Today, generating income from the Internet is possible for anyone, especially for those who are developers or have the necessary knowledge to create applications. But, surely you will wonder how to earn money with a free application.
Monetizing an app and obtaining benefits from it requires a good monetization strategy and a study of the users to whom you intend to direct your app.
Stay and learn the ways to monetize it!
Ways to make money with a free app
There are thousands of free applications of all kinds in the market for both Android (Google Play Store) and iOS (App Store) available for users of these platforms.
However, how can you take advantage of a free application? There are several ways to monetize a free-to-use application, below, we are going to mention the 5 methods to monetize your free app:
1. Use advertising as your main source of income
Advertising in an application is an excellent way to monetize a free-to-use app, being one of the most used ways to earn money with this type of app.
These ads are paid for by companies that hire spaces in external applications or websites to place their advertising on them.
It may not sound like a great way to generate income, but it’s proven to work better than it looks.
We must reach a considerable number of traffic in the app to start seeing profits, as well as an affiliate with a profitable ad network like Google’s Admob or Apple’s iAds.
Let’s take a look at the 3 most popular free apps that use advertising as their main source of revenue:
- Spotify: This application allows all users free access to much of the content of the app without having to pay for it or a subscription, in exchange for displaying ads and placing certain limitations. On the other hand, its paid version allows you to listen to music without limits, removes all ads, allows you to skip songs, and even download music.
- YouTube: This application mainly obtains its income from the advertising displayed in a variety of sections of its platform, being completely free and free to use. It also has a paid version called YouTube Premium, which removes all ads and gives you the option to download videos with access to premium content.
- Instagram: since its creation, this app has been a native advertising platform that can be managed from the application panel or Facebook.
Your advertising can be seen in the user’s feed, in the Stories, and in the search section, the latter one of the most popular formats with the highest profitability and growth.
It is vital to implement banners and advertisements in our app always thinking about the comfort of the user, since an application with invasive and annoying ads will harm the use of the app and, therefore, will not generate good user traffic.
2. Freemium App: paid features
Mobile applications belonging to the freemium category are those that can be downloaded for free, but when installed the user will have access to certain functionalities and to obtain the rest of the app’s content, they will have to purchase it.
On the other hand, a demo version of the application can be offered instead of a free version, converting to the fully paid version.
Currently, the 3 most popular freemium apps are:
- Evernote – This note organizer is focused on personal note-taking. The free version allows you to access a variety of features of the application, grants 60 mb of monthly file uploads, and allows you to link up to 2 devices.
While its paid versions increase storage up to 20 GB/month, let you connect as many devices as you want, and unlock a long list of templates, features, and widgets so you can tackle your project from anywhere.
- Dropbox: This cloud storage application offers a limited account of 2 GB of storage in its free version. On the other hand, its paid accounts increase the available storage up to a maximum of 100 GB, being one of the best most basic, and functional examples of the freemium business model.
- iCloud: Apple’s cloud computing system offers 5 GB of free storage in its freemium accounts that can be increased to 10, 20, or 50 GB by paying 16 euros per 10 GB annually.
3. Establish a form of monetization for in-app purchases
In-app purchases allow users to purchase certain in-app features, add-ons, or services for free through micropayments.
Let’s see an example of the 3 most popular apps with in-app purchases:
- Candy Crush Saga – One of the most popular free games in recent years. Candy Crush consists of eliminating sweets, jellies, or candies to complete levels with a certain number of moves, and sometimes, the user may need a few more moves to finish the level. For this reason, there are micropayments in the application of just $1.20 to obtain 5 additional movements, being a quite reasonable price that anyone who has been trying to complete the same level for days would pay.
- PUBG Mobile – In this battle royale shooter you can purchase additional content such as skins, weapons, upgrades, and bonuses directly from the in-game store. Although it is completely free, users have the option to obtain exclusive content and unique skins through micropayments.
- Clash Royale: Clash Royale has a store within the app to buy chests, cards, and gold through micro-transactions or gems. The game is free and you can progress in it without having to invest money, however, many users decide to take advantage of promotions and discounts to progress quickly.
4. Find a sponsor for your free app
Getting sponsorship is a great alternative to making money with a free app.
However, it is also a somewhat complicated task that requires a good app idea or an already created application that has been on the market for some time with a considerable number of downloads that are attractive to the sponsor.
