Do free apps make money? Here are 5 proven ways to monetize your apps

Do free apps make money? Here are 5 proven ways to monetize your apps

Monetization

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Table of Contents:

  • Why should app developers monetize their free apps?
  • 5 Most Popular App Monetization Strategies for Free Apps
  • Monetizing your free app - a good idea or not?

If you have gone through your Play Store application, you will see that you can download some apps for free. But, the question that may pop into your mind is - how do these free apps make money?

According to a study by Statista, in 2022, 97% of Android apps on the Google Store are free, compared to paid ones. This data shows that most apps available on the Play Store or the App Store are free. Rather people are more interested in downloading free apps rather than paid ones. But then, how do app publishers earn money? Let’s examine how app monetization helps free apps make money.

Why should app developers monetize their free apps?


The concept behind free apps is that users download the app for free and benefit from its multiple features. But, to make money, app publishers need to monetize your app by introducing extra in-app paid features. You can also run in-app advertisements or have a subscription-based app monetization plan.

In some cases, you will notice a few benefits and downsides. Let’s consider both to understand why it is important to develop a free app and pick the right app monetization strategy:

The user base is larger: 

When a user sees that an app has a free download, the chances of it being downloaded increase. This is an effective solution to increase app installs because the user thinks that everything in that app will be free.

Users download more: 

Users are willing to download a free app more than a paid one. When you have an app that is free, people will be more willing to try it out, rather than pay for one and then not like it. It is this initial hesitation that free apps remove. In the case of a paid app, until a person knows what the app does, and is completely certain about its utility, they will not download it. But for free apps, they will download it readily and then check the utility of the app.

Understand target audience and market: 

Higher downloads are not guaranteed to increase your revenue, as you need to understand your target audience and market clearly. For example, audiobook apps have different users as compared to mobile games. So, the user’s solvency differs, and your business to monetize your app should be different.

But, keep in mind, when developing an app, your goal should not be to have higher download rates but also that your app should be profitable. If there are no proper users, then monetizing your app is questionable. So, to make money with your free app, developers need to create user-based strategies based on their app categories.

5 Most Popular App Monetization Strategies for Free Apps  


Let’s look at some free app monetization strategies:

Advertising:

Ads are probably some of the most common and easiest options to implement regarding mobile monetization for free apps. According to a study by Statista, mobile ad spending in 2022 is $336 billion, whereas in 2024 is expected to be $412 billion.  

When it comes to monetizing a mobile app, how do you do it?

The first thought in monetizing your app and making money is that there should be no guilt involved. As app owners, you need to display commercials on their mobile or opt for affiliate marketing to get paid from top mobile ad networks. Additionally, ads are also considered to be the best way to earn money from apps.

As app owners, you need to showcase your ads within the mobile application so that third-party networks can pay you. They are mostly paid when a user clicks on the ad or installs the application from an ad.

App Subscriptions: 

The app subscription strategy is one of the most useful app monetization strategies you can use. App publishers can keep some of its content or features in their free plan for a limited period and then charge users a subscription fee to gain complete access without any limitations.

The most popular method of app subscription is using a free trial period option and then charging a subscription fee to those who want to continue viewing or using your app. This strategy works for online news services, cloud services, audio and video streaming, bookstores, etc.

In-App Purchases: 

Another great app monetization strategy for free apps to make money by using in-app purchases. In fact, according to Forbes, apps that have in-app purchases generate the highest revenue for publishers. These apps that have in-app are made directly within the free mobile app; the process is relatively simple—adding features like power-ups, special content, restricted levels or any additional features. These in-app purchases are then distributed to allow users more advanced interactions.

In simple terms, the in-app purchase model allows selling multiple virtual items directly on the app. Do you know that the app monetization strategy expects domination in years to come? Generally, game publishers use this model to derive digital currency. In addition, these in-app purchases also play a major role in app downloading.

Referral Marketing:

Referral marketing is involved in promoting third-party products or services by way of optimizing revenue options. App publishers can use referral marketing app monetization strategies to promote or sell affiliate products based on installs or the number of clicks. Moreover, you can also use pop-up ads to promote advertising products.

The different types of referral marketing models that publishers use are:

Cost per Action (CPA): 

Several affiliate networks can find options that suit your mobile apps. From this model, promoting other applications, advertising products with pop-ups, or promoting applications through an in-app store to earn money.

Cost per Click (CPC): 

The revenue models are based on the total number of clicks via ad displayed. Here you can join popular networks such as Google’s AdMob for this model. These provide text and display ads that help app publishers to earn money.

Cost Per View (CPV):

The model involves charging based on the total number of ad interactions or video views. For example, BrightHouse increased its app earnings by 130% via cost-per-view networking. They used videos and interstitial ads in their smartphone gaming to create natural breaks in the gaming session.

Cost per Installing (CPI): 

Cost per Installation or CPI is a new marketing mechanism and is the mobile equivalent to CPA or Cost Per Acquisition in the digital marketing world. CPI means paying for each advertised app installation in your free app.

The fee for this model ranges from $0.80-$3.00, with online affiliate networks having a wide range of global traffic generation campaigns that promote other apps.

Freemium Upselling:  

When talking about freemium upselling, these apps are available free of cost to download but contain premium features. These elements are accessed through in-app purchases.

In the Freemium model app, publishers offer basic or limited features to users to experience the app. But to ‘unlock’ advanced features,, they need to upgrade their plan or buy one entirely.

These types of freemium model apps allow users to download the app without any charges, and when they like the content, they can get complete access by purchasing the app. Using these tactics and gaining new users is possible, as premium features are optional. According to the mobile app development business in freemium upselling, customers download the app for free and must pay for premium services.

Also, customizing iOS and Android app creation services offers various possibilities for creating free apps, and business owners are using opportunities to attract customers.  

Monetizing your free app - a good idea or not?  


When you know the highly competitive market, app publishers can use new app monetization methods to create more useful free apps for users. But, it would be foolhardy to use only a single app monetization strategy. You could use one or two together to create a comprehensive plan to bring your app to the limelight of your target audience. However, this process takes a long time. So, why not sell your app on KalaGato?

We provide quick and easy app selling within 30 days. Our experts respond in 72 hours, and within 2 weeks, you can receive an offer. Our automated tool for app valuation and transparent buyer-seller relationships completes the entire process within 30 days. So, start looking at selling your app on KalaGato!  
 

FAQs

1. Can a free app make money without any ads? 

To create online revenue without using ads, apps can use app monetization strategies such as: 

  • Freemium app
  • Subscription-based plans 
  • Referral programs
  • Social media integrations

2. How much do apps make per download/installation? 

Apps do not make much money from Google or Apple App Stores downloads. Amazon underground is the only platform where app publishers get paid users. You can monetize your app via 3 methods: 

  • In-app purchases
  • Advertisements 
  • Outright Sales

3. How much money can a free app make from ads?

Most app developers use the top mobile ad networks model of CPC or Cost Per Click for their apps. So, whenever a user clicks an ad, they make some money. The average revenue for each click is $0.10 for banner ads, while the Optimum Click Through Ratio (CTR) for the app is around 1.5%-2%.

4. What types of apps make the most money? 

The following types of apps make the most money: 

  • Social Apps
  • Gaming
  • Health & Fitness 
  • Entertainment 
  • Dating Apps

5. What types of apps are in demand? 

Specific apps are currently on demand: 

  • Uber-like traveling apps 
  • Fashion apps 
  • Mechanics apps 
  • Beauty service apps
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