Have you always wondered why are some apps available to you free of cost? If you want to know how apps make money to feed your curiosity or have an alternate reason. Which could be anything from planning the income strategy for your app or start consulting others. It could be any reason, but if your question is to monetize an app without a premium version. You are in the right place, let’s find out how do free apps make money.
The most obvious strategy that many apps employ is to show ads. Apps earn for every impression or click, which can be different for different brands. You have a lot of ways to earn through advertising, which involve affiliate marketing to an ad campaign which you can run on your app. The display options available for ads are:
- Interstitial Ads: The ads pop up on the entire screen at certain intervals or triggers, with a close button on top.
- Banner ads: These ads are not so in the face like the first one. Ads can be at the top or half of the app.
- Rewarded Ads: The ads that pop in when you agree to them. Like the ones that are used in some gaming apps to grant you extra points.
- Native Ads: The ads that you don’t realise are ads because they seem like a part of the content, like in the case of affiliate marketing.
2. Selling Merchandise
Many apps use actual selling to monetize their apps. This is a rather easy process and is extremely popular among apps from all niches. Apps add a storefront to their services and earn by sales of merchandises. The merchandise not only helps these apps earn but also act as a promotional tool for their core service.
3. Paid Features
Many apps provide most of the features for free. These apps have some locked features which can be bought on per feature basis. As compared to subscription which lets you have an access to all paid features, this is rather preferred by customers. The preference is credited to the convenience of paying for only what you buy, like an a-la-carte service.
4. Collecting and Selling data
This is a rather controversial way of earning revenue through the app, Although, many users seem to prefer apps without ads and paid feature. So, this method could indeed come in handy. Data collected through an app can be sold to researchers without violating the privacy of users. Researchers pay highly for data, as in this age information is everything. For this reason, this particular method becomes rather profitable.
This option combines the best of all worlds. You don’t have to sell things, nor display ads and neither share data. All that the app developer has got to do is find the right sponsor. Which is not hard to do, as big brands are constantly looking for opportunities to gain an audience as well goodwill through various sources. Sponsoring apps are the best way for these brands to attract a niche audience. Thus, this method is getting immense popularity among app developers as well as big corporates.
I have always wondered how can an incredible platform like WhatsApp, not run ads or charge subscription. To my amazement, it uses the most unusual approach in the methods in which free apps make money. Facebook-owned WhatsApp uses API to track the replies sent by the business to their customers and charge them on every late reply. Other than API, WhatsApp also uses Whatsapp Payments to generate revenue through Transaction fee method.
In this method of generating revenue through an app, develops rely on donation. Crowdfunding is a great way to monetize an app even before it is available to the general public. An idea or a dummy version for an app can be presented on platforms like Kickstarter. What these platforms do is connect innovators to everyone with a willingness to donate. If an end-user likes and idea he/she won’t mind spending a few amounts as per their convenience, on a service that can benefit them. A lot of successful companies including some apps have to be through a crowdfunding campaign.
8. Transaction Fees
Apps can charge a small amount for transactions that are made on their application. This method is pretty common for apps that provide UPI payment option, wherein a small amount is charged from the bank per transaction. It is rather a convenient way for apps to generate revenue.
So, now that you know hoe free apps make money. What do you plan to with this information? Make an app or spread the knowledge. Maybe you should do both.