If you want to make money by making an app or mobile game, or if you already have a free offering that you want to make money off of, you can find helpful tips here.
About 97% of apps on Google Play and 94.2% on Apple’s App Store were free to download as of November 2022. For years, free apps have been more popular than paid apps on both platforms. Nearly 82% of the money made on the Amazon Appstore also came from free Android apps. There are better ways to make money with apps than by charging people upfront to download them.
How do developers and publishers make money off of free mobile apps?
In this post, we’ll talk about how you can make money from free mobile apps if you have an idea for a new product or want to make more money from an app you already have, read on to find out how to make the most money from it.
There are 13 ways to make money with free mobile apps.
Table of Contents
In-app advertising is the most common way for people worldwide to make money from mobile apps.
Most common ways for mobile apps to make money
It’s not only an excellent way to make money, but it’s also the easiest. To make money from free apps, all mobile app developers have to do is put ads in them and get paid by a third-party ad network.
There are six different kinds of mobile advertising:
1. Banners
Usually, banners and other display ads of different sizes are shown at the top or bottom of the screen. Users can still use the app even if a flag is on the screen, but banners are still annoying. Also, their low click-through rates are a big problem because publishers get paid every time a consumer clicks on an ad.
2. Ads in between shows
These full-screen ads with pictures, videos, or text are shown occasionally, and you can close them by tapping the cross button or going to the advertised page. Interstitial ads usually show up when there is a natural break in messaging, news, or content or when a user opens or closes an app. In gaming apps, they show up before or after a feature or piece of content that you expect to see, like when you change game levels or between game sessions.
3. Native ads
Native ads blend in so well with an app’s experience that users hardly notice they are ads. Sponsored lenses and branded filters on Snapchat are great examples, but most native ads appear as sponsored content or videos in threads. They may target users based on what they’ve done, their interests, where they are, and other information. They may also match up with the user’s favourite kinds of content.
Native ads are among the most effective because they don’t bother or bother users as much as other types.
4. Offerwall or paid ads
This method rewards users for things they do in the app, like interacting with ads, filling out a sponsored survey, or sharing content. In exchange, users may get in-app currency or be able to access more features. The strategy encourages people to use and stay with an app, and most people who interact with these ads pay attention to the brand behind it.
Tapjoy, the leader in this field, says that offer walls are used by about 15% of the top 100 apps and 25% of the top 100 mobile games.
5. Video ads in apps and in-stream
Short video ads play automatically during breaks in the app’s normal flow or when the user wants them to. In the second case, the so-called rewarded video plays in exchange for something in the app, like extra points in a game, bonuses, different lives, or additional features.
Playable ads and rewarded videos make it more fun for people to see advertisements. A 2021 survey of global app publishers found that video ads are the most common way for apps to make money. 82% of the app publishers who answered used video ads, while 76% of the app publishers who didn’t make games did. Because rewarded videos are suitable for advertisers and users, they may be the most profitable type of ad.
6. Ads that pop up on your phone
If a user signs up for special offers or news in the app, it will send them ads even when the app is closed on their phone, tablet, or desktop. If the user clicks on the advertisement in the middle of their home screen, the app takes them to the advertising offer.
Apple App Store only lets an app send notifications for promotions or direct marketing if the user gives their permission and can choose to stop getting these messages in your app. The user must usually decide whether to get in-app push marketing while installing the app.
With this tool, app publishers and advertisers can reach out to their subscribers at any time and from anywhere, and they can send more relevant offers to specific user groups. The click-through rate (CTR) for push notifications is very high.
How much do apps make from each ad? In fact, “per mille,” which means “per thousand” in Latin, is used more often. However, there are other ways to pay in mobile advertising and affiliate marketing:
- CPM (cost-per-impression or cost-per-mille) (cost-per-impression or cost-per-mille). Most of the time, the advertiser pays when the affiliate ad is shown 1,000 times.
- eCPM (effective cost per thousand impressions). It estimates how much money the publisher makes from ads for every 1,000 times an ad is shown.
- CPC (cost-per-click) (cost-per-click). The publisher gets paid based on how often an ad is clicked on, often on a CPM basis.
