Everyone wants to learn how to create an app for free and make money.
Mobile apps are a great way for business owners to make improvements to their company. They are also the perfect platform if you think that your idea will be the next big hit, like Instagram or Snapchat.
Regardless of why you created an app, I’m sure you have something in common with other potential developers.
Reading: How to make money with android apps
You all want to make money. But it’s crucial to determine your app’s revenue strategy before starting app development. If you don’t have precise monetization models for your app, you could end up wasting time and money.
first of all, kudos to you for doing your research before you start building your first app.
I’ve seen plenty of people naive enough to think that just because they built an app, it would automatically make money. that’s not true.
Here’s an analogy. If you start a new business, you will automatically make money. absolutely not.
Whether in mobile app development or in other businesses, it all starts with an effective monetization strategy. don’t know where to start?
Fortunately, you’ve come to the right place. As an expert in the mobile app industry, I have the knowledge and experience to guide you in the right direction.
how does an app make you money?
We’ll cover the best app monetization strategies and show you some examples throughout this guide. But generally speaking, apps make money in the following ways:
- in-app purchases
- in-app advertising
- affiliate links
Unless you’re selling a product, service, or subscription, you’ll likely be relying on some form of advertising or affiliate programs to make money from your app. Even if your app is free and you don’t charge users to download it, you can still make money with these methods.
app monetization strategy: what are the best app monetization methods?
90% of the time spent on mobile devices is spent on apps.
Consumers clearly love using apps, so the opportunity is there.
The key is figuring out how to pick the perfect app that will pique users’ interest and ultimately drive downloads.
but you should realize that downloads alone don’t always translate directly into dollars.
Building an app is expensive, and you’ll run into hidden development costs along the way.
so before you throw all your money into your new app idea, you need to make sure it will make a profit.
Here’s what you need to know.
app monetization models: in-app purchases vs. a mobile site
For those of you who already have an existing business, I’m going to assume your business has a website.
hopefully (for your sake) the site has been optimized for mobile devices.
Websites that aren’t mobile-friendly will drive visitors away, so if that’s not something you’ve done, make it a priority.
Now, let’s look at the customer experience and how it relates to their buying habits. this will play an important role in your app’s monetization strategies.
Do you think users prefer to buy on a mobile site or directly through a mobile application?
apps win. here’s why.
convenience was the number one response from respondents.
The other top responses also reflect convenience and improve user satisfaction.
your customers want everything fast.
As I said before, if your website is not optimized for mobile devices, speed can be an issue.
but that’s not a problem when people navigate through your app.
Think of your app like any other business. the easiest way to make money is to keep customers happy and keep them coming back.
In addition to speed and convenience, the checkout process for a mobile purchase is also much simpler.
in-app purchases on free mobile apps are charged directly to the customer’s credit card associated with the app stores (google play store or apple app store). This is easy for app users as they don’t have to enter any credit card information to complete in-app purchases.
see how easy it is to buy something within an app if your customers have apple pay linked to their devices.
one click and you’re done. it’s that easy for the customer. this is how free apps make money.
how does this compare to a mobile site?
We’ve already established that speed is a factor, but for argument’s sake, let’s say your mobile site runs fast, too.
what else could slow down the client?
You won’t have your cards or accounts linked to your mobile site, so you’ll have to enter all of your information.
customer must log in to their paypal account or enter their credit card information.
Overall, it’s just a longer process and a headache for the user.
plus, typing all that information on a small screen leaves room for errors that can slow things down even more.
don’t get me wrong. I’m not saying your mobile site shouldn’t have a checkout page or ways to make money through credit card purchases.
All I’m trying to do is emphasize that in-app purchases are better.
The platform you launch your app on is also important.
ios vs. android in-app purchases
Take a look at the difference between ios and android purchases.
the average purchase per user on ios platforms is more than double that on android.
That doesn’t mean you should choose one over the other.
while ios may have a higher number for the average purchase, android dominates in terms of total users.
reviewing smartphone sales for the fourth quarter of last year, 432 million devices were sold.
Of the 432 million phones, 77 million had ios software while 352 million ran on the android platform.
the two platforms combined account for 99% of the market share, but android alone accounts for 81.7%.
