Do you want to create a custom app for your smartphone? If you want to know the strategies to make money out of it, then welcome (others welcome too); this blog is for you.
So, how to make money from your phone? Free apps always are more (in number) than paid ones. Most people only have one thing on their mind – how do free apps make money?
The point here to ponder over is that if the apps are free, are the publishers putting all the money from their own pockets into these apps, maintaining them, and looking after them? But this is somewhat true. They have put all the money from their pockets but are constantly funded by third parties and customers.
There is no single source of income for these apps but multiple ways through which they can earn. Let’s talk about 11 kickass strategies which can help you get rich right now, that is, in 2023. Here we go!
Brilliant Advertising Is The Key
Advertising is done through a third-party ad network. It is done through apps to make money you’re your phone. According to the latest report and study by Statista, here are the details on mobile advertising spending in the year 2022 and expected in 2024.
2022: $327.1 billion
2024: $399.6 billion
There is no rocket science in ads. You simply have to show commercials in your app. That’s it. Moreover, advertising is the finest way to earn cash from apps. All you have to do is display ads in your app. Mostly, the app owners are paid when the user clicks or hits the ad, or when the user installs the application via advertisement, the app owner gets paid.
You will get paid each time an ad is displayed (per impression), per click on the ad, and when a user installs the advertised app. Being a free version app, you can also run ad campaigns to generate revenue for a specific period.
Four main types of ads are displayed by the app providers for monetization. But, as an app owner, you need to keep an eye on whether the targeted users find these ads entertaining or are skipping them.
Interstitial ads:
In this type, the app advertisement displays full-screen pop-ups at specific time frames. Users can end this ad by a close button in the upper left or right corner.
For example, an ad can be displayed when a user finishes a level in a game.
Lokicraft, a great example of a money-making game app, uses this type. By utilizing such an ad strategy without any advertising fees, this app has managed to enhance its gameplay.
Banner Ads:
These ads come in different sizes and appear at the top or bottom parts of the app screen. They are not that big and less obstructive, which helps users to use the app freely.
In-app video ads:
These types of ads appear randomly, mainly as reward videos. For example, if a person wants to unlock the next level in a game, they must watch an ad. Or if a game level requires some extra coins you don’t have, you can watch these ads and get coins to reach the next level.
Native Ads:
Native ads are made to appear as a natural component in the app. Mainly, it is manifested to promote a product or a mobile app. Here, affiliate marketing will help user engagement for your app for free.
This strategy is getting more and more famous nowadays because users are less irritated and annoyed with such ads.
However, one thing you need to remember about native ads is that their revenue is lower compared to other methods.
Rewarded Videos:
This is the most powerful advertising strategy when we talk about in-app ad integration. Online users watch them in exchange for points, lives, or virtual goods. Through the incentivized ads model, it is easy to make money; as an advertiser, you can effectively communicate brand messages. This model is similar to in-app video ads but not entirely like it.
The most significant advantage of this ad campaign is high retention rates, as users are rewarded for watching these ads.
Now, every app monetization model has some advantages and disadvantages. As a famous person once said, everything has two sides, nice and bad, so let’s look at the pros and cons of this app monetization strategy.
Pros:
- It increases your app’s primary income through the click-through rate
- Assists in measuring user interaction
- Video ads generate higher traffic than social media networking, web browsing, or audio ads.
Cons:
- It only works with apps having lots of users
- Low-quality ads easily get ignored by users
- Causes an interruption
Subscriptions Pave The Way For New Revenue Streams
A subscription is also one of the most efficient ways to monetize apps. If you don’t feel like using ads to monetize your apps, then using subscriptions is best.
Some of the most downloaded apps use the subscription method to monetize their apps. Hulu and Spotify are among them. App publishers can decide to offer free content in their apps for a limited amount of time and then charge users a subscription fee that will allow them to access full content without any restrictions.
Modern apps use a trial method at first and then give full access to the app to those interested in it for a fee. This type of monetization is used primarily in audio-video streaming services, online news, and cloud services.
