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How to Make Money from Free Apps?

28 Jun, 16 Marketing, Monetization,

When your app is free (which mostly is in the present times) you need to hone your up selling skills. You need to include options like CPI networks (cost per install), second phase for your app that requires payment, Ads, In-App Purchases and sponsorship models. There are some leading apps which charge nothing for downloads. Some of the most popular free (yet top earning apps) apps are Spotify Music, Clash of Clans and HBO NOW. Users want their apps to be freely available. Then how come app makers leading the race churn profits and high value return from their apps? ‘Free’ is a market trend (in the billion dollar app marketplace) with push selling and up selling being the only remaining options to make money. Taking note of app monetization strategies will open up options for revenue generation. We suggest you to familiarize yourself with your target audience, the existing app market and your competition. Here is a list of for you to know in order to make money out of free apps:

Most Common Actions

Monetization strategies need to be made successful. They are an essential part of an app’s life.
Market research is important. Missed out opportunities on monetization must be identified.
A large and active user base is needed to increase chances of revenue growth. It takes persistent efforts to grow a large user base.
Subscriptions for added features and paid content must be set for a certain span of time.
“Freemium” apps being free to download must be included to engage users in paid access to additional features.
User impressions are increased with the help of In-app advertising. Increased clicks and taps from users bring churn more revenues in the long run.
An app offers paid and optional features through In-app purchases.

Know your Users and your App Market

Do extensive research on apps present on the app stores. Carrying out researches on your competitors is also an important task in hand. You need to gauge the existing practices for monetizing competitor apps. It is an uphill task to jot down the exact number of competitor practices as there are several covert marketing tactics maintained by agencies.

There are numerous ways app content is framed. Identifying ways of content placement is important to truly understand ad impressions or optional transactions. You can gain an upper hand and include actions that might have been missed by your competitor.

Understanding your users is as important as identifying your competitor’s strategies and actions. The main motive of developing an app is to chalk out an essential mobile monetization strategy. You need to know why users (a limited number of them) will tap top pay for added features in your app. Your app needs to attract large number of users. That should be your initial motivation. Learn about user tendencies and perform extensive research on demographics.

You need to sort out your app features before putting in-app purchases. There must be a fine balance between what users are paying and what added features they receive post payment. Avoid being too shrewd in your offerings. Users must see earnestness in your offerings or else decreased desirability factor in your app will drive away your users (as they will fail to see no value in using your mobile app).

App Monetization

Free apps have the advantage of experiencing several monetization options. Revenues get generated with the help of In-app purchases and in-app advertising. Users are not forced to purchase full versions of the app. You need to understand the pulse of your users in order to launch your monetization plan (suitable for your app).

In-App Purchases

If you can rightly utilize ‘in-app purchase’ in your app then you can surely turn your free app into a good revenue churning tool. The free version can offer additional, optional and paid features which can be bought by users. In-app purchases are most commonly used in gaming apps as users are instigated to reach new levels and get new features and game gears. The most common example is Candy Crush Saga where users are asked to buy extra lives to continue playing smoothly. Users also make repeat purchases as the tools, features and lives are required throughout the games. Consumable items are repeatedly required for purchasing.

Mobile apps like Apple Music, Calcbot and 1Password allow users to continue using the purchased items unlike consumable items which does not remain after one point of time and need repurchasing.

Free apps offering certain special features that are paid components are considered “freemium.” Free apps with lesser features can be included in a freemium model. Users can also try certain features (after purchasing) and choose to convert to previous versions. However, this is an area that is being worked on as developers around the world are making arrangements. Currently there are no true trials in the app stores for this ‘convert’ option.

Android and iOS apps offer auto-renewable subscriptions to users opting for in-app purchases. Apps having ongoing costs attached to them are usually opted for renewing subscriptions. FamilySignal is a good example for this recurring subscription option.

Read Also: Top 10 Platforms for Building High Quality Apps

In-App Advertising

In-app advertising is important for bringing growth in your app business. This is used to monetize mobile traffic and sort out the ROI of your app. Marketers are able to target the right audience at the right time with the help of in-app advertising. Advertisements start paying off when click-through and user impressions start to work. Visual ads in the form of videos, etc work better.