That said, 16% of android developers earn over $5,000 a month from their mobile apps, and 25% of ios developers earn over $5,000 through app revenue.
so keep these numbers in mind if you only plan to release on a single operating system.
app monetization strategy for physical products
We talked about this briefly before, but I wanted to dig deeper into this topic.
To successfully sell consumable products through an app, you need to put yourself in the mindset of a mobile shopper.
79% of smartphone users have bought something online in the last six months. this number continues to grow each year.
You don’t need to become the next Amazon. I’m going to show you an example of a lesser-known company that knows how to use their mobile app to drive sales and make money.
You can follow their lead and apply their strategies to your app if you also sell a physical product.
I mean the company, a touch of modernity.
70% of the company’s total sales are generated from mobile devices. roughly two-thirds of those sales come directly from their app. so how do they do it?
Around 150,000 to 200,000 users download this app every month. 57% of their buyers are repeat customers.
When you have the ability to focus on customer acquisition and retention at the same time, it’s a formula for success.
It’s their checkout flow that makes the modern touch so successful.
When you download the app, it will create a profile that will store your information securely.
That way, every time customers open the app, they can go straight to shopping.
Use a simple navigation screen. customers can easily find and navigate to items that interest them.
Once they find something that catches their eye, they can click on the product to learn more.
Now the user will see a detailed description of the product as well as a larger photo.
If they like what they see and read, they can add it to their shopping cart with just one click.
once it’s in their cart, the customer can pay with a single click.
Your app allows users to complete the checkout and purchase process in just three steps.
There’s a lot less friction here compared to a mobile eCommerce site.
also, a modern touch can better communicate with your customers from the mobile app.
Send notifications to app users with daily deals and discounted items to encourage more purchases.
finally, this strategy works.
If you currently sell products on your website and mobile site, you can generate more income by building a successful mobile app.
monetization methods for free apps versus paid apps (free app monetization strategy)
Another thing you’ll want to consider is whether or not you’re going to charge users to download your app.
on average, it would obviously generate more revenue per download.
It might seem like a good way to get some profit up front, but it can turn people away if they have to pay.
90% of apps in the apple app store are free. free apps make money.
but that doesn’t mean you have to go that route.
Paid apps are a great way to get more loyal customers. if they’re willing to make the initial purchase just for installation, they’re more likely to use it and make additional purchases.
However, if you’re an established brand that already has existing retail channels and customers (like a touch of modernity), you’ll probably want to offer your app for free.
People download those apps so they can save money and get discounts, not spend more money just to have the option to buy.
please note; your application will also have competition.
so customers realize they can find something similar and potentially better for free, rather than paying to download yours.
If you offer an app for free, you can find other revenue channels. look at this statista data:
With free apps, you can get a lot more downloads, but users can engage less. if they don’t pay, there is no commitment. they could potentially download your app, verify it once, and never use it again.
While they may sound daunting, you shouldn’t look at it that way.
It costs you nothing for users to download your app and never use it.
Sure, I’d prefer active users, but at the end of the day, it’s not going to hurt your business.
If you’re not sure whether to launch a free or paid app, I’d lean towards recommending a free download.
will increase the chances of getting more downloads and you can earn money through other sources.
Here’s a look at ad cpm rates in the US for different mobile app ads.
so there is definitely some money to be made here if you can sell ad space in your app.
Please note that these numbers are averages only and are not set in stone.
If you have tons of daily active users and your app grows in popularity, you can negotiate a higher rate with advertisers based on those numbers.
free additional sale
free apps make money. You can always use the freemium model, which is popular with startups and gaming apps. With this method, the free version of your app can have display ads, pop-ups, sponsorships, video ads, banner ads, or other ways to generate revenue from your target audience’s app. you can earn money through a monthly sponsorship fee from major advertisers.
but then offer paid versions of the app with premium features, like removing mobile ads. the ad-free version offers a better user experience.
Some of the most successful apps make money by offering premium app content to earn money. others have a free app version and another version for paid apps.
here is an example. Let’s take a look at how a popular dating app accomplishes this on its platform. Surely you have heard of Tinder. users can download the app for free and use the basic features. but they offer premium content and features based on a monthly subscription.
