How Mobile Developers Make Money from Free Apps
We are often irritated by in-app advertisements while we play games or listen to music. However, if the application is free, advertisements are the primary source of income for the app developers. This income depends on the traffic and customer type specifically.
Have you ever wondered how free apps make money?
Most of the time, you download an app from the store and simply start using it. Naturally, developers who offer apps for free expect pay in some other form. If you are thinking of developing an app and are unsure how a free app brings profit, the following article provides clarification.
In a nutshell, free applications make money from one of the following 8 most well-known monetization strategies:
?️ Advertising (via banner, video, native ad, interstitial ad, incentivized ad)
?️ Referral Marketing (Amazon)
?️ In-App Purchase & Freemium Model (PokemonGO)
?️ Subscription Model (Wall Street Journal)
?️ Sponsorship (Weather Channel)
?️ Crowdfunding (Hello Earth)
?️ Email Marketing (NY Times)
?️ App Merchandise & E-commerce (Angry Birds)
As free applications definitely outmaneuver the paid ones (considering download numbers), the main thing here is to find out how to capitalize on those new users, for example through app data monetization. With no further adue, let’s unveil the main advantages of creating free apps and the most efficient app monetization strategies.
Key app monetization strategies include:
?️ Advertising: interstitial, video, native, incentives, display ads and banners
?️ Email marketing
?️ Sponsorship
?️ Subscriptions
?️ In-app purchases
?️ Freemium upsell
?️ Amazon Underground
?️ Physical purchases and merchandise
?️ Collecting and selling data
?️ Affiliate income and referral marketing (from CPA to CPI)
Best tools to monetize free apps:
?️ In-app advertising tools
?️ In-app advertising for game applications
?️ Freemium model of app monetization
?️ In-app video advertising
If you’re a numbers person, here’s a quick recap of some mind-blowing mobile app statistics from App Annie Intelligence and SensorTower. Do checkout our detailed blogpost on mobile app statistics that will define app development in 2021 for all the meaty deets on the same.
?️ In 2020, customers spent $111 billion in apps
?️ Mobile ad spend rose to a whopping $240 billion in 2020
?️ 2020 was the biggest mobile shopping year yet
?️ Users spent 4.2 hours a day in apps
10 Successful Entrepreneurs Who Became Millionaires Through An App Idea
Here is a list of ten successful entrepreneurs who made their net worth more than 1000 Million with trending app ideas for businesses.
Entrepreneur’s list with a millionaire app idea:
#1 Kevin Systrom – Social Media App Idea – Instagram
#2 Travis Kalanick – Transport Ride-Sharing App Idea – Uber
#3 Whitney Wolfe Herd – Dating app idea – Bumble
#4 Tobi Lütke – Ecommerce app idea – Shopify
#5 Matt Maloney – Grocery/Food delivery app idea – GrubHub
#6 Changpeng Zhao – Cryptocurrency App Ideas – Binance
#7 – Daniel Ek – Music Streaming App Idea – Spotify
#8 – Reed Hastings and Marc Randolph – Video Streaming App Ideas – Netflix
#9 – Lars and Jens Eilstrup Rasmussen – Navigation app idea – Google Map
#10 – Alex Tew, Michael Acton Smith – Meditation app idea – Calm
Do mobile apps make money?
There’s a lot of money in apps. Billions of dollars. … For example, the top 200 apps generate on average $82,500 daily, while the top 800 apps generate around $3,500. Gaming apps also make around $22,250, while entertainment apps make $3,090 daily, so there is no way to firmly say how much an average app makes.
1. How do free apps make money?
Ans: When talking about how free apps make money, there are three basic ways, namely in-app advertisements, sponsorship, and referral marketing.
2. How much does the app store pay per download?
Ans: Apple takes 30% of the revenue made on the Apple app store and gives the rest – 70% to the developers.
3. How much does Google pay per download of an Android app?
Ans: Google takes 30% of the revenue made on the Android app and gives the rest – 70% to the developers.
Difference Between Free Apps and Paid Apps
| Free apps | Paid Apps |
|---|---|
|
|
