It seems in today’s fast-paced life, one can’t seem to imagine being without mobile applications – whether they be on tablets, smartphones or wearables.
Apps have become the epitome of our lives – entertaining us and providing valuable services to facilitate day-to-day living and even help us become more productive at work.
The market for app development companies continues to expand and if you’ve ever wondered how app developers in London or anywhere else in the world, for that matter, make money from free apps – then sit back, grab some coffee and take a read.
How could ‘free’ apps make money?
Before anything else, let’s quickly shed some light on a few app monetization statistics:
According to data published by a Statistica 2019 survey, Q1 of 2019 saw:
- 1.8M downloads at Apple’s App Store
- 2.1M downloads at the Google Play store
- 6,70,000 at the Windows Store, and;
- 4,75,000 at the Amazon Appstore
Did you know that as app users, we don’t really pay attention to how many downloads each app store has seen because most of these apps are available for free? But then – how does the respective app development company behind each app make a profit?
Enter the world of App Monetization
Another report recently published by Statistica revealed that on average, 96% of apps on Google Play and 90.3% of apps on the App Store are available for free. Furthermore, and interestingly enough, the top-grossing Android and iOS apps belong to the free-to-download section.
With so much “good stuff” available for free, you might wonder how an iOS app development company, for instance, might generate enough revenue to stay in business?
If you look at some of the most popular apps today like Tik Tok, Facebook, Tinder or Fortnite, it’s easy to see how polished they are. In fact, one can imagine the amount of creative energy and maintenance costs that might have gone into these apps to maintain that level of polish, not to mention the expenses involved in making them available and marketing them.
In order for app development companies to continue coming up with fantastic products, they must first overcome the initial cost of development and operational expenses associated with bringing apps to market. Not only that, but they must generate enough profit to keep their growth as an app development company on track. And this is why all free apps require monetization.
To accomplish all of the above goals, app development companies rely on any one or all of the following app monetization strategies, some of which include in-app advertisements and purchasing options, selling user-centric data and more.
These strategies rely on clearly devised app monetization models that demonstrate how an app development company can make money and earn revenue which exceeds the average ROI.
Make Money from Free App Now – App Monetization Models to follow
In-app Advertisements
Perhaps one of the most popular app monetization methods in use today is using the mobile app’s own interface for advertising – where the app developer charges interested 3rd parties a fee for displaying their respective ads on the app.
Smart ways of displaying these ads may range from simple banners appearing in a minimalist way to short video clips shown to users when they reach a certain point in the app or between the app’s various functions.
Instagram is a good example of this app monetization model and has become an Instagram marketer’s favourite advertising channel.
In-app purchases
When it comes to the in-app purchase monetization model, gaming apps immediately come to mind. It’s based on a fairly straightforward idea: users find the game addictive and engaging and want to buy add-ons and extras in order to extend or heighten the experience in a number of ways.
From faster cars or better-performing weapons to easier level-ups, in-game cash grabs and character customization – there are many ways to keep your users engaged while making a reasonable (or generous) amount of profit, depending on how well these add-ons are liked.
Fortnite, when it launched on iPhone in 2018, allegedly made $2M a day by offering in-app purchases which ranged from costumes and skins to “Battle Pass” and “V-bucks”, which give players exclusive access to additional gameplay features.
User data selling
If you can engage users through your app and find ways to draw generic to more specific information from them, such as contact details, you can use this monetization model to generate huge profits.
Under this model, data related to a user’s preferences and interests is sold to interested 3rd parties who then use the information to improve their product development and marketing campaigns.
For example, a social media app having a “check-in location” feature can accumulate a world of data on all the local hotspots. A retail chain could use this data to find an ideal location for their next brick-and-mortar store and business owners will pay ‘top dollar’ to the app development company to acquire this data.
Lead generation and affiliate marketing
This model involves gathering data on paying customers or potential buyers to promote 3rd party products through a commission fee.
For instance, financial apps gather vast amounts of financial data on their users on a daily basis, as those users utilize the services. This data can be used by financial institutions like credit card companies or banks who can use it to get leads. In return, the financial institutions pay the Android or iOS app development company for consuming the lead-based data.
The highly popular finance tracking app, Mint, makes profits through this model. It also shows ads for financial services and products that their users might want to click on. While discovering useful services and products this way certainly enhances the way users see Mint, the app also makes a commission from sales of the financial services/products it advertises.
In closing
Ironically, free apps generate a lot more revenue than paid apps. And as an app developer in London or anywhere, really, it pays to be aware of these popular app monetization models for your free app.
