5 Ways to Monetize Free Apps
The majority of the apps we have on our mobile phone are free. However, most of the companies that make those apps have profits through them. How do they do that? Are there any strategies which you can use in your own mobile app? We will give you some tips on how to do it.
Before starting to make real money, you have to know a few things about your app:
- Who are you dealing with – it’s essential to know your target: age, interests and preferences. Try to get as much information as you can.
- Who is your competition – study your competitors and find out what they’re doing to get clients. What type of strategies they’re using.
After having your head straight, it is time to transform something free into something profitable. We will give you some strategies on how to achieve it.
1. In-app purchases
We all know the feeling of playing a game, getting really close to the next level, but suddenly, out of nowhere, our character on the game dies. A few seconds later, it comes out a pop up window offering you a life if you pay some extra money – to this, we call in-app purchases.
We can divide in-app purchases into 3 categories:
- Consumable: features or products that the user only have access once, such as virtual coins or health points. You can find this type on in-app purchase in games, such as Candy Crush.
- Non-consumable: additional features that you only have access if you paid extra money or upgrade into a premium version, for example, ads blocking.
- Subscriptions: unlock some content or functions for a specific period of time through a subscription. NBA season or Netflix are some of the apps that use this approach.
Another common way to make profit from your app is the use of advertisements. The most formats used are banners, native and interstitial ads:
- Banners normally appear at the top or at the bottom of a screen; they are considered less obtrusive since the users are able to keep using the app.
- Native ads don’t really look like ads. They are closely integrated into the mobile app, making them quite subtel.
- Interstitial ads take a whole screen and typically appear when users launch or close an application, as a form of pop-up.
3. Affiliate Income and Referral Marketing
Based on the number of clicks or installs, companies can promote or sell affiliate’s services or products. This process involves promoting a third-party product or service as a way to improve revenue opportunities.
There are different types of referral marketing publishers. Check them below:
- Cost per click (CPC): you get paid for each click on the ads displayed in your app.
- Cost per view (CPV): the payout you get increases according to the number of the ad views. They are more common on video ads.
- Cost per install (CPI): you get paid whenever a user installs an advertised application.
Freemium apps allow you to test the app before you buy it. Basically, this requires the creation of two apps: the first one, only with the basic features so the user can test it; the second one is the paid version, which the user has full access to the app.
Basically, the user downloads the free app version and if the content is worth paying, gets full access to all functionalities.
Subscriptions are another option in how to monetize your app. In this case, you can choose to offer free content for a limited amount of time and then charge users for a subscription fee. For example, the users are allowed to use the app during a month (free trial period) and afterwards pay for it.
To create a free app and to get profits from it you’ll require some aggressive marketing and creative advertising techniques.
You can find a lot of options on the market that let you test prototypes and explore the results using one or another option – take advantage of that to see what’s the best for your case. Once you have tested your options, you can move forward and build the right app for you.
Curious to learn more about this topic? Check Pokemon Go video below to understand its success. Although the app is free, the company earned 14 million dollars in revenue in less than a week. See how they did that!