- CPV (cost-per-view) (cost-per-view). Most of the time, these campaigns are used for video ads. The payment is based on how many people watch the video or do something else with the ad, like click on it. The publisher gets paid more if there are more interactions.
- CPI (cost-per-install) (cost-per-install). This model pays the publisher every time their users install an advertised product.
- CPS (cost-per-sale) (cost-per-sale). After each sale, the publisher who advertised the product gets a fixed commission or a certain percentage of the sale.
How much money an app makes from ads depends on several things:
- the pricing model you chose for your ads
- The location of the audience.
- the foundation (ads displayed in Android apps tend to be cheaper than in iOS apps)
- The product’s popularity depends a lot on the type and quality of the app and how well the publisher markets it.
- Level of user engagement, since users need to use the app often to get enough impressions and clicks on ads.
- How much an affiliate network company charge
7. Money from affiliates and marketing through referrals
This model is related to mobile advertising, and mobile ad networks specialize in finding affiliates for mobile apps. Through ads or “in-app stores,” publishers sell the affiliate’s services and products, primarily apps and games. In exchange, they get a share of the revenue based on how much it costs to do something.
One example of an affiliate marketing program is the Amazon Associates program. App owners choose what they want to promote, add links to the app, and can get up to 10% of sales and programs that meet specific criteria as a commission.
8. Buying from an app
39% of games have in-app purchases, but only 6% of apps that aren’t games do. Still, Tinder, Netflix, YouTube, Tencent Video, and TikTok, the top five non-game apps that made more than $2.5 billion in gross revenue from January 2014 to July 2021, all have in-app purchases or subscriptions. In-app purchases brought in about $61.5 million for Tencent Video and almost $23.7 million for Netflix in just one month, July 2022.
This model needs a payment system that works well together, and the app store handles all transactions. As of July 2022, apps on the App Store and Google Play that sold digital items had to pay a 30% commission.
Publishers can sell a wide range of virtual goods right from their apps:
- Consumable virtual items, like health points, power-ups, extra bonuses, and Virtual currencies, which are sometimes called “coins,” “gems,” or “gold,” are most common in games, but they can also be used in other kinds of apps.
- Non-consumable products are always in use and have no expiration date. Users can pay to have ads blocked, buy stickers and icons, unlock new features or game levels, etc. In an educational app, for example, they might have to pay to get access to more functions or tips. Both iOS and Android phones can use this app to learn.
Subscriptions may be in-app purchases because they cost money to unlock premium features or content, but they are a different way to make money.
9. Subscriptions
The app’s publisher offers a free version with limited content or features or a free trial period. Customers who want to keep using the app or get complete access can pay a fee and sign up for a “premium account.” Depending on your subscription plan, the service or content you want is only available for a limited time.
Recurring user payments are a reliable way to make money and keep customers interested and loyal. But services that depend on subscriptions need many people willing to pay and must offer excellent services or content to keep them interested.
Subscriptions bring in more money for apps that aren’t games than for fun. There are often monthly or annual fees for cloud services, apps that stream video or audio, and digital news sites. Unlimited swipes on dating apps are another example.
10. Freemium upsell
Games and apps that aren’t games come in two versions: light, which has fewer features but is still valid, and complete. The light version, which can be downloaded for free and has only the most essential elements, helps get more users. Users who want to improve their app experience by blocking ads or gaining access to premium features can upgrade by paying once or regularly through an app store.
This money-making method is popular in app categories like wellness, fitness, nutrition, and education. One good example is the app Duolingo.
For freemium apps, subscriptions often become a steady source of income over time. The trick is to find the right features that will make people want to keep using the app but want more than what the free version gives them.
11. The sale of goods and items
Businesses make e-commerce apps for mobile devices to sell things online, like groceries or hotel rooms. But other free apps may also advertise and sell branded goods like toys, t-shirts, phone cases, etc. This method works best for apps with a large number of loyal users.
LINE FRIENDS is an excellent example of how to make money from an app’s fun graphics and the loyalty of millions of fans. With Amazon’s Merch on Demand, people starting can start small. The app owner makes logos or other artwork and sends it to Amazon. Amazon then makes branded merchandise and sets up a product page on Amazon.com for free. The mobile app promotes it, while Amazon handles sales, shipping, and paying the publisher’s royalties.
