Did you know there are over 2.3 million apps available in the Apple App Store?
You have to pay for some of these apps, but the majority of them are free. How is it, then, that mobile app revenues are expected to hit $188 billion by 2020?
It’s easy enough to understand how you make money from a paid app. But how do free apps make money?
It’s not only possible–it’s easier than you might imagine. In fact, some of the most profitable apps started with the simplest ideas!
In this post, we’ll explain how free apps make money.
1. In-App Purchases
This is one of the most common (and obvious) ways to make money from a free app.
Once users have downloaded your app, they have the option to purchase certain “premium” items. This could include new abilities or levels in a game or individual songs in a music app.
You could offer users the option of a one-time purchase to use once. You could also develop your app so that users can utilize the same purchase over and over again.
2. In-App Advertising
Do you find it annoying when ads pop up while you’re reading an article?
So does everyone–but we’ve all gotten used to it by now. Ads are an easy and potentially lucrative way to monetize your free app.
3. “Freemium” Subscriptions
While your basic app remains free, you could offer users the option of “upgrading” to a subscription service.
The idea is that they’ll receive extra features that aren’t available on the free version of the app. They might use the free version for a while and then decide to upgrade at a later date.
Does this technique work? Absolutely. In fact, freemium apps make up a staggering 98% of Google Play revenue.
This might seem like a less obvious choice for monetizing an app, but the logic is sound.
As an example, Home Depot recently teamed up with The Weather Channel to sponsor each other’s mobile apps. When users check the weather forecast, they also see home improvement ads and DIY guides.
If you dig deep into your niche, you can likely come up with some ideas for companies to partner with. This could give you a nice chunk of change to get your app up and running.
5. Rewarded Surveys
As the name suggests, rewarded surveys are surveys that users get rewarded for completing.
The “reward” could be virtual currency, an unlocked game level, or something else appropriate for your app.
The good news for you is that researchers are willing to pay more for survey exposure than other methods of advertising. If you do it right, this can be a very easy way to make money from a free app.
Now You Know How Free Apps Make Money!
As you can see, there are many ways free apps can generate passive revenue.
All it takes is the right idea!
So, how do free apps make money? And how can you design and develop such an app?
If you’d like to find out, we can help! Contact us to get started today.