The concept is very simple. users create a profile and add photos of themselves.
Based on their location and preferences, they will see photos of other users that match their search criteria (age, gender, etc.).
If they like another user’s profile, they swipe right. if they don’t, they swipe left.
When two people swipe right, they connect and can start a conversation.
everyone who downloads this app has access to these features for free. but there are certain restrictions. if users swipe right on too many profiles in one day, they can’t continue searching for 24 hours.
Another way to make money with a free app is through updates and subscriptions. the subscription model is great for recurring revenue.
That’s where a premium subscription comes in.
If users want to have unlimited likes, they can upgrade their account to access this functionality.
The upgraded subscription comes with other additional features such as location change, rewind, and an ad-free experience.
You can apply this same business model and pricing strategy to your application. allow users to download and use the app for free, but retain the best features for users who are willing to pay.
Showing ads in the app is another popular monetization strategy. this is one of the easiest ways to start making money with an app right away.
Unless you have affiliate marketing partners, displaying your ads through a third-party ad network is the game here. those ad networks will automatically show ads to your users, and you will be compensated accordingly.
The exact monetization model varies by ad type and your agreement with the network. for example, you only get a flat fee for ads based on the views they get. other times, you might get a higher payout if a user clicks your ad or takes an action based on your ad.
The four main types of mobile ads are interstitial ads, banner ads, in-app video ads, and native ads.
Referral marketing is another form of mobile advertising. With referral programs, you will advertise a third-party product or service in your app.
many referral programs pay more than traditional ads. this expands on what you were describing above. there is usually a referral link that you will promote and the payment is usually based on one of these models:
- cost per action or cost per acquisition: Measures a post-install action to see how engaged users are with the ad. for example, signing up for a free trial, buying a product, or creating an account could all fall into this category.
- cost per click (cpc) , as the name implies, is You’ll get paid based on the number of times users click the ad in your app using the cpc model.
- cost per view (cpv) – using the cpv models , you will pay me just for displaying the ad. as long as it is viewed by a user, you will be paid per view. these typically pay less, since the user doesn’t need to click the ad or take an action.
- cost per install (cpi) : This is a specific type of action. you would be paid each time a user clicked on an ad that led to the installation of another app.
Referral marketing programs can be very lucrative if you find the right partners.
here’s a quick rundown of how free mobile apps make money:
- in-app advertising (native ads, banner ads and in-app ads such as weather channel app and other similar apps)
- in-app purchases (products or service apps)
- offer in-app purchases (like an upgrade on game apps)
- free apps
Regardless of your app idea, you can still launch a free mobile app, drive free app downloads, and have a successful app that makes money. Some of the most popular mobile apps are free and still get a lot of app downloads.
Not all apps make money.
If your plan is to just create one without an app monetization model and just sit back and collect your money, you’re in for a rude awakening.
Just like a business, you need to have a strategy and a goal before you start building an app. it might take some time to get it right. The best monetization model for you and your app may be different from my app monetization model and my own app.
You may have better luck with some platforms than others. app users behave differently. So it wouldn’t be surprising if you were more successful selling paid apps for your iOS apps compared to your Android apps. For your android app, you may need to use another monetization model to earn money, like a freemium model or in-app advertising. results will vary from respective app stores.
mobile users prefer apps to mobile sites.
So while your business definitely needs a mobile-optimized website, an app can greatly improve the customer experience.
Sure, you’ll have some upfront costs when you build, develop, and launch your app.
but you can save time and money by creating an app through the buildfire platform.
If you sell a physical product, having a mobile app will help you make more money.
Compared to desktop sites and mobile websites, mobile apps have the lowest shopping cart abandonment rates. why?
The whole process is easier for the client. they can buy something with just a few clicks instead of entering all their information.
You’ll also want to decide whether to offer the app for free or make users pay to download it. ultimately, that decision is entirely up to you. but I would recommend offering free downloads.
App owners and app developers can still make money from in-app purchases, ads, and subscriptions that offer premium upgrades.
If you follow this guide, you’ll be well on your way to building a mobile app that actually makes money.
Do you plan to release your mobile app on ios for apple app store, android for google play store or both?