12. Fees for transactions
App developers can make money by making an app that helps businesses connect with customers. The owner gives companies and people a place to do business or financial dealings in exchange for a small commission.
All online purchases may be subject to service and transaction fees from the owners of apps for booking travel, exercise, online education, or doctor appointments.
13. Being a sponsor
A company with overlapping target audiences can be a sponsor for a mobile app that was made for a specific market niche and has a large number of users. If their interests are the same, the mobile app’s design, ads, and content are changed to match and promote the sponsor’s brand. If app developers do possible research partners ahead of time, they can publish the app on behalf of a company or brand right away.
The partners share the app’s money, or the publisher gets a monthly sponsorship fee. The strategy also helps spread the word about the mobile app and get more people to use it since sponsors usually have a significant online presence, many followers on social media, and many loyal customers.
There are mobile ad networks and tools that can help free apps make money.
Some of the best mobile advertising companies that help developers all over the world make money from free apps are, but are not limited to:
This global ad network has worked with more than 200 GEOs, more than 6,500 advertisers, and more than 3,000 publishers since 2013. AdsCompass has different ad formats that target users by device, GEO, carrier, OS version, etc. It also supports CPC/CPM business models and is excellent for affiliate and performance marketing strategies. It has many ways to work together through its Ad Exchange and Self-Served platforms.
One of the most extensive ad networks is this mobile version of Google’s AdSense. It’s a good choice for beginners because it’s simple and easy to use. Banners, interstitials, videos, rewards, and native ads are all types of ads that can be shown. You can choose whether your ad shows the text, images, video, or interactive media. You can use AI to put ads in the app or pick and place them manually. You can then connect to Google Analytics to see how well your campaign is doing. If you want to communicate with other mobile ad networks, AdMob can also help you.
Services for Amazon Publishers
APS wants to help everyone, from small developers of utility apps to large publishers of business apps. Its SDK gives buyers access to Amazon’s demand, and more buyers compete to put an ad in an app. This helps improve CPMs and bring in more money. Publishers can look through all their vendors in one place through APS’s Connections Marketplace service.
AppLovin was started in 2012, and more than 100K apps trust it now. In particular, its MAX mediation platform is said to have more bidders and networks and the largest real-time bidding exchange. The one-stop solution works on Android, iOS, Unity, AdobeAir, Cordova, React, Unreal, and FireOS, and it supports banner, native, interstitial, and rewarded video ads. Real-time QA and testing tools help you figure out which combinations of ads make the most money.
AdColony has been in business since 2011 and is now a part of Digital Turbine. App developers made it for app developers. It provides flexible and transparent solutions for demand for the brand, a programmatic marketplace, and real-time mediation. Its patented Instant-Play HD video, Aurora HD Interactive video, and other playable technologies that make premium-quality advertising content possible help increase engagement with mobile app ads. Some companies that work with Digital Turbine are HBO, Pandora, Spotify, and Uber.
InMobi was started in India in 2007 as an SMS-based search and monetization business. Since then, it has grown into a mobile advertising platform with customers like Unilever and L’Oreal and 570 million customers in 160+ countries. InMobi works with Android, iOS, and the mobile web. It supports banners, native, video, rich media, and interstitial ads. It offers ad campaigns in CPC and CPI that can target audiences by carrier, time, OS, operator, country, channel, or device. InMobi also provides a platform for working with multiple ad networks.
MobFox
MobFox was started in 2010 and quickly became Europe’s leading mobile ad network by giving publishers and advertisers a one-stop shop for programmatic advertising. The MobFox SDK works with all significant SDK-enabled networks and plugins, such as Unity, Cordova, AdobeAir, and GameMaker, and makes it easy to work with all advertising formats. Customers can choose from pre-made audiences based on geography, carrier, channel, age, gender, lifestyle, relationship status, native language, and education level. They can also make their audiences.
Moburst was started in 2013 in Israel. It began as a mobile-first company but is now the world’s top full-service digital agency. Using cutting-edge technology, the company has helped more than 600 products, including brands like eBay, Google, Pfizer, Samsung, and Uber, with acquisition and app store optimization for iOS and Android platforms. Moburst also makes ads that run inside apps. These include video ads and native ads.