In this way, attracting the attention of the sponsors will be easy, all that remains is to offer good improvement plans, updates, or an application idea.
The benefit that a sponsor brings with it is that the possibility of having a website, subscribers, traffic, and other elements that make up your marketing system is high, being a crucial issue when promoting an article.
Here are some of the most successful sponsored apps to date:
- Kraft’s iFood Assistant: Since this app was launched in 2008, it is still part of the top 100 apps. Its success was achieved thanks to being a very useful application for Kraft’s target audience, increasing the number of users who interact with the recipe book, use the promotions and take advantage of the discounts distributed through the app.
- Zippo: the sponsored application for Zippo lighters is a clear example of high popularity in a sponsored app since the number of app downloads is increasing every day and there is even a premium version. This app simply simulates the classic metal lighter that never goes out and allows the user to interact with and customize the lighter in various ways.
- Chipotle Ordering: The launch of this app was the best idea Chipotle could have, since with it maximized its best quality, the sale of fast food. This application locates the closest Chipotle location to the user and allows payment without the need to register or wait in line at the establishment.
5. Offer a subscription
Monetizing an app through an annual, quarterly, monthly, or weekly subscription fee to access premium content, additional services, or app enhancements has been gaining popularity in recent years with the release of a variety of apps under this model.
It is currently the most used option to earn money with a free application, since it provides high-quality functions and content at an affordable price, it is quite attractive for a large number of users.
The most popular apps that earn revenue with this model are:
- Amazon Prime Video: one of the most popular streaming services at the moment, thanks to its affordable price and the wide variety of high-quality content, both it’s own and third-party, on its platform, making it a pretty striking subscription application for everything type of user.
- Duolingo: the platform that allowed millions of users to learn different languages for free generates revenue by offering an ad-free premium subscription. Additionally, with this monthly subscription, it makes available to its users a wide variety of extra functionalities that contribute to the learning of the public.
- Netflix: This app obtains 100% of its profits through its three monthly subscription plans to be able to access the wide catalog of self-produced and third-party content.
Which modality to use to earn money with a free app?
If you have not yet defined the commercial strategy that you will use in your app, take into consideration each of the aspects that we will see below:
The objective of the application in the market
Let’s start by determining the uses and functionalities that our app will have, since not all ways to earn money with a free application work perfectly for any type of app.
It is important to ask ourselves: what will the application be used for? In this way, we can establish the problems that we intend to solve with the app and how it will be done.
The appropriate audience for the app
It is of vital importance to adequately define the public towards which our app will be directed, whether it is for a young, children, adult, or mature audience. In this way, we can carry out an optimal study of potential clients that allows us to choose the appropriate monetization strategy.
Knowing the profile of potential customers and relevant information about them such as their age, the time slot in which they will use the application, the needs they have and the rate they would be willing to pay are useful elements for designing an app that truly meets their needs and, in turn, allows us to meet the objectives that we determine.
On the other hand, researching the competition is essential to find out what most attracts the users of said application, what aspects could be improved to provide a better app, and what monetization strategies are the most used and how they have been implemented.
Choose the method to generate income
The indicated model will be determined exclusively by the strategy that you will use to monetize the app, as well as the type of application that you will create. Free game apps usually earn revenue from in-app purchases, while other mobile apps like Netflix or Disney Plus opt for subscriptions.
Be careful not to fill the app with ads or purchases, the ideal is to offer an application with subtle and prudent advertising, which does not become a nuisance for the user. Otherwise, the public will stop using the app and possibly leave a lousy rating in the app store.
Now that you have considered all the previous points, choose the monetization modality that best suits your type of application.
How do I receive the income generated by my free app?
Before we can get the money generated by our mobile application, it will be necessary for us to configure a data set in the developer panel so that the income we get during that month with the free app is paid to us monthly.
However, depending on the app store in which you have decided to launch your app, whether it is Google Play Store or AppStore, you will receive 30% less of the total amount, because these app stores usually take a commission of 30% of the cost that the user pays for the purchase of extra functions, subscriptions and other elements that an app can sell.
Although there are certain exceptions.
An example would be when a user makes an in-app purchase of an item that will be consumed outside the app (fast food, drinks, or orders), and the developer can implement its own payment gateway such as Stripe, PayPal, among others.