To put less burden on integrating this revenue model, Apple is giving extra attention and making significant changes in how app subscription systems work. In the current model, Apple will maintain its recent 70 by 30 revenue split for the first subscription year. After a year, the new 85 by 15 revenue split will automatically be implemented.
This latest format was made to push app publishers to let go of their apps for a repetitive fee instead of a one-time cost. But despite this, only 5pc of the successful apps are using a subscription revenue model or developing subscription-based mobile apps, according to Sweet Pricing.
Pros:
- An apt model for cloud services that provide audio and video content providers like Spotify.
- More reliable income
- The app gets rewarded by the Apple store
Cons
- Change from a one-time fee to monthly charges can upset customers
- The free trial period may include tweaking
- Small business owners would not be able to pay
Selling Merchandise Can Make You Rich!
Many e-commerce businesses build free versions to sell physical goods such as toys, shirts, shoes, etc. These physical products can be sold directly to the app or via email marketing. Selling merchandise in your free mobile apps is a very unique way of getting rich for free apps.
To push app publishers to use this model, Amazon has started a thing called Merch by Amazon that allows publishers to showcase their creativity and make their artwork, upload it to their platform, and promote their products. It is a win-win strategy for the owners and app users.
Furthermore, Amazon even takes care of payments and delivery.
Sponsorships Lead To Strong Partnerships
Sponsorship is one of the less-used monetization methods. Nevertheless, it is fascinating. Suppose the app creator builds the right niche app for a specific targeted audience and launches it on behalf of another company. Like websites, app publishers need to find sponsors whose target audience is the same as the one the app addresses. Before creating the app, list brands and organizations that could benefit from the partnership.
Are you aware of the Weather Channel App? It has a sponsorship by The Home Depot, an American multinational retail corporation. They have professionally advertised their weatherproofing homes campaign behind the temperature measurement in the app in the animated background. This is an excellent example of earning through sponsorship.
Pros:
- Includes offering advertising space within your app to brands with exclusive content or discounts.
- Brands can make their presence in the app, and users can make use of discounts
- Minimal disruptions to user experience
Cons
- A powerful brand is needed with sophisticated data and users
- Tools will be required to measure success
- If you work with the wrong people, it may affect your ROI
In-App Purchases To Keep The Cash Flowing
In-app purchases are one of the most widely used and best app monetization methods. The specific contents included in it are special features, such as powerups, additional features, and restrictive levels. The purchase is made directly from the app and is a simple process. If we talk about in-app purchases in layman’s language, it is something similar to selling virtual items directly from the app. Nearly all games that require an internet connection have in-app purchases—for example, Clash of Clans, Angry Birds, etc. Forbes magazine says that apps with in-app purchases generate the highest revenue. Forbes also expects this to increase in the future.
Usually, this model is used by game creators primarily because of digital money. As a matter of fact, half of the games provide more than one game currency, such as gems, coins, and gold. Such in-app purchases play a significant role in app downloads.
This is an exciting model for converting non-paying app users into paying users without being too intrusive. Although, you’ve to keep users busy on your free mobile apps so that they keep paying.
Pros:
- An excellent option to get high profits
- Best for gaming apps as they offer different items such as gems, gold, coins
- Key to providing advanced services through an app
- Credit details are saved securely for in-app purchases
Cons:
- The implementations need to be done perfectly. Otherwise, it may lead to bad reviews and frustrated users.
- Users expect high things when dealing with in-app purchases
- Developing costs will be high because advanced features and functionalities will have to be designed
Affiliate or Referral Marketing For A Lucrative Side Hustle
Referral marketing includes the promotion of a third-party product or service as a way to optimize revenue opportunities. Affiliate marketing mainly comprises getting paid from third-party ad networks. App publishers can offer free content in their apps for a limited amount of time and then charge users a subscription fee that will allow them to access full content without any restrictions.