RevX is a mobile ad network was started in 2014, and it uses programmatic advertising driven by data science, artificial intelligence (AI), and new technology. The company has offices all over Asia and works with more than 200 clients.
Smaato was started in 2005 and had 1.3 billion unique users and 1.800 billion ad requests every month. Its powerful, free-to-use ad server gives publishers more control over video, interstitial, banner, interactive, and rewarded ads and helps more people see them. It is said that switching to it will increase sales by about 30%. With the Smaato Publisher Platform, which allows real-time bidding and automatic optimization of demand sources, publishers can find the highest-paying advertisers for their mobile app.
Tapjoy
Tapjoy is the market leader when it comes to offering walls. True to its name, the ad network connects publishers with top advertisers. It gives mobile users virtual currency for interacting with interstitial ads, playable ads, content lock ads, and offer wall ads. This lets people who want to avoid using real money in Android, iOS, and mobile web gaming apps make money from them. Tapjoy’s eCPMs for Android in the US are said to be more than $1,000, and its fully custom, native offer wall deployments bring in up to 30% more revenue than generic alternatives. Tapjoy works with CPC, CPI, and CPM pricing models, and it can report in real-time.
Unity Ads is the most well-known way to make money from a mobile gaming app. It reaches more than 35 million players in 128 countries. The service works with Adobe Air, Corona, Marmalade, other game engines, and iOS and Android. It works with banner, interstitial, video, and augmented reality ads and lets you buy things inside the app. CPM and CPI campaigns can target a specific connection, country, or operating system. You can also set up Unity Ads to work with plugins from SkyRocket, MoPub, or other companies that help connect advertisers and publishers.
Yahoo Puts Out Apps
This part of the Yahoo Developer Network gives mobile app and game developers a flexible platform for serving ads and access to thousands of high-quality Yahoo Gemini advertisers. It’s easy to set up and use, and you can use it to make ads that are video, rewarded, or native. A lightweight SDK makes it easy to integrate with the frameworks of iOS and Android, and Flurry Analytics gives you tools for reporting and management. Publishers can make.
Zoomd was started in 2012, and it helps advertisers and publishers reach their conversion KPIs with a SaaS-based advertising platform that has been patented. Every day, 250 million devices are acquired by a single platform with a 90% global reach through more than 600 integrated media sources, such as TikTok, Facebook, Twitter, and Google Ads.
Which mobile platform should you choose if you want to make an app and make money?
“Both!” will be our answer to this question. But if you need help deciding between iOS and Android app development, some industry insights and trends can still help you make the best choice for your business.
It might depend on what kind of app you have and how you plan to make money from it. For example, a cloud SaaS, video/audio streaming service, or online media could make more money by creating an app for Apple’s App Store.
The top subscription apps on the App Store have always brought in more money from users than the maximum subscription apps on Google Play. For example, in 2021, users spent $13.5 billion on the top subscription apps in the App Store, while they only spent $4.8 billion on the Google Play Store.
If you want to bet on in-app purchases, iOS again is the better choice. People often think Apple customers make more money, spend more time on their phones, and buy more things than Android users. Even if you don’t believe in stereotypes, spending on mobile apps on the Apple App Store is expected to reach $161 billion by 2026. This is compared to $72 billion on the Google Play Store.
Things need to be fixed if you want to rely on in-app advertising. A report from the mobile marketing measurement platform Tenjin showed that Android apps now make more money from ads than iOS apps.
App Tracking Transparency is likely one of the reasons why iOS apps are making less money from ads (ATT). Now, developers have to get permission from users before they can show them personalized ads. Most users choose to leave, which decreases eCPM and total ad revenue.
But Google also changed the rules for the Play Store in July 2022, making it harder to use interstitial ads. This can lead to more changes in how ad revenue is split.
The newest trends in making money from apps
The following trends were found in Appodeal’s Mobile eCPM Report on global in-app ad monetization in Q4 2022:
In the last six months, eCPMs for paid video ads have dropped significantly. How things are going with Android suggests that it will keep going down.
