchase in-app content or to unlock new levels.

Then design a campaign page where the investors are given a comprehensive description of your app project. The consumers get some perks, like extra points, app currency, etc.) when they watch the video ad till the end. Users can accept the advertising and pay no attention to it. If there’s no activity for a certain period of time, there is no charge.

how does a free app make money

A thing that all of them have in common is that they’re based on knowing their target audience well. Know you potential users’ behaviour, likes and dislikes, problems that need to be solved, and so forth. For example, the Tinder founders used to run around college campuses pitching their idea app.

How Whatsapp Makes Money

This is one of the niches that has given businesses the ability to become globally recognized brands. Advertising is one of the most popular methods of making money with a free app. In-app ads pay out a small amount to the app owner when a user clicks an ad or based on the number of times an ad appears. You can choose from many different types of ads, including video ads, banner ads, and native ads such as sponsored articles. One of the most popular ways to monetize free apps is the freemium business model. Freemium is the monetization model that helps app developers upsell the app by introducing different paid features to the users.

Rich media ads use multiple methods to reach out to users, including audio, video, text, and more. This type of ads show an average CTR of 2.0% which proves its effectiveness. Banner ads usually appear at the top or at the bottom of a screen and have some text and graphics. Banners are considered to be relatively unobtrusive, as users are able to keep using your mobile app even if a banner is active. However, banners have low click-through rates and heavily depend on brand recognition (users are far more likely to click if a banner advertises some well-known brand). Potential users of your app should be able to quickly find it through search in the Google Play Store and the Apple App Store.

how does a free app make money

When you play a game or use apps for other purposes, you can notice the ad banners on the screen. These are not highly irritating for the users and can be easily stood by them. On Pinterest, advertising blends in nicely with the app experience. No consumer pays to use the tool, and businesses pay Pinterest to make their pins reach the right people faster.

Future Revenue Earning Strategies

The best approach is to present ads without obstructing user flow within the app. The most effective model of app advertising is a native one. Native ads is an organic and seamless way to present your app. Whatever app you want to develop, a chosen monetization strategy is a key to your future profit. If you launch a free app and just wait till it becomes popular by itself, it’s a wrong path.


So Slack has decided that tiered pricing will serve the company and its customers best long-term. And early on, the company encouraged these partnerships by reinvesting much of the capital it raised into other startups who offered to create new integrations for the Slack platform. Candy Crush became one of the top-grossing apps by developing a simple product that keeps its audience coming back. In this post, we show you how six different apps have successfully leveraged a free pricing strategy, and how to translate their tactics to your own app. A great example is Home Depot sponsorship on the Weather Channel app.

And if we go on to know the revenue generated by iOS versus revenue generated by Android, Apple’s App Store makes almost double the revenue of the Google Play Store. Despite the fact that most of the app users download apps from google play store, it seems that App Store users are more likely to pay for apps. This app monetization strategy involves selling physical or virtual goods within your app, and then retaining the profits.

Founders use CPI pricing to incentivize visitors to download your app. This model often costs founders more money and lower the quality of the incoming traffic. They can watch an in-app video ad, install an app, engage with app features and so on.

As of May 2017, there were approximately 138 non-gaming apps that known to raised funds between $10,000-$100,000 as compared to 29 mobile games that got a similar funding goal. It is the best way to make money from your apps on the app store. It is especially possible with those apps that provide a platform, where digital transactions occur on a regular basis. App publishers can promote or sell affiliates’ products or services based on the number of clicks or installs. For this, you can use pop-up ads to promote someone else’s app or advertise products.

The in-app purchase method is used to earn directly within the app. There may be some features available to customers only after they are purchased. In games, it can be powerups, lives or certain levels, and in other applications, it can be premium features that the user can buy. According to Forbes, in-app purchases give app makers the highest revenue. App publishers should do market research, define target users, and check other app developers’ success stories.

Are more likely to pay for premium features, digital goods, additional content and so on. This type of in-app purchases is widely used in gaming apps. Yet, a sponsorship model offers major opportunities besides direct advertisements.

This made the app exclusive and more and more people were curious about it. By studying your competitors you can find out what monetization business model is suitable for your app. Chances are that if it worked for them, it will work for you too. Additionally, you might find a loophole that you can use as an advantage. This type of advertisement provides users with a reward for completing specific tasks within the app, like filling out a poll or sharing content. These rewards usually increase user engagement and app loyalty in the long run.