There are several ad networks for mobile devices that offer a wide range of advertising models. Google’s AdMob and Millennial Media are good in-app ad platforms used by organizations around the world. Data collected marketers on the basis of demographics, local events and certain location based real-time information is analyzed, matched and utilized in creating dynamic in-app advertising. Gauging user behaviour is important in presenting customized information for mobile audiences.

Sponsorships

Sponsorship model is regarded as a good revenue model in the app monetization world. Until recently it was not held in high regard but with tremendous shifts in industries and customer retention procedures, sponsorship has reached a high spot. Considerable money is earned when people and brands sponsor your apps.

Your work will include creating an app that targets a niche audience. Your next job is to find an organization or a brand that would benefit from your app as they have a similar target audience.

Sponsorship agreement usually follows the following tracks:

You change the look and feel of your app to suit your new sponsor’s brand.
The name of your app is also changed and content is created to match your sponsor’s brand.
Your app is presented to the world in a manner as if it looks like it has been created and owned by the company (who is your new sponsor). This is a common practice in the business world and is more commonly known as white labelling.
You earn a lot of money in exchange of your app from your sponsor. However there are various ways of earning money. Revenues (earned by the app) can be split between you and your sponsor. Your sponsor can also choose to pay you monthly fees for app usage and maintenance.

Sponsorship can benefit app makers to a large extent as a reputable brand has wide set of followers. Large online presence popular social media accounts, blogs, YouTube channels and various other promotional platforms will bring in huge promotion and lots of downloads.

Affiliate Marketing

Huge earnings can be made from affiliate marketing. This is a type of promotion and selling of services and products in exchange of a cut/percentage of the total earned revenues. This is more like a third party contractor’s job. Amazon is the greatest example of an affiliate marketer who lists and sells products of numerous brands and labels. Amazon charges a percentage of the revenue generated from the overall sales. As a mobile app developer here are the ways in which you can earn money from affiliate marketing:

App Promotion – As a publisher you can decide on the apps you want to promote. Each installation will have payouts. A lot of manual tasks are included in this arrangement. You need to choose ad networks who promote advertisements inside apps. A publisher gets paid each time users click on the ads or installs certain advertised apps. Your task as a publisher is to choose which ads to promote in your app. You can earn impressive amounts from the payouts per install. Soon after choosing an affiliate network, you need to choose a suitable mobile app affiliate offer. You need to assess the payment options like installations, pay per clicks, etc and the rates of payment per action. Ad creatives and pop-ups need to be made before taking the user to your affiliate link.
Banners and Pop-ups – The process is similar to the above one. The only difference is to find products that interest your users and promote them through your ad banners and pop-up adverts.
Promotion through in-app store – Ecommerce apps benefit from this process. Apps make a lot of money from this kind of promotion. Products are showcased across numerous stores. Virtual shopping gets an added value. App publishers get value in return of promotion. There goes a lot of research on the trends before pursuing this promotional exchange.

Subscriptions

This is a standard revenue model for mobile apps that includes free app download and subscription offers (depending on the developer) that allows users to unlock app content after paying a regular fee. Google and Apple handle all kinds of subscriptions and transfer payments from users to your kitty.

Selling Merchandises

Selling of merchandises is a veritable form of app monetization. Biggest example is Rovio’s Angry Birds who promoted and pulled huge revenues with their toys, clothing and several other items. The idea behind this revenue model is to create app perspectives in line with branding and product. Creativity is required to bring out physical items in line with the mobile app (or game). These goods can be sold from the app or through email, etc.

A strong sense of branding and promotion is required to engage in mobile app merchandise selling. With time the process has simplified. Amazon has sold it customized t-shirts from within their apps.

Read Also: Strategies for Mobile App Revenue Boost

Remain Subtle and Take Promotional Actions

Never forget the purpose of your app. Mobile audiences are smarter and more sophisticated. Mobile users are not known to take solely monetary minded app makers lightly. Advertisements and in-app purchase aimed solely to generate revenues are never tolerated by the mobile audience. Subtlety and persistent actions are the keys to your success in the mobile marketplace. Ads need to be intelligently created and presented to receive popularity and earning capacities. Easy to use and intuitive user experience is an all-important factor in mobile app marketing.

Choose your monetization strategies according to your brand and business goals. Keep track of your daily data and pursue new things to keep alongside current trends and innovations.