In light of subscription fatigue, free applications and services are welcome surprises.
Millions of free apps are available on the Google Play Store and App Store, so it’s undisputable that there is a trend showcasing the preference for creating free applications instead of paid ones.
Additionally, developers are well-versed in generating income despite the app’s lack of a price tag. So, how exactly do free applications sustain themselves without insisting on a direct fee?
All About Monetization
Monetization is relevant for any app developer. Essentially, it refers to the collective ways the app generates money.
The most straightforward approach is charging users a price to download and use the app for as long as they like, with no strings attached.
With free apps, there are a few strings attached. Many of them feature notes that the app has in-app purchases, such as options for signing up for subscriptions or boosting gameplay through virtual assets.
In general, free apps rely on the following approaches:
- Ads;
- Subscriptions or tiered subscriptions;
- Freemium;
- Internet sharing;
- In-app purchases for in-game assets or features;
- Sharing user data;
- Crowdfunding.
Ads
Those brief commercial breaks, likely in video format, generate money for app developers.
Ad-based monetization is likely the most common, and you wouldn’t find a user whose experience wouldn’t have been interrupted by a sudden ad.
Ad networks like Google AdMob simplify the integration of ads and assist in tracking their performance.
Of course, earnings from ads differ depending on the number of users and how they interact with these promotions. Your region and main category for ads also make a difference.
Subscriptions
Subscriptions are pretty straightforward. People get to download the app for free but cannot use it until they sign up for a particular plan.
Nearly all subscription-based apps have 7-day or 14-day trials, letting users get familiar with the product before committing.
However, given the number of people going on subscription-cancelling sprees, users might need more convincing to pay for plans.
Freemium
A freemium app offers free and paid versions. You’ll have limited access if you download it, with more advanced features locked behind the subscription door.
The free side of the application should allow users to try the product, but the limitations should convince people to upgrade their accounts.
Depending on the application, it can also offer a 30-day money-back guarantee, making users more comfortable with subscriptions.
Sharing Bandwidth
Another app monetization platform lets developers earn without taking a cent from users.
It works as follows: a free app allows people to unlock features or premium subscriptions by paying for them with their internet bandwidth.
Typically, developers can achieve this through external platforms that offer such services. Of course, monetizing your app in this way does not restrict you from using others.
You can still have subscriptions or in-app purchases. It’s just that you add an alternative way for users to pay for them.
In-app Purchases
This option is most prevalent in free mobile games. You know the drill: a game has an in-app currency, such as diamonds, which you can purchase.
After obtaining diamonds, you can customize your character’s appearance or equip them with better armor.
While mobile apps tend to get away with in-app purchases, PC or console games have a more challenging time.
Many players complain about pay-to-win monetization, which means you cannot adequately progress without buying something.
Sharing User Data
Many apps collect data about you. For instance, that might include details about which ads you respond to.
Of course, it is a more controversial option since many people feel uncomfortable sharing their data (even if it gets anonymized beforehand).
If you go down this path, comply with the necessary regulations and value user consent.
Crowdfunding
Developers can also ask for support from their community. A crowdfunding campaign can focus on a new feature or simply as a means to sustain the app.
Furthermore, many free services accept donations through their official websites. Of course, it might not work long-term, and not all users will be eager to make payments.
Donations are most common for services that don’t use other monetization strategies and are likely related to non-profit efforts.
Conclusion
All in all, free apps offer many revenue opportunities. Developers can integrate ads, support internet bandwidth sharing, offer subscriptions, or focus on in-app purchases.
Whichever option or options are chosen, performing some market research is crucial to realize what your target audience expects.
Then, it will be easier to push users towards expected actions, such as upgrading from a free version to a premium plan.
