The app stores are FULL of apps that cost exactly $0 to download.
In fact, over 90% of apps are free according to TechCrunch!
But just because apps are free doesn’t mean they can’t make money.
Obviously free apps have huge revenue potential.
So how do free apps make money?
To do that we’ve included successful examples of each one for you to check out as well.
Let’s get straight into the list!
Just like with web sites, you can make good money by getting people, companies or brands to sponsor your apps.
This was an under-utilised app monetization method until fairly recently, but it’s starting to take off.
Basically the idea is to build a niche app with a specific target audience.
You then find a person or company who has a similar target audience and do a deal for them to sponsor the app.
Here are some examples of successful sponsorship arrangements:
Subway sponsored the PrePlay football game app to engage with fans during Super Bown XLVI.
Subway wanted to get in front of the PrePlay audience and this is a perfect way to do that.
The Subway brand is featured throughout the app and Subway also gets mentioned during videos inside the app.
The subscription model looks something like this:
— The app is free to download
— There might be some free content available in the app, but not always. It’s completely up to the developer.
— The user must pay a regular subscription fee to unlock all of the content in the app.
Subscription models work well in mobile apps that regularly have fresh new content added to them.
Think news apps or apps with unique video or audio content.
Some of the most talked about and most successful apps in recent times have been the Kardashian / Jenner series of apps.
Basically a bunch of the Kardashian / Jenners released their own apps with makeup tips, fashion advice, videos etc.
They monetized the apps by having a $2.99 / month subscription fee.
Users must subscribe to get access to any of the content inside the app.
3. Email marketing
Just like on the web, email marketing works by collecting email addresses and marketing offers to people via email.
Mobile apps offer a new opportunity to collect email addresses of people who are interested in your product or service.
Even though email marketing is one of the most effective marketing strategies on the internet, it’s still largely underused in the mobile space.
Most of the big players are taking advantage, but it’s not something that most smaller developers are looking at yet.
Example of email marketing in action:
Check out what 1App did with in-app email collection. This app belongs to the creator of LeadLayer, and he managed to collect over 40,000 email addresses from the app.
4. The ‘Freemium Upsell’
The ‘freemium’ model is one of the most common ways for free apps to make money. We’re sure you’ve seen it in use plenty of times before.
Freemium apps are free to download, but they contain in-app purchases (IAP’s). When I say ‘Freemium Upsell’ I’m referring to apps that offer limited free functionality, with the option to unlock full functionality with an IAP.
The general idea is that a user can download & use an app for free. If they like it and want more from the app, they have the option of spending money to get it.
5. Selling Merchandise
One of the first big apps to use branded merchandise as a monetization method was Rovio’s Angry Birds.
You can buy all sorts of Angry Birds merchandise including toys, clothing and more.
The basic principle here is taking a your brand or product and creating physical goods to sell along side it.
These physical goods can be sold from within the app, and they can also be sold through email marketing if email addresses of users are being collected.
Which of these ways to make money from free apps interests you the most? Are you planning on trying any of them in your own apps? Go ahead and share your thoughts in the comments!
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