mobile apps

How Free Apps Make Money

With more than 4 million apps floating in the app store markets, the competition is just getting tougher with each day. In the first look, this app store market may appear over saturated with all possible categories of apps available. As a matter of fact, most of these apps are available for free.

If you go by the recent statistical figures, you will know that this app market is still growing. The revenues from mobile apps in 2016 are 16% higher than in 2015.

Now this brings me to a very important question, how are mobile apps that are available for free making so much money? Let’s understand in detail how to make such an app for raising money.

Freemium Policy
Freemium mobile policy is a very popular and widely used prevalent form for monetizing your app. Freemium apps are absolutely free for downloading, but once you start using these apps, you will come across some specific features that will only unlock after purchasing. This method of extending an app that is initially free of cost will certainly assist the developers in widening the customer base.

A lot of users may not be very willing to make a payment upfront before downloading the app. This way the users can actually try the app and see if they like it before making a purchase. Adding special features that are chargeable is a good option as once the users get committed to your app; they wouldn’t mind spending a little extra.

In-app purchases can be executed from within the app by observing a simple procedure. They are usually used to ingress special content such as restricted levels, special characters, power-ups, etc.
This is a very compelling strategy that seeks to convert the prevailing non-paying users into paying ones without being obtrusive.

Indubitably sponsorships are a good strategy of app monetization; however, they are not very prevalent. If you wish to pursue this strategy, you will have to look for sponsors who are addressing the same target audience as your app.

It’s best to start with formulating a list of different companies, their brands and other organizations that can essentially benefit from such a partnership.

So, with this approach, your sponsor will advertise your app under the name of their own brand as the target audiences are practically the same.

Being one of the most effective monetization techniques, subscriptions permit the app users to access content on the apps free of cost for a limited time period and later charge them a subscription fee that lets them access the entire content sans any restrictions. The best tactics to make the customers to subscribe to an app is by offering them a free trial period and then charging a particular amount of subscription fee in case they continue using the app.

Email Marketing
Although not very prevalent, yet email marketing is a powerful way of monetizing and publicizing your mobile app. In this strategy, the users are requested to provide their email ids at the time of login and then later they are reached via email notifications. All the user email ids are stored in a database. For example, for users who haven’t operated the mobile app in a while, reaching them through email can be an effective method to retain them.
Affiliate Marketing

The process of affiliate marketing includes endorsing a third party service or product as an effective way to elevate revenue opportunities. In case of mobile apps, this strategy works mostly by promoting other apps in return for a substantial revenue share depending upon the number of installs or clicks.

Selling Merchandise
Selling special branded merchandise is another ingenious method of monetizing your app. Numerous gift items such as toys, T-shirts, discount vouchers, mobile phone covers, etc. may prove to be a fruitful alternative to augment your revenue stream.

These tangible products can simply be sold either from within the app or through email marketing.
This strategy has been recently adopted by Amazon by launching a service known as Merch.

This facility helps the developers in creating engaging artwork, uploading it on their platform and promoting products.

And lastly, we have advertising. One of the most popular and effective monetization technique, advertisements can simply be incorporated into the app source code that seeks to generate high returns. Whether the app developer gets paid per click, per visit or per install, these ads offer a variety of monetization prospects.

By now you must have gathered a lot about the different ways of monetizing your free iPhone or android app, however, it is imperative to understand that every method has some pros and cons.

Putting to test some of these strategies and examining the moves of the competitors is a good preparatory step.

The app fundamentals, its structure and your potential target customers should be taken well into consideration before embarking upon a monetization strategy for your business model.

Sumit Garg

Project Manager @ Octal Info Solution