How Do Free Apps Make Money in 2020? [11 Proven Strategies]

5 Most Popular Revenue Models for How Do Free Apps Make Money

1. Advertising

Advertising is probably the most common and easiest to implement when it comes to the free app makes money. And it is also done via a third-party ad network.

According to the latest report and study by Statista, here are the details on mobile advertising spending in the year 2019 and expected in 2020.

The year 2019: 190 billion U.S. dollars
Expected in 2020: 280 billion dollars

You can get paid every 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 ad revenue for a specific period of time.

2. Subscriptions

Subscriptions can be a quite useful monetization strategy. App publishers can choose to offer free content in their apps for a limited amount of time and then charge users for a subscription fee that will allow them to access full content without any restrictions.

The popular and common technique used by the majority of free app publishers is to offer a free trial period and then charge the subscription fee to those who wish to continue to access the app content.

This type of strategy is often used for cloud services, audio and video streaming, and online news services.

3. Selling Merchandise

Another innovative approach is to sell merchandise in your free mobile apps.

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.

To encourage app publishers to use this strategy, Amazon has started a service called Merch by Amazon that allows publishers to create their artwork, upload it to their platform and promote their products. It is a win-win strategy for the owners and app users.

To make things easier, Amazon even takes care of the payments and delivery of items.

4. In-App Purchases

In-app purchases are directly made from within the free mobile apps and are usually quite a simple process. They’re typically used to access special contents or features such as powerups, restrictive levels, or additional features.

In simple words, in-app purchases provide an ability to sell a variety of virtual items directly from the app. The best free game apps like Clash of Clans, Angry Birds, have enhanced their user experience by providing users with in-app purchases.

According to Forbes, apps with in-app purchases generate the highest revenue for their publishers. This monetization strategy is also expected to dominate in the years to come.

5. Sponsorship

Sponsorship is one of the less commonly used monetization methods, but it can be still an interesting strategy.

In simple words, Sponsorship in your mobile applications can be a powerful app monetization strategy if the app publisher builds the right niche app for a targeted audience and launch it on behalf of another company.

Similar to websites, app publishers need to consider sponsors whose target audience is the same as the one being addressed by the app. Before building the app, creating a list of organizations and brands that could benefit from the partnership is a good starting point.

A good example of this how do free apps make money through sponsorship deals is Home Depot sponsorship on the Weather Channel App. the animated app background behind the temperature measurement is the advertisement placed by the sponsor to target homeowners interested in weatherproofing their houses.

— modified on Apr 7, 2020, 5:06:12 PM

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