Rewarded video ads seem less stable than interstitial ads. In mature markets like Japan, Australia, the UK, and Canada, their eCPMs on Android and iOS devices have decreased. At the same time, developing countries like Puerto Rico, Russia, Saudi Arabia, and Singapore saw a positive trend in Q3 2022.
Banner ad eCPM on iOS devices has dropped significantly in the last six months in the most developed countries, such as the USA, Canada, Australia, and the UK. The Android market is growing in the same countries, and eCPMs are increasing by up to 20%.
The traditional ratio of how much money games and other apps make could change significantly. For example, five years ago, more than two-thirds of all money spent on the US App Store went to games. Sensor Tower’s Q2 2022 data digest shows that spending on mobile apps that aren’t games has grown twice as fast as spending on games, at a CAGR of 40%, since June 2014. In the United States, iOS users spent more money on non-game apps than on games for the first time in the second quarter of 2022.
In Q2 2022, apps that were not games brought in about $3.4 billion in revenue on the US App Store. Four hundred apps brought in at least $1 million in sales, up from 50 in the second quarter of 2016. At least $10 million was spent by users on 61 apps. In the US, people spent over $50 million on Bumble, Disney+, HBO Max, Hulu, TikTok, Tinder, and YouTube.
The growing use of subscriptions in apps that aren’t games may explain why more money is being spent in the US App Store. These apps’ revenue growth is primarily due to subscriptions, which shows that Apple has created a subscription economy that lets a broader range of apps make big money.
However, this trend still needs to be seen on Google Play in the US. In the second quarter of 2022, people spent $2.3 billion on games, compared to about $1 billion on apps that weren’t games.
Market Research Future’s (MRFR) 2020 In-App Advertising Market Research Report said that the market would grow at a CAGR of 17.32% and be worth about $312.5 billion by the end of 2030.
MRFR predicted that Android would be the market leader because the number of free Android apps with in-app advertising will grow faster over the forecast period. They also think that video ads will be the most popular ones on the market.
Verified Market Research predicted that the in-app advertising market would grow even more: it could be worth nearly $545 billion by 2028 if it grows at a CAGR of 19.96% from 2021 to 2028. They also say that Android apps and interstitial ads will grow the fastest over the next few years.
According to a report by Fortune Business Insights, the mobile advertising market is expected to grow at a CAGR of 23.2%, from $144.08 billion in 2022 to $621.63 billion in 2029. The fastest growth should come from video ads.
Last Tips on How to Make Money from Free Apps
Advertising is likely the most common way for free mobile apps to make money. In the last ten years, spending on mobile advertising has grown by leaps and bounds. It is expected to reach $327.1 billion in 2022, 17.2% more than in 2021. The most recent information says that by 2024, it could get an impressive $400 billion.
You can make much money without hurting the user experience with the proper ad formats and placement choices. It seems like interstitial, video, and rewarded ads are the best ones. Mobile ads only pay well in apps with many users, so a startup might have to wait a while before in-app ads bring in a steady high income.
Most of the top-earning apps make money through a combination of ads and in-app purchases. The best ways to make money from an app are in-app purchases, subscriptions, and freemium upsells. These can be paired with transaction fees, online sales, or sponsorships.
There is no one-size-fits-all solution because every method has its pros and cons. The trick is to develop a combination that works best for your product. But here are some essential tips:
- The plan for making money from your product should fit with its business goals and be helpful to the people you want to reach. You can make it fit their needs only if you know much about the people who might use the product. It’s essential to understand what makes them happy and mad.
- Since only a few users will make you money by clicking on ads or buying things in your app, you need to get as many users as possible to increase your chances. Publishers should put a lot of effort into promoting their apps and bringing new users and constantly work to improve what their apps offer.
- Any way to make money from apps will only work as long as people use them. If ads or in-app purchases make a product less fun, people may stop using it. App developers should choose ways to make money that give users something valuable, like improving the app experience or giving users access to more features and abilities.
- Looking at the market and seeing your competitors’ actions is essential. Please find similar products and learn what they offer, how their UX/UI is designed, and how they make money.
Whether you want to make an attractive, functional, and high-performing mobile app or need help making money from a product you already have, we can help.
