When creating free applications, not many developers are expecting to make money hand over fist, however absolutely all of them wonder how to make money on free apps. It is obvious, that today it is not enough to launch an app that captures users’ hearts. You also need to know how to make money with apps and understand how the monetizations methods differ from each other. So let’s talk about five ways your free app can bring you money.
How do apps make money?
1. “Freemium” apps to make money
Do free apps make money? You bet! You can make your application free to download, but provide additional features at extra charge. Thus your users may get a sense of what you app can offer them at no cost. If your application is interesting enough, people will be ready to pay for extended version.
2. In-app purchases
Being one of the most popular methods to make money on free apps, in-app purchases is the strategy when you give an app away, and then ask some money for extra purchases made within an app. This may be vividly exemplified by game apps, where a user might want to buy additional coins or power ups. How much money can you make from an app in this case? Unfortunately, it is not easy to predict amounts of possible revenues. The best way to get better understanding is to try it out.
Note that you won’t get all money that your users pay. Currently, AppStore works on a 30/70 split, meaning that Apple gets 30% of total users purchases (and you get 70%).
3. In-app advertising
This is one of the simplest ways of making money with apps. The largest ad networks are iAds for Apple and Admob for Google applications. Basically, there are two revenue-generating options here: CPM (cost per thousand impressions) and CPC (cost per click). However, be ready that firstly you will be able to earn not that much – about a couple of bucks from every 100 downloads.
Top-5 mobile advertising networks
Landing a sponsor is good way of making money with apps. If your app responds to the needs of a niche group of users, there is a chance that you will find partners who would like to sponsor it in order to present their message to your audience. In this case, you will need to prepare specific sponsored content for the application and mark it as an advertising content.
5. CPI (Cost Per Install) networks – pay per install
You might have seen those pop-up messages in games and applications, which prompt you to look at another app or game. These applications are dynamically served depending on the type of application you use, your interests, age, etc. This mechanism of making money with apps is supported by CPI (Cost Per Install) companies, which are equivalents to CPA (cost per acquisition) in the web marketing world.
Top-5 mobile CPI app networks
How much do they pay per install?
For iOS apps, an average cost per install in February 2016 was $1.78. For Android is was $2.51.
You may find an idea of mobile games CPI rate depending on the country and industry here.
How much money can you make from an app?
It all depends on the amount of time and efforts you are investing into it. Making money with apps is not easy when you don’t spend much time on research. You need to research your users, your market and your competitors in order to make sure that your ads won’t become the reason why your users are leaving you.
- Know your users: make a research about demographics and preferences of your users, so that you can offer relevant advertising, basing on their needs and wishes.
- Know your market and you competitors: although it is tough to understand how much money do apps make on your market, you can easily find out which monetization techniques your competitors use. Observe how their users react and advance your own monetization strategies.
Remember that whichever money-making option you choose, you need to understand that only a small ratio of your users will help you get revenues from your application. That’s why you need to build up a large and active user base. For this purpose, it’s also good to be armed with analytical tools that will help you indicate lifetime customer value, free-to-paid conversion rates, etc.
Now that you know how to make money on free apps, try to apply the abovementioned strategies, taking into account your market, users and goals of your business. Whichever strategy you choose, make sure you monitor the data and processes and interpret them right. May good success attend you!
Create your application with us and get a full scale of prime-quality software development and support. Contact us to obtain quotation references.