Apple Store and Google Play applications can be very profitable for their developers.
Nevertheless, one of the main goals for developers is the payback of their expenditures.
Let’s consider several monetization strategies.
Often “monetization strategy” is understood as “the way to make applications bring money”.
Today it’s hard for some applications to stand out among others and to become noticed by users, not to mention evoking the wish to buy them.
People tend to prefer absolutely free applications or free apps with an advertising banner.
But developers still hesitate whether “to make a free or paid-for app”.
When a developer wants to receive profits from the ad, his primary goal is choosing the right way for monetization.
So, how do free apps make money?
Let me clue you in.
How to make money on applications?
Congratulations, you have created a wonderful application and several thousands of users have downloaded it during the first month.
But where is the money?
Your great idea will not bring you profit by itself, while a monetization strategy most probably will.
If you suppose that you will move to a mansion the very next day after creating a well-thought-out application, then you might not clearly understand the heart of the matter.
So, let’s speak the language of monetization and sort out the details.
The most common mistake in this case is the lack of preliminary calculation.
First of all, EVERY developer must estimate the profitability of all monetization models as well as think over the ways of advancing on AppStore or Android market.
Types of monetization are likely to differ depending on the category your app belongs to.
Geography and age groups – these are also important factors you must consider.
Try to take notice of everything and make a preliminary estimation of the visitors’ number that will use your app; thus, you will be able to calculate your potential profit.
It will provide you with a more objective look at things and allow you to make a number of right decisions.
Don’t make mistakes.
Monetization of mobile applications is not a free lunch.
Read also: Android Apps to Make Money
8 ways to make money with free applications
This is one of the most popular methods among mobile application developers.
In-app advertising works due to its display on the preliminary allotted space of the interface. This provides profit according to a certain number of views and/or redirections.
This method is really effective for games, messengers, news or entertainment applications.
A little disadvantage, however, consists in the following: you must try to create such an application that will be used very frequently.
Embedded purchases and subscriptions.
In-application purchases work owing to the user’s possibility to buy additional functions or bonuses.
This type, however, requires really loyal followers of your product who would like to spend their money on additional functions.
Sponsorship can be effective for both companies and individuals.
Its sense is in releasing an app under a different trademark for the sake of popularity and recognition.
For instance, it can be a logo of a well-known company.
This method is perfect for apps connected to a certain location or event.
But the drawback here consists in a single time profit.
Usually such monetization strategy isn’t suitable for long-lasting and growing earnings.
Nevertheless, it might be the only chance for your first app.
Note: don’t forget that you’ll have to deduct the commission of the app store which distributes your product from any revenue.
Take it into account when estimating preliminary income and expenditure.
Advertising announcements are displayed as notifications in the user’s device tray.
CTR and conversion indexes are very high here as occasional clicks are impossible contrary to inner advertising. Advertisers pay per clicks.
Contrary to traditional mobile advertisements, such announcements aren’t placed within an application.
Every announcement is also marked with a tag and a link for declining the offer.
However, such types of notifications might not work in iOS.
Similarly to applications installed in every new smartphone, icons are a sponsored labels (Icons) placed on the “Home” screen together with an installed app.
Advertisers pay for every installed icon.
Advertising in popup windows.
Due to this method, advertisements are displayed as in-app popup windows softly calling a user to action as well as offering him “OK” and “Cancel” buttons.
For instance, the user can be asked to “Download a new free 3D-game” and be offered relevant buttons. In this case advertisers pay on CPC basis.
These are advertisements for separate ad campaigns placed on the intermediate insertion in the app.
They let users agree upon participation or decline the offer.
In this case advertisers pay on CPC and CPA bases.
Quality videos are shown right in the app.
Usually server shows such announcements only to users of devices with WiFi or 4G connection making sure the user can watch a video from beginning to end without interruption.
In this case, advertisers pay on CPM basis.
- Rich Media: a comprehensive target page embedded in the application with fixed “Cancel” button on top.
- Full-page banners: the announcement is displayed in the inner advertising insertion with a fixed “Close” button on top. Advertisers pay for such service on CPC basis.
Several pieces of advice for making money by creating free apps
No matter which monetization strategy you choose for your mobile app, always remember that it will bring real profit only after thorough selection of potential ways of displaying your ads.
Only this will help you to achieve great results.
Advertising announcements must always be offered as an integral part of the application.
Sticky ads don’t only distort the meaning of your application, but also deprive you of the majority of clicks and redirections.
Remember: advertising must not be problem, but a part of interaction.
On the contrary, ads that merge with the overall picture of the offer attract users to active participation.
Interaction, contrary to interruption, will help developers to generate profits and improve the level of convenience for users.
This is a win-win option for both sides.
The appropriateness of announcements pays a key role in mobile advertising.
Be sure to consider users’ location and the content they use.
It will allow you to increase the number of redirections as well as conversion and your overall profit.
Interesting: How to Make Money on Android?
Key aspects concerning placing ads in free apps
- Texts/banners must be displayed separately.
- Don’t forget to “trim” your ad so that it looks like a part of the app.
- Restrictions of frequency will allow you to make ads sufficiently attractive and reasonably pushy.
- Animated banner is easy to make and effective to use.
- Don’t distract players from the game.Use your ads between game levels or after its ending.
- Banners must be fixed while users scroll the screen up or down.
- Use “Skip” button in your ads – allow your user to think for 5–10 seconds.
So, we have figured out how free apps make money.
Thus, you can boldly get down to developing your applications.
But before moving forward and launching a new app, always study all advertising options.
Now there are a lot of advertisers specializing in mobile apps.
Developers can select profit-making conditions: pay per ad display or pay per click on the banner.
Besides, you must always budget for embedding this banner in your application.