How to make money with a free mobile application?
How can I make money with a free mobile application?
Unfortunately, only a small number of users are willing to pay for a mobile app straight away. Even though the number of mobile application installments continues to grow, users are becoming increasingly “unloyal”.
According to Statista, the number of mobile app installments is going to grow in the upcoming years. It is predicted to grow up to 258.2 million installments worldwide in 2022.
Therefore, you should definitely get on a wagon of the mobile application movement, but be smart about it. There is more than one way and by the end of this article, you will know everything you need to know about monetizing free mobile applications.
A few tips before choosing a monetization model for your mobile application
Firstly, you should start thinking about monetization of a mobile application at the beginning. Beginning meaning, at the developing stages of an app. For instance, it’s important to know your mobile applications:
- Purpose – why are you building a mobile application
- Goals – what goals should your mobile application reach
- Users – who are your users; what are their characteristics; why are they going to use your mobile app
Also, you can check out the blog about how to determine mobile application costs and maintenance to know how to prepare for the development process and make it as efficient as it can be.
So, once you know the purpose of your mobile app and have a clear user persona, it is easier to decide on a monetization model. It is important to choose a strategy or more strategies based on the feel and purpose of an app. In this way, the users won’t feel spammed and will be happy to give you money.
Keep in mind that your app must provide value to the user. You can do this with basic specifications of an app or even with a monetization strategy, it doesn’t matter, as long as the users feel they are gaining something with the use of the application.
Once you know all of these things you can start calculating just how to make money with a free mobile application. The choice isn’t going to be easy and we recommend you to choose wisely.
In the rest of the article we’ll define a couple of popular monetization strategies you can use to make money with a mobile application:
- In-app advertising
- Freemium model
- Subscriptions-based model
- Premium model
So, let’s go through each one of these monetization models to see which one suits your business the best!
In-app advertising in mobile applications
Maybe the most popular way of making money off an app is in-app advertising. What exactly does this mean?
To put it simply, with in-app advertising you are renting an advertising space in your app. This can be pop up ads, banner ads, video ad, etc.
The thing to keep in mind when allowing advertising in your app is relativity. The ad should be relevant to the app user and comply with your app’s goals and purpose.
For example, if you have a tourist app with tips on attractions and monuments, the ad for indoor sports gear is not going to be relevant.
Actually, you will achieve the contrary effect. User will probably get annoyed and stop using your app.
There is a way to avoid bad reviews, installments and low ratings of a mobile app, but why not save some trouble and publish relevant content right from the start.
The great example of in-app advertising is actually one of our clients, Index.me. They came to us, to build a mobile application version of their news portal. Since the application is completely free and the goal is to gain more readers, in-app advertising represents a perfect solution.
Also, readers are used to seeing ads on news portals and won’t get easily annoyed. The key is to keep it tasteful and not spammy.
Ads are relevant to the content, the reader is reading and might even help them. In this way, the app is making money, and at the same time, the advertiser is also making money, since interesting readers are clicking and taking action.
Make money with a free mobile app through sponsorships
Sponsorship can be a great way to make money with your free mobile application. It is based on partnering up with different companies, products or people that are going to pay to be featured in your app.
The key thing is sealing the deal before the start of the development process. Firstly you need to:
- Identify possible partners
- Choose a niche for your app, but also think about sponsors products and users
- Identify users and their characteristics
In this way, you can include sponsorship parts into the development process.
For example, a fitness app that features workout videos teams up with a company that manufactures fitness equipment. When filming videos for the app, the trainer is going to include and mention the company whose gear he or she is using.
Thus, sponsorship is a great way to make money from your free mobile app without users noticing or feeling spammed. To use the best of sponsorship strategy, try creating really great content that is going to add value to mobile app users as well as to the sponsors.
Sponsorships or even partner relations with different companies are a relatively new way of app monetization, but as seen from the example, it can be very effective.
Freemium model strategy to monetize your app
As the word suggests a freemium model is based on providing a free app and then charging later.
Basically, users are installing a free app but will eventually need to pay. There are different ways of a freemium model.
A popular strategy is to only provide a basic model of the application to be installed free of charge. After the user is hooked, the app will offer a better (upgraded) version, for a price, of course.
Users that loved the basic version of the app will pay to unlock all of the features of the app. This can often be seen with music streaming apps, like Spotify.
The app allows you to listen to music and make your own playlists for free, but at the same time, you need to listen to the advertisements. If you pay, the app becomes add-free and gives you the option to download music and use multiple devices.
Also, a popular strategy is to provide free installment and usage for a certain period of time, for example, a month. After a free month passes the user needs to buy the application if he or she wants to continue to use it. If the user likes the app or needs it, they will pay.
So the point is to trick the user into installing the app and win him/her over with the app so much that they are willing to pay. No wonder this is the most popular monetization model for free apps!
Make money off a free app with subscription
The subscription-based model is relatively similar to the freemium model. User is installing an app for free but after a certain amount of time, he or she needs to subscribe and pay.
This strategy can work well for apps that continue to deliver new and valuable content to users. For example, specialized magazines that deliver valuable content to readers.
Another great example, is language learning apps, like Memrise. The app allows users to learn languages for free but if you want to unlock all courses, languages, and features you need to subscribe.
Also, the great way to get more subscribers is to offer a monthly, quarterly or yearly subscription, like Memrise app.
Remember! If the app has fresh features that help deliver great content, the users will happily pay for the subscription. Find out how to provide an up-to-date newspaper app!
The difference between subscription and freemium model is in times the user has to pay. The subscription can be monthly or yearly. But with freemium apps, the user usually pays only once and the app is bought.
The premium model can be a way
Premium apps of paid apps request the users to pay for the installment. This is a straightforward way of making money off your app. It also means you can count on the lower number of app installments. Like stated at the beginning, people don’t like to pay for the installation of a mobile app.
This model can be great if you already have an established brand and a loyal customer group. Computer games are the pioneers in premium app models.
For example, Minecraft game went mobile and has no problem charging users for the app installment and usage. This is due to its good reputation and loyal user base.
So, loyal users will pay for the installment because they have a connection with the brand. Also if you are a big company that delivers value to its users, this model is probably going to work out for you.
On the other hand, if you are just starting and are fairly unknown, the premium model might not be for you.
How to choose the right monetization model for your mobile app
You have a lot of question marks above the head right now? Don’t worry.
It can be a difficult choice to make.
The things you can do to simplify the decision process is to answer these questions:
- Why are users going to install your mobile application?
- What value is your mobile application delivering?
- How might my users react to any of the monetizing strategies?
- What strategies are going to be the most profitable for my application?
- Are my users easily annoyed with ads?
- Are my users willing to pay for the installment of an app?
- Why are they going to continue to use the app?
Try not to spam your users as well as not to overprice your app. No matter the model you choose, try to incorporate it with your brand and mobile application.
Even if you have a tourist or travel app and think you can’t make money off it, think again. The key is to make the app relevant and send a message of value.
If the user believes he or she will benefit from the app, they will gladly pay. Thousands of free apps had done it right and you can be one of them!
So, analyze your app, or app idea, and find the right strategy or multiple strategies to make money off your free mobile application!