The tech industry has come a long way in the past couple of decades. Things that were only a figment of imagination in the early 2000s is now a mere part of our lives. The mobile apps are a prime example here. Modern-day smartphones opened floodgates to the Mobile apps development market, which is now a multi-billion dollar industry.
It is no rocket science that application design service providers earn when a user pays to download and use the app. But, that’s where the perplexity rises.
Do those infinite numbers of free applications don’t earn the developer a dime? If so, why would anybody waste time and energy to build an application that doesn’t cover his costs?
The short version of the answer is that application design services providers earn through their apps, even if they’re free to download. As for the longer version, let’s dive right into it.
Laying down the basics
There are multiple ways to earn from an application, apart from charging for a download. In fact, some of the globally leading applications like WhatsApp, Instagram, and Facebook, do not charge for a download, yet making multi-billion dollar revenues.
Here is a list of some of the ways that allow free applications to make money:
- In-app advertising
- Freemium Model
- Sponsorships
- E-commerce solutions
Now let’s dig into each one of them and explain how you can make the most out of your free application.
In Mobile apps Advertising
As much as we hate it, those ads that pop up as soon as we open our favorite application, are the very reason we are able to use that app for free. The concept is fairly simple. Third-party advertisers pay the owner of the application to display their ads.
Now, it isn’t just regular pop-up ads that application accommodate. Advertisers have numerous options on how to showcase their products within your application. One of the most opted-for media is banner-ads.
Those rectangular cuts you see on the bottom of your screen while using an application, those are banner ads.
Next is the integrated advertising. These ads are not directly promoting a brand or product (with a focus on ‘directly’). Instead, they integrate it subtly into the application seeming natural and unbiased content.
People also go for in-app video advertising. This is a very common occurrence in gaming apps. Video ads usually appear before or after you have finished a game. Usually, you are allowed to skip through them after a few seconds.
A large number of application design services companies tend to use in-app advertising as their core monetizing strategy. There are several other ways to advertise within an application, through which, the app-owner gets paid.
Freemium Model
Another very common way free mobile apps earn revenue is through a freemium model. This model allows developers to launch two different versions of the same application.
One is the same, while the other is the paid version of the app. In the freemium model, the user gets to enjoy a limited set of services offered by the app.
To enjoy more premium services, the app requires them to upgrade to the premium model for a certain fee. Such premium services could be additional access, maneuverability within the app, or features like free downloads, etc. This is among the most common ways for free apps to make money.
In-app purchases are another example of the freemium model. Here, users are allowed to use certain services within the application for free, and instead of moving to the premium model by paying a lump-sum, they pay small amounts to unlock small features within the application.
These purchases are extremely common in gaming apps where players can unlock stages, buy equipment, or upgrade a player by paying a minute amount for the particular feature they want.
Sponsorships
When it comes to making money, sponsorships are among the oldest strategies in advertising books. Application design services companies take sponsors on board to fund or advertise the development of their free application.
There are various ways to make money through sponsorships. Some vendors partner with a brand and share the overall revenue, while others just acquire sponsorships to advertise and promote the sponsoring brand.
The benefit goes vice versa in this for both the parties, the sponsor, and the app owner. For the former, it allows a chance to scale the brand and reach a potentially new market in a unique manner.
For the owner of the app, it translates into financial backing. Furthermore, for the app owner, this could also mean reaching a wide audience through the sponsor.
Ecommerce Solutions/Merchandising
An application is a brand in itself. It is an entity that its users are proud to use. These users are often willing to buy any merchandise sold by this app, as a token of their appreciation to the brand. Think of a game that you love playing.
Take PUBG for example. It is an app available online that millions of players around the world associate themselves to. If PUBG offers some merchandise online, those users are quite likely to purchase it. This is another way app owners make revenue while keeping their application free.
However, one thing to note here is that your application needs to be widely known to your audience. Users should feel associated with it enough to spend their buck to purchase merchandise offered by you.
If you plan to launch merchandise for your application, you can turn to Amazon Merch or any other similar platform to sell it.
In a Nutshell
In addition to the revenue-generating strategies for free apps mentioned above, there are several more that application design services companies can target. Some of these include subscription models, email marketing, and referral marketing, etc.
To put it in a nutshell, there are a lot of different ways through which free mobile apps can enjoy a decent stream of revenue. You can opt for one, or multiple streams at once, and enjoy a monetary influx as your app flourishes.
