Free apps have long been the norm, beating out paid by multitudes – gone are the days of the £0.99 app purchase. Their range spans entertainment, commerce, navigation, communication and countless others. Yet despite being (nearly) entirely free, these apps repeatedly report among the highest earning Apps in the AppStore. There are multiple strategies to monetise a free app. Here, we’ll look at the most popular.
The first method is In-App Advertising. In 2017, ads accounted for 55% of mobile publisher’s revenue. For the bigger apps, while it’s not likely to be a main source of income, the amount you can take in is not insignificant. Summoners War, for example, makes around $150,000 per month in ads, at just 0.6% of its total revenue. Advertising in-app allows you to provide a better user experience, with ads scaled to fit the screen rather than being compressed in a mobile browser. They can be tailored to the app and device, creating a much cleaner and more appealing advert. You can use the app to target ads by location, allowing for specific ads to be targeted to specific people and places. Your user is (likely) carrying their phone with them all the time, there will always be a time and place to advertise. These features all contribute to an increased impression and click-through rate, generating more revenue – the consumer will likely be happier with their experience.
“With the right app, you can stand to make a lot of profit – how you monetise it plays very heavily into it.”
Popular mobile games benefit greatly from in-app purchasing. Microtransactions – like buying currency in Candy Crush Saga, or card packs in Hearthstone – offer greater value for money the more you spend. King, the company who makes Candy Crush and others, generated $2 billion from in-game purchases for its parent company, Activision Blizzard. The attraction lies in the convenience: whether you’re paying for more turns, a skip function or a chance at a rare item, you’ll get there quicker by spending money.
A further method is the Freemium model. This involves offering a base product with the main features included, then offering an option to upgrade for ‘Premium’ features. These could include a cleaner UI, access to the complete app or the removal of in-app ads. Some apps choose to employ a subscription model – Spotify Premium allows complete freedom over music choice and the ability to save music to your phone, allowing you to listen both online and offline, whereas the free option you require an internet connection to play music. Netflix’ app only operates if you’re subscribed to their viewing plan.
E-commerce is another area where mobile apps shine. Keeping the apps free allows attention to be drawn to the service they’re providing, and the revenue that it generates. Free Apps like Uber, which made 20 billion in gross revenue in 2016, rely on commerce being channelled through their app. Uber then takes a 20% cut of the cost of the journey. In 2016, Domino’s Pizza recorded a rise of nearly 29% in online sales with a 41% increase being made on their app. David Wild, their chief executive, attributes the app to their overall gain.
With the right app, you can stand to make a lot of profit – how you monetise it plays very heavily into it. With the current market preferences, it’s very tempting to make a free app and stuff it full of ads or microtransactions, but that doesn’t always ensure success. It can help to have a professional opinion – lots of app development companies offer consultations, offering their opinions and expertise on the idea and how best to execute it. Everything from development, to launch, to marketing – development companies (like us!) will be ready, willing and able to offer their services.