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How Do Free Apps Make Money in 2021?

Over the years, the number of hours spent online has drastically increased. Everyone is racing up to make a strong online presence in the market to acquire a larger share of the online consumers.

Developing apps is one of the exciting ways to attract these internet users. But there are many questions that the app developers are wondering about. What kind of app should they develop – free or paid? Do the free apps fetch revenue?

The answer to this questions is Yes.

Developing free apps is a great idea, and they do generate revenue. The large internet user base gives preference to free apps, and the market is flooding with them.

The only thing you need to know besides developing the app is how to earn from the apps.

Let us first get a clear idea about the free and paid apps. Listed below are some of the differences between them:

Difference Between Free Apps and Paid Apps:

• Visibility

Free apps attract more users than the paid apps, for they are free. Users tend to try these apps before using the paid apps. The visibility of free apps is more than the paid apps.

• Cost

Generally, paid apps are costlier than free apps. This is because they are more complicated and take more time to develop. In addition, the design also takes a lot of time and investment as customer reviews are critical. So, the overall expense is more in creating a paid app.

• Monetization

The free apps have more monetization options as compared to the paid apps. Many revenues and monetization models can be implemented in free apps, whereas the paid apps generally operate monthly and yearly revenue models.

• Customer Expectation

Since paid apps require investment, customers have higher expectations from them. But, on the other hand, users choose to try out the free apps without even reading their reviews.

• Brand Image

Interestingly, free apps are more likely to build a brand image than the paid apps as they are downloaded more. Also, it takes many positive reviews to convince a new user to download the paid app, which is not the case with free apps.

Revenue Models For How Do Free Apps Make Money

The answer to how to earn money from apps lies in its revenue model.

Ways of making money from free apps

1. Advertising

Monetizing the app with advertisements is the most common revenue model for free apps. By choosing affiliate marketing, you can get paid by the third party that wants its advertising to be played on your app.

Again, there are different types of ads. Banner ads are displayed on top and bottom of the screen, Interstitial ads are displayed after some fixed time, and native ads are displayed as part of the app. You can earn for every click of these displayed advertisements and the target product installations.

2. In-app purchases

Free apps can offer in-app purchases in return for some higher-level benefits in the app, such as access to a higher level of the game and booster life to go ahead.

For instance, consumers can purchase virtual items such as coins and life to use the additional features. Such a revenue model enhances the revenue and engagement of the users.

3. Subscriptions

Subscriptions are a very popular revenue model where the free content is available to the users for a limited time, and they need to subscribe to avail the feature further.

Online audio streaming, video streaming, and news services apps ardently use this model to generate revenue.

4. Sponsorship

In this case, the app owner connects with another company or sponsor with a similar product and target audience and develops an app.

The owner develops an app that sells the product/service of the other company and markets them as well. One free app can be used to earn money as well as for promotion.

5. Referral marketing

As the name suggests, you can promote and sell the services/product of a third party where both of you can benefit from a single click.

Free app owners can earn per view, per click, and installation. This monetization has helped many app owners in the past and remains a super hit formulae.

6. Selling Merchandise

In this revenue model, the app owner can sell different merchandise to the customers and earn money.

It can also ask the users to upload their custom designs on the app and make purchases. This model can undoubtedly increase the popularity of the app along with the revenue.

7. Transaction Fee

Taking a step further, free apps can encourage their customers to sell their custom products on the app. In return, the app charges a transaction fee and earns from it.

Again, this is a very effective model as new entrepreneurs arise every day, and there never will be a shortage of customers and revenue.

8. Selling User Data

Free apps can collect user data such as consumer behavior, email addresses, and age and sell them to other companies who need this data for research and preparing reports.

New apps keep seeking this data to prepare content for their target audience. The requirement for such information is never-ending, and free apps can take benefit from this need.

9. Crowdfunding

This method is gaining popularity. If the product owner believes in the product, they can share their ideas on different platforms such as Fundable and Kickstarter.

People who believe in the concept will invest, and a new app can be developed after collecting enough funds to support the development process.

10. Free Trial

The limited free trial period can be very addictive. Free apps can offer a trial period of the app for a limited time and let the user get the hang of all the features. Then, as the trial period ends, you can ask them to pay for the app. This method is very successful, and many content development apps use it.

11. Email Marketing

You can use the email ids shared by the user at free registration for email marketing. You can promote your new products and features through email and provide a call to action to the users to make purchases. Email marketing is an old but effective business model.

How Much Does it Cost to Build an App?

The calculation is really simple. First, you have to estimate the total time/hours required to build the app and then find out the hourly cost of the developer.

Multiply the two quantities, and you have your total cost. An excellent mobile app development agency can help you estimate the total time required for developing an app.

The cost estimation is one of the perquisites that you get with our mobile app development services. We keep all the cost negotiations clear before going ahead with development.

Conclusion

Because of the spike in online activity, developing a free mobile app can be a beneficial decision. First, start monetizing your idea with a free app using one of the mentioned revenue models.

With the right revenue model, the free app can give you revenue, brand recognition, and customer reach, everything that a paid app can fetch you. If you have any query, You can contact us!

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