When a newbie mobile user at first comes to Apple Store or Play Market, he might be a little confused about the variety of applications that developers offer to him. And what a surprise, they are mostly for free. And here comes a cognitive dissonance, how on earth such useful and labour consuming products can be given away for free?
It’s not obvious that free applications outrun even the cheapest ones on downloads. So their popularity is not something hard to understand. So now we got to this article's topic: how do free apps make money?
Making money free apps style
Making monet from apps is a hard work. How to make money from free apps is a great mystery. But we know a way or two about how to create an app and make money, so we'd like to share our priceless knowledge.
How app make money in general. Usually it's a payment-based way of monetizing, it's popular among mobile applications as well as among desktop programs (anti-virus software, PC cleaners,s online games and so on). When you develop seems like a money free app you intentionally create two (or even more) versions: Lite that is free to use and Pro that is necessary to pay for. Some companies provide customers with several premium expansions (Pro, Ultra, Mega etc).
So why people would pay for something that is free? Actually, very often apps that we download for free are just demo versions for a habituation.
Premium expansion gives users an access to full application content. So if you want a faster progress in a mobile game or an ability to save accomplished projects with the help of an app in different formats or you want full variety of filters, tools etc, be so kind to pay.
To make money with apps you should pick up a strategy. One of the most popular is providing users with full content for free but on a temporary foundation. So you try an app, you like it, and now be ready to pay. This strategy is aimed on users who don’t want to pay for a pig in a poke. And this is how free apps make money, bro.
Anything can be sold
Count of downloads prove that users like apps when they are up to decide if they want to pay for extra features. This way of monetizing is so profitable that developers rebuild their fee-based applications on this basement.
The biggest field when in-app purchase is used is a mobile game industry. Here developers offer extra features that are influential on a gameplay like in-game currency, faster levelling or better gear that you can’t obtain for free.
This way, apps’ “freeness” works as a temptation for customers. They try the product, they like it but as every sales manager will prove you, client always wants more. Rather it’s a game changing feature or it’s actually not so necessary for comfortable using.
In-app purchases can be conditionally separated on two kinds. The first is purchasing consumables like “give me extra 200 coins or this cute armor for my $0.99”. The advantage is that purchases can be done over and over again. The other kind is one time purchase like an extra level in game or permanent access to an extra feature.
In-app advertisements usually look similar to those we see on websites. This a bit aggressive marketing strategy will also answer a question of "How to make money from a free app" so there is no need to underestimate it. Usually, ads are provided in Lite versions of application and going Premium can turn them off.
This way, advertising is the ultimate strategy to monetize Lite version. Actually, ads are sometimes so annoying that it becomes the #1 reason for users to go Premium. There is another good strategy: to provide ads shutdown as an in-app purchase but it’s maybe too aggressive.
Ads implementation to applications is done by advertising networks. The biggest are Apple's Ads and AdMob - an offspring of Google. Actually, you mustn’t rely only on advertising because this strategy has low CPM so think of it as an additional revenue but not the main.
Act like Da Vinci did
This is an ancient way of capitalizing something free. Sponsorship gave humanity the best art masterpieces (a lot of Renaissance artists had sponsors) and great science inventions (martian colonization is now sponsored by SpaceX).
Sponsorship in app industry is a great idea of making money up front. Another great thing is that your application will be launched using your sponsor’s brand. It’s obvious that big and famous companies have bigger credit of trust than newbies.
There is a specific kind of sponsorship that gains popularity from year to year. It’s crowdfunding. The idea is simple as hell. As a developer, you start a crowdfunding campaign and regular people sponsor your idea. But why people sponsor developers? The most popular strategy is to provide sponsors with extra features like constant Premium, in-app goods or even merchandize. So that’s how things are done.
All of topics mentioned above have their pros and cons so they create a huge field for developer’s fantasies. Before implementing a revenue-generating strategy, developers should do a lot of preparations and analyzing work. The right way can be chosen with the knowledge of both your product and your audience.
Thunderrise Dev Team knows how do apps make money, just ask us for details! ;)