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App Monetization: Free Apps

When Free Doesn’t Mean Zilch: Making Money From Publishing Free Apps 

Can you recall the number of free apps you’ve downloaded from the app store just this month alone? Now try to do a mental calculation of the number of free apps you’ve downloaded since you first purchased your smart phone.

One thing you should be aware of is that free doesn’t mean zero income. In case you are not aware, Google Play Store makes 98% of its revenue from the numerous free apps you are downloading. We are not just talking about gimmicks or fluffs, the results are visible. The top grossing app hall of fame is lined with free apps!

This means that even though they are called free apps, they still make money! If you have been considering taking the first steps in creating an app but not sure how you might generate revenue, continue reading. 

Free App Revenue Strategies

  • Product Subscriptions

In this model, you offer a free app to download but lock certain areas of the app or content behind subscription memberships. It’s as simple as that. Check out those free games you have on your smartphone, you may be able to play the game but unlocking those seemingly interesting areas come with a fee. If you play games often, you are familiar with in app currency. This is where you must purchase some type of coins or other currency to move on the next level or earn digital goods. Both are great revenue streams.

Looking past games, let’s use the example of a recipe app. The usual recipes are all free and accessible but keep the juicy ones locked away. Users must subscribe to have access to the exclusive tastes, geographical masterpieces, and whatever else they might find interesting.  You gain the trust of the user by offering recipes that are fun and exciting, they are then more willing to spend their hard earned dollars to see what else you have hidden behind the curtain! 

  • Email Marketing.

This internet marketing strategy is quite underutilized. Many internet marketers know the effectiveness of this strategy but it is largely unused in mobile apps for revenue generation. You can use your app to collect as many emails as possible from your users. Instead of paying for an app, users give their email addresses with the understanding that they will be marketed to later on. Be careful with this one, not informing your users first that they will receive advertisements can land you in hot water.  Actually collecting emails from users isn’t that hard, you can either ask nicely with a pop-up box, or embed a backend like pass with Facebook Login for verification. There are also third party tools that can help to collect addresses as well.

  • Sponsorship

If you are fitness freak, you have most likely downloaded one of the 30 Day Fitness Challenges. What you might not have been fully aware of are the sponsors listed throughout the app. Whether it is protein, gym memberships, or fitness apparel, these apps utilize partners or sponsors to generate revenue while still offering their apps for free.  You can do this with your app as well. Do you have any companies that might want to market to a specific user demographic? Maybe you are making an app geared towards entrepreneurs. There are thousands of companies out their looking to market to small business owners. Leverage your niche market demographics to offer better qualified leads to advertisers. These qualified leads can sell for higher dollar amounts! 

  • Amazon Underground

Amazon Underground is new but quite profitable.  To have your free app in the Amazon App Store, there won’t be in-app purchase or ads, both are disallowed. Amazon Underground has an app which is the means of accessing the listed apps. In case your app contains in app purchases, you will have to wave it to be listed on Amazon Underground. Don’t be scared, you will get paid may be not handsomely but modestly by Amazon. For every minute of user by a user, you will earn $0.02. If your app has to do with lengthy sessions, you could be smiling to the bank every weekend.

  • Advertisements

We all know this one, prior to reading this article you thought it’s the only revenue stream for free apps. Quite popular among mobile developers but that doesn’t mean you cannot use this medium for revenue generation. Let’s hit it head on. There are ads network that can display either interstitial ads, video ads or banner ads in your app. You will get paid by these networks per number of installations, per click or by number of impression.

  • Affiliate Marketing

Affiliate marketing is simply helping others sell their product while you have a cut of the profit. Amazon is a leading provider and many affiliates make thousands every month. You can also earn as much as you want via your free app. You can help to advertise other apps with yours or help to market products and services through pop-up banners. For every product and services purchased through your app, you are entitled to receive a cut of the profit at the end of the month.

  • Merchandising

When Rovio first started selling Angry Birds merchandise people thought they were crazy.  With only a few months into their new marketing strategy, it became a major source of revenue and doubled as free advertising from the Angry Bird’s apparel. Like Rovio, you can sell physical goods along with your apps. Just make sure you do not sell the physical goods through the app itself as this is a violation of the App Store and Google Play terms. Build your user base, then sell them goods! This only compounds!

 

 

All in all, there are thousands of ways of generating huge profits without ever charging for a single download. Feel free to contact an Appsketier to learn more about in app monetization strategies and App development in general.

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