How Do Apps Make Money? 10 Proven Strategies

In this revenue model, users can unlock some additional features or levels after buying an upgrade. On comparing free apps with paid apps, the numbers we received were ground-shaking. As per Play Store statistics, the number of free apps alone is approximately 2,589,804 as opposed to 1,25,894 paid apps. Whereas, according to the App Store statistics, 90.3% of total apps are free.

do free apps make money

This model is employed extensively in the app market, ranging anywhere from in-game purchases to paid subscription tiers. So when start working with a reliable app development company, you should take the app structure and target audience into consideration before choosing the monetization strategy. So, that you strategize clearly about how to make money developing apps.

Subscription model

In fact, many can’t because leveraging only one method usually won’t generate enough revenue to deliver a solid return. Of course, the in-app purchases model can work just as well for a non-game app. However, in-app purchases are considered “extra content” that won’t compromise the default app experience. Like freemium, offering a free app with extra in-app purchases is an extremely effective way to drive revenue. Over 7 years of work we’ve helped over 150 companies to build successful mobile and web apps. One of the less common strategies, the sponsorship model involves finding a sponsor related to your niche and striking up a compensation structure.

do free apps make money

Subscriptions, which also unlock premium functionality or content for a fee, may be classified as in-app purchases but are a separate monetization method. This method implies rewarding users for specific in-app actions, such as ad interactions, filling out a sponsored survey, or content sharing. In exchange, users may receive in-app currency or unlock additional functionalities.

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Some product owners think that they can get more if they combine a few monetization methods in an app. Just think what a user feels when he opens a nice new photo editor and sees ads and banners. Suddenly a pop-up appears, and the majority of features are paid, not free? Some product owners charge too much (for freemium or in-app-purchases) and some don’t charge anything. The first category risks not get anything because people rarely pay much, even for really cool features.

do free apps make money

Therefore, the subscription dashboard allows for the data analysis in order to define the best-selling products. As mentioned, the subscription model sets up revenue streams from the weekly, monthly, or annual fees for a specific service provided by the free app. This model is mostly used in cloud services, audio and video content providers (Spotify, Google Music), and digital news portals. Consumers receive access to the content according to their chosen subscription plan. Referral marketing is closely connected with the previous model of in-app advertisement to monetize your free apps.

In-app purchase

You have a lot of options, even if you decide to release a free application. There is a number of platforms providing software to install into your app. Both are third-party networks that have software that you install into your app. In any scenario, in order to receive profit from your free app, you need to have a great app concept and implement a high-performing and user-friendly product. Most app advertisements use the CPC model where optimal RPM (revenue per mile) is 1.5%-2%.

  • Messages, video ad, and pop-ups are just an aspect of digital affiliate marketing.
  • You have to invest in customer support, maintenance, and application updates.
  • The next monetization strategy for free apps is collecting and selling data.
  • Here, we will describe the most popular monetization strategies with examples from popular brands’ usage.
  • Users can close this ad by a close button at the upper left or right corner.

With testing and configuration, it may take a day to complete. Users themselves can also be an excellent source of revenue — particularly their data. Based on these statistics you should know the majority of the apps are free on Play Store and App Store. In 2022, the apps on Apple’s App Store genrated $36.3 billion.

How Do Apps Make Money? 10 Proven Strategies
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