How do a Mobile App Developer can make money from a free app?

 As per a report, nearly 97% of apps on Google Play and 94.2% on Apple’s App Store were free to download. The prevalence of free apps over paid apps has been consistent across both platforms for years. On the Amazon App store, free Android apps also made nearly 82%. It’s clear there are better ways to make money from apps than charging for downloads upfront.

Ways to Make Money with Free Mobile Apps

Several types of in-app advertising provide the most popular way to make money from mobile apps worldwide.



1. Banners

Banners/display ads of different sizes are typically displayed at the top or bottom part of the screen. Users can keep using the app even with a banner on the screen, but they are still annoying. Moreover, their relatively low click-through rates are a serious drawback as publishers are paid every time a consumer interacts with an ad.

 

2. Interstitial ads

These full-screen ads containing images, videos, or text are displayed periodically and can be closed by tapping the cross button or opening the promoted page. Interstitial ads often occur at natural transition breaks in messaging, news, and content, or when users open or close the app. In gaming apps, they may appear before or after an expected content or functionality, e.g., changing game levels or between game sessions.

 

3.Native ads

Native ads are so naturally integrated into an app experience that users hardly perceive them as such. Snapchat’s sponsored lenses and branded filters are a great example, but usually, native ads appear in threads as sponsored content or videos. They may target users based on their past actions, interests, locations, and other data, and align with the user’s favorite types of content. Check with Mobile App Development Company in Gurgaon to develop a mobile app.

 

4. Offerwall/incentivized ads

This method implies rewarding users for specific in-app actions, such as ad interactions, filling out a sponsored survey, or content sharing. In exchange, users may receive in-app currency or unlock additional functionalities. The strategy promotes better app engagement and loyalty, and most people interacting with such ads pay attention to the brand behind it. 


5. In-app/in-stream video ads

Short video ads play automatically during natural pauses in the app experience or on-demand. In the latter case, the so-called rewarded video plays in exchange for some in-app perks, such as extra points in a game, bonuses, lives, or additional features. 


6. Push notification ads

If a user subscribes to news or special offers in the app, it will send them notification ads to the smartphone, tablet, or desktop device even when the app is closed. If the user clicks on the ad right in the middle of their home screen, the app redirects them to the advertising offer. 

 

Apple App Store allows an app to send notifications for promotions or direct marketing purposes only if the user explicitly gave their consent and can opt out from receiving such messages in your app. The user typically has to opt out or into in-app push marketing during the installation process. 

How much money do apps make per ad? Actually, more often, it is ‘per mile,’ which is ‘thousand’ in Latin, but there are several payment models used in mobile advertising and affiliate marketing:

 

  • CPM (cost-per-impression or cost-per-mile). The advertiser usually pays for every 1,000th time the affiliate ad is displayed.
  • eCPM (effective cost per thousand impressions). It’s an estimate of the ad revenue the publisher receives from every 1,000 ad impressions.
  • CPC (cost-per-click). The publisher receives the payment based on the number of clicks on an ad displayed, typically on a CPM basis.
  • CPV (cost-per-view). These campaigns are usually applied to video ads. The payment depends on the number of video views or other ad interactions, such as clicks. The more interactions, the more the publisher is paid.
  • CPI (cost-per-install). With this model, the publisher receives payment each time their user installs an advertised product.
  • CPS (cost-per-sale). The publisher that advertises a product receives a fixed commission or percentage of the sale after each completed purchase.

App revenue generated through advertising depends on several factors:

 

  1. the ad pricing model you have selected
  2. the location of the targeted audience since, for example, the cost of an interstitial ad for American users may be several times higher than for users based in other countries
  3. the platform (ads displayed in Android apps tend to be cheaper than in iOS apps)
  4. the product’s popularity, largely dependent on the app’s type and quality and the publisher’s promotion efforts
  5. user engagement level, since users should interact with the app frequently to generate enough impressions and ad clicks
  6. the affiliate network company’s pricing

7. Affiliate income and referral marketing

This model is connected with mobile advertising, and mobile ad networks specialize in finding suitable affiliates for mobile apps. Publishers promote a product or display information about an affiliate company through ads or use ‘in-app stores’ to sell the affiliate’s services and products, mostly apps and games. In return, they receive a revenue split based on a cost-per-action model.


8. Subscriptions

The publisher offers a free version of the app with limited content or features or a free trial period. Consumers who wish to continue enjoying the app or full access can pay a fee and subscribe to a premium account. The desired service or content is available for a limited period according to the chosen subscription plan.

 

Recurring user payments are a reliable revenue stream and increase customer loyalty and engagement. However, services relying on subscriptions need vast audiences willing to pay and must provide excellent services or content to keep them engaged. 


9. Freemium upsell

Games and non-gaming apps often have two versions: light, with limited but sufficient functionality, and full. The free-to-download light version with basic functionalities promotes user acquisition. If users wish to enhance their app experience by blocking ads or unlocking premium features, they have the option to upgrade through a single-time or recurring payment through an app store.


10.Transaction fees

App publishers can make money from building an app connecting businesses with consumers. The owner provides companies and individuals a platform for their commercial or financial activities and charges a small commission.

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