1 September 2022

The mobile app industry is thriving enormously as the smartphone users grow to over 6.3 billion smartphone users across the world.

The number of applications that we currently have on our phones or tablets, ranging from location or address applications to applications on how to lose weight, is enormous.

In modern times, the free apps market has outnumbered the paid ones in terms of profits and download statistics. According to a recent survey, over 5 to 10% of users are willing to pay for an application which has high quality and performance. Thus, the free app segment was responsible for the majority of downloads and profits.

Thus, it becomes pertinent to ask: how do free apps make money?

Let’s discuss a few revenue models that have helped free apps to generate money and increase sales.

 

  1. Advertising: It is the most used and easiest way for the apps to generate revenue. Advertisements are also the safest way to monetize applications.

The third-party ad networks ask the app owner to display commercials. One can also opt for affiliate marketing in order to get paid. The payout rates depend on clicks and impressions.

Let’s look at various kinds of ads:

  • Interstitial ads: It makes use of full-screen pop-ups that are displayed at specific time frames.
  • Banner ads: They are displayed in different sizes and are less obstructive which helps users to freely use the apps.
  • In-app video ads: They pop up automatically on the screen. They are generally used as a reward video in exchange for some in-app rewards.
  • Native ads: They are generally used in affiliate marketing. These ads are integrated to appear as a natural element in the app.

 

  1. Subscriptions: The subscription-based app model works on a simple principle of offering free content for a limited time. It is followed by charging a minimal subscription fee to access the full content.

This revenue model is adopted by applications of cloud services, audio and video streaming, and online news services.

The subscription-based approach brings in a more engaged and serious audience, generating more reliable income. However, to sustain the same, the app owner should bring in new innovative features for the subscribers.

 

  1. In-App Purchases: It is one of the best monetization strategies. The powerful and additional features can be accessed to allow more empowered user interaction. According to Forbes, apps that use this revenue model generate the highest revenue for their publishers.

This strategy is often adopted by game publishers, mostly because of digital money like gems, coins, and gold. It keeps the users hooked on your free mobile apps so that they keep paying.

 

  1. Sponsorship: Here, the app publishers look for potential sponsors who have a similar target audience. The advertising space is offered to the sponsor and the users are exposed to certain offers and discounts. It focuses on minimal disruption to user experience.
  2. Referral Marketing: It involves the promotion of a third-party product or service as a way to optimize revenue opportunities.

There are several marketing models under referral marketing:

  • Cost Per Acquisition or Cost Per Action (CPA): In this referral model, the publisher can promote other apps. It also advertises products with pop-ups to generate revenue.
  • Cost Per Click (CPC): This strategy is based on the number of clicks on an ad displayed.
  • Cost Per View (CPV): It involves charging based on the number of ad interactions or video views.
  • Cost Per Install (CPI): Here, the app publisher gets paid for each installation of the advertised app in your free app.

Stickboy is a leading mobile app development company in Fort Myers and Naples, Florida. Its software solutions have helped many businesses implement this monetization model to generate money.

 

  1. Data-Sharing: The apps generate a lot of data in terms of user behavior, preferences, and personal information. The app publisher may either track what users do or sell data to third parties such as researchers. Else, they can use the raw data to create insightful analysis.

Stickboy has exhibited this strategy through its effective app development in Fort Myers and Naples for a variety of businesses.

 

  1. Transaction Charges: This model acts as income generated in disguise. The apps that provide a platform, where digital transactions occur regularly, can make use of this revenue model.

The publishers can charge a small fee for every single transaction that occurs on their app, generating fair revenue. One of the benefits of this strategy is that no user credibility is harmed and a fixed income is generated.

Before choosing any of the above monetization models, you need to be clear about the type of your app. Also, with the in-depth analysis of your competitors, you can easily find out the apt monetization business model.

Despite the humongous competition in the mobile application development industry, publishers are also trying cutting edge monetization methods. The hybrid monetization models are gaining popularity in the business world.

 

Stickboy: Your Mobile App Development Partner

Stickboy is an experienced and skilled mobile app development company in Fort Myers and Naples. Our superior team takes care of all the application development steps consisting of wire-framing, app design, and programming.

Our team will thoroughly study your business, determine your target audience, and suggest the ideal monetization model. It will also provide you with an estimation of your app development cost. We have helped a variety of businesses through steady and concrete app development.

Our mobile app development services make use of a cross-platform development approach. Our developers will build your mobile application once and it will work on both iOS and Android platforms with minimal fuss.

Get in touch today for seamless app development in Naples and Fort Myers.