The types of referral marketing strategies differ in that publishers use them in their development. These are:
Cost per acquisition or Cost per action (CPA):
There is no single affiliate network. There are many from which you can choose from for your free mobile app. The contents of this model are that you can either advertise products with pop-ups, promote other apps, or promote apps through an in-app store and earn money.
Cost per click (CPC):
Cost per click depends on the number of clicks on an ad displayed. Adfonic, or Google’s AdMob, is a famous network that you can join for this model. Both display and text ads are available through which you can earn money.
Cost per view (CPV):
As the name suggests, cost per view depends on the number of times a video is seen or the number of times an ad is clicked. A mobile game development organization named BrightHouse successfully increased its app earnings by a whopping 130pc through cost-per-view networks.
Interstitial and video ads were used in their phone game to create natural pauses between game sessions.
Cost per install (CPI):
This model is a new marketing mechanism and is the mobile equivalent of CPA (cost per acquisition) in the web marketing world.
As the name suggests here also, the number of installs depicts the amount you will be paid.
There are many platforms that allow the software to install into your app. Chartboost and Playhaven are the best examples of this model. They are both third-party networks that let you install software into your app.
Pros:
- The customers referred are both loyal and profitable in the long-term
- Most trusted model for apps
Cons:
- It consumes a lot of time
- No multiple referral programs
- Tracking is a sophisticated process
Money In Exchange For Data
Apps use a lot of user data in terms of user behavior or other app usage. All this data is very useful to researchers in specific fields. There are two ways you can benefit from this thing. Sell the data to researchers and third parties, or keep it for yourself.
In simple words, app publishers can sell the data of the users to researchers and make good easy money. Email addresses, social media accounts, and personal preferences are usually sold to the researchers. The data generally contains users’ email addresses, social media accounts, and personal preferences.
Pros:
- Consumer segmentation is easy, and the buying process is feasible
- A genuine monetization app model
- Suitable in listening to consumer voices and making them available to apt companies
Cons:
- Disclosure of data
- Accountability with consumers is tough to maintain
- Customer data security is hard to govern
Physical Purchases
There has been a rise in many eCommerce businesses and startups that have started using free applications for selling their products or physical goods like mobile cases, t-shirts, toys, etc., via developed apps on the app store. This means that the company has created its own app to sell its products and merchandise.
Pros:
- The lowest amount of risk with comfortable profits
- It can also be adapted to include affiliate programs and partnerships that drive referral revenue
Cons:
- Difficult to predict the response of people and the income
- The app store listing page will have to be more transparent for apps if physical appearance is included
Transaction Fees
Those platforms, where digital transactions take place regularly, are a good source of app monetization. Let’s imagine your app has a feature for third parties to sell their products. You can earn a commission for every product sold and eventually have lots of revenue.
- In disguise, income generation
- Includes cashless transactions
- User credibility is not harmed
Crowdfunding
This new method allows companies and startups to share their ideas on sites like Fundable, Indiegogo, Crowd Supply, etc.
Pros:
Cheap money access and more accessible investor relations
Cons:
The campaign might fail in the end and takes a lot of time
Freemium Upsell Opportunities
Freemium Upsell means that the apps are available for download free of cost but contain paid or premium features. This model is similar to in-app purchases.
The Bottom Line
With apps nearly for everything these days, there surely is something beneficial and effective in them. But the owners of the app also need something to be able to run the app smoothly. That is where ads and the other stuff mentioned above come into play. If you want to earn a fortune with free apps in 2023, that is possible. All you have to do is do some research and find the appropriate monetization method. This method can be advertisements, in-app purchases, or even crowdfunding.
Have you ever played free games such as Lokicraft? Try downloading it, and you’ll quickly understand the concept of in-app purchases. If you want to understand the other models, then download a few free games like Free Fire, in which you can buy fancy costumes and new gear. The latest guns can also be purchased in the game, but the point is to familiarize you with the monetization methods, especially in 2023.
