In-app ads are unreliable for making revenue as almost 60% clicks on mobile banner ads are ‘by mistake’. Ads are not always the best monetization strategy. In fact, free apps make more revenue if compared with paid apps. 

Once you have prepared a professional looking, and user friendly app which is also Free, you might want to  think about  monetization strategies for that app to generate some revenue.. 

Displaying Ads on an app is  considered as the primary source for Free Apps to generate revenue,  but there are other monetization methods which could actually help you build user base and revenue. 

In this blog post, we will be sharing ‘how do free apps make money without ads’ by highlighting popular ways of doing it. Customer acquisition and a case study would also be discussed. 

Workable monetization strategies for free apps

1-Freemium model, offer free trial version 

Apps based on this model offer free service/features for a certain time so that end-users can experience the true value the app has to offer. This model contradicts in its own definition i.e. ‘free’ and ‘premium’ at the same time. 

How to implement this strategy?

There are several ways of implementing the freemium model. Here the purpose is to cater a wide variety so you can get an idea for your app. 

Limited and paid features – app offers few free features and if the user wants advanced/paid features, he has to pay.

Time-bound – some products can only be used for a limited time for free. There are many software offering 14-30 days free trial before they start charging. 

Number of users/servers – the product or service can be used by a limited number of users. Dropbox is an example here.

Privilege based – loyalty card holders can seek the free service. 

Without ads – In-app ads often irritate users, if the user wants ads free access, it would be paid.

“DO YOU KNOW that  almost 60% clicks on mobile banner ads are ‘by mistake’

Don’ts of freemium model

-Do not over charge for the advanced/ paid features, your user base may not opt for them. 

-Use a combination of monetization strategies if freemium alone is not working.

2-Find sponsors / user influencers from your niche

It is somewhat like running an ad, you often place the sponsor logo on the splash screen, footer, or add sponsored content with offers. 

This model could only work if you find the ‘relevant sponsors and influencers’. Example, you have a fitness app, try looking for fitness trainers, dietitians, etc. 

How can you sell integrated sponsorships?

A mobile app sponsorship offers brands an integrated presence rather than asking for in-app ads. Typically after reaching out to a sponsor, tell them how you will showcase their brand in your app. 

Each time an app is launched a sponsored logo appears, ideally the acceptable positioning. 

3-In-app purchases

Free apps often seek monetization via in-app purchases. Pokemon Go has an in-app game shop from where users can buy premium items using PokeCoins. 

Before opting for in-app purchases do look into the ways where you can improve the user experience. 

How in-app purchases work?

There are different types of in-app purchases.

Unlock level/content/ feature – there are permanent purchases as once you buy them, you do not need to purchase them again. This may include gaming coins, ebooks,  etc.

Subscriptions – in-app subscriptions are used for access to advanced app features. 

In-app purchases don’ts

-Over priced in-app purchases may not help in user conversions.

-Use a combination of monetization strategies if in-app purchases are not working.

4-Crowdfunding

A popular monetization strategy often used by startups and entrepreneurs for raising money. Do you know there are more than 400 crowdfunding platforms. Some of the popular ones are:

1-CircleUp

2-Indiegogo

3-Kickstarter

4-CrowdFunder

5-Crowd Supply

6-Chuffed

7-WeFunder

8-Experiment

9-Patreon

10-Fundable

11-Fundly

12-LendingClub

13-SeedInvest

14-AppsFunder

15-CrowdCube

16-StartSomeGood

17-FundRazr

18-GoGetFunding

19-Ulule

20-EquityNet

21-Classy

22-Seedrs

how do free apps make money without ads

How crowdfunding helps in app monetization?

Crowdfunding websites help you raise more than enough funds to overcome mobile app development and promotion hurdles and gauge the early interest. 

For that matter you have to set a crowdfunding app campaign. Figure out the campaign cost and set realistic crowdfunding goals for the campaign successful launch on the given crowdfunding platforms. 

Promotion, customer acquisition strategies

If nobody knows about your app, no one will download it. You need to promote the app, acquire a customer base before thinking of monetization strategies. 

