How does free app make money?

How does free app make money? Learn about the monetization process of mobile applications and how an app developer gains money from making apps.

App Monetization Strategies

Setting up income streams is important to get money from a free app. The following are the top 8 monetization methods used by free applications:  


Nowadays, notably, the simplest and most popular approach to monetizing a free app is through mobile ads. Presently, 7 out of 10 apps contain embedded advertisements that bring in money for each impression, click, or download. Native, interstitial, banner, in-stream video, and rewarded video are the five different ad types that can be used in a mobile app.

Referral Marketing

This is closely related to the earlier approach of app monetization that used in-app advertisements. Even more distinct from traditional marketing is affiliate marketing. The app includes informational material about a partner business. You receive benefits depending on clicks and installs, and these rewards are based on a cost-per-action (CPA) model or revenue sharing.

In-app Purchase and Freemium model

The freemium app model makes extensive use of in-app purchases, which can be used to sell real or virtual goods, provide deluxe features or extras, disable advertisements, or unlock additional app content. The app store is in charge of these transactions. Naturally, the owner receives a commission on each transaction.

Subscription model

The free app's specialized services are covered by the subscription model, which establishes revenue streams from weekly, monthly, or annual subscriptions. Most cloud services, audio, and video content providers, and digital news sites adopt this model. In this concept, the consumer will have access to the content as per the consumer's selected subscription plan.   

Sponsorship model

Getting sponsorship is a profitable business strategy to employ to monetize a free app, and this strategy is often accessible for developed apps with active user bases. Applications with a specialized market niche can reap the most benefits, so you can approach advertisers in the same field to match their brand with ads, content in the app, or app design.

Crowdfunding model

This approach is comparatively new for free app monetization. Kickstarter, Indiegogo, CrowdFunder, and AppsFunder are a few platforms that custom software developers can utilize to raise money for app development and marketing requirements.

Email marketing

In whatever business, email marketing has always been a successful tactic. Email marketing is a time-honored method of gathering user information, primarily emails, and distributing relevant marketing materials to pique subscribers' interest in a service or product.

App merchandise and eCommerce

The e-commerce sector is expanding. The community of internet shoppers is growing every day. So, the majority of tangible goods are sold through the use of free mobile apps.

Making money from mobile apps at the moment is a challenge. It is a result of an oversaturated market. However, keep in mind that with a free mobile app, financial gains come from innovation and reinvention.

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