You click on the app store, looking for some good apps that you can download and you’ve found one. But there is one discouraging factor about it: it is a paid app. From the user’s point of view, a free app is best. But from the developer’s point of view, there is one question which can be raised. How will the app developer earn from it? Some of the top grossing apps on the app store like clash of clans, whatsapp, candy crush, etc. are free. In such a scenario, how will the app creator earn profits? Every app developer needs to recoup their expenses, generate profits once the app has been shipped.
Making money from apps is no piece of cake, and when it is a free app, the task tends to be more challenging. Some of the common ways by which a free app earns money are in-app purchases and advertising. But these techniques alone are not sufficient. New and improved ways of app monetization need to be put in to use. For this purpose, a thorough knowledge of the revenue generating options is required. Besides this, the current marketing trends and competition should be researched about. One also needs to be well aware of the audience’s preferences so that they can cater to the paid-user experience in the best possible way.
Here are some techniques you can use to make money from your free app:
1. In-app purchases
A very popular way of making money from free apps is to give them away once and all for free, and then charge for additional purchases made within the app. When a free app offers additional options or features within the app, which are paid, they are known as in-app purchases. In-app purchases are mostly used in gaming apps, where you can unlock levels, buy new players and lives, and in magazine apps where you can offer extra content for the readers. For example, you can buy extra lives in Candy Crush Saga. These purchases can be used as many times as you want. They are unlike consumable items which need to be bought again and again. Wync is a music downloading app, but it requires the user to buy a subscription in the beginning. This is another form of in-app purchases.
It is important to make sure that in-app purchases are easy to use and make sense with the app. They are ideal when they just make sense within the context of user experience.
2. In-app advertising
In-app advertising is a slow, but an effective way of attracting traffic online. In mobile apps, they have different sizes, placements and positions. The revenue hence generated is different from the traditional revenue generating techniques. Ads can pay on the basis of the format it uses, click-thoughts, impressions, the countries it is from, etc.
3. In-app sponsorship
If your app proves to be quite famous and has attracted a niche group of people, it is possible that a partner of yours may wish to sponsor the entire thing to get their message to your audience. For sponsorship, one needs to have contacts, and it is a more effective technique than advertising. For a good share in the voice, a sponsor is expected to pay an amount more than the cost of an individual advertising slot. It is an effective way of making money and you gain brand credibility with audience.
A simpler way of earning money is to offer the users with a light version of the app for free, and then offer a paid version of it, which is better with enhancements. This technique can be combined with a number of ideas. For example, offering an upgraded form of a free app which will be free of advertising for a year.
But typically, the technique of offering a free app with lesser specifications and a paid one with better features has become quite popular. It also saves you from spending money on advertising because this job is done by your free app itself.
5. Bundled deals
This is ideally just a part of the money making process of a free app. Here, the benefit of the free app can be added to a package of services which will be paid for. This means that you create the app, and give it away for free. After this, you charge for the services offered by the app. It may not be appropriate for a gaming or a casual app, but for an app which offers services which will require an internet connection. Hence, the free app will be a revenue generating addition for you altogether.
6. Cost Per Install network
Cost Per Install is a new mechanism for earning profits with a free app. In the web marketing world, it is equivalent to Cost Per Aquisition. It means that with every install, you will earn money. There are advertisements which say “use it now” or “get it now” which come while you are using one of the apps or games on your phone. These advertisements are related to your currently used app. With every install, these apps earn money.
It should be ensured that the app created is focussed on your business goals and the requirements of the users. Your strategy of monetizing the app will be dependent on your purpose of creating the app. In other words, if you wish to boost your business or build its identity, advertising and in-app purchases will not be preferred by you.
Make sure that the strategy you have implemented has proved to be useful for you by keeping record of your data and monitoring it to see that the assumptions made by you are right. Once the strategy proves to be effective, think of new ideas and put them into use. Try and look for a monetization strategy which will prove effective for you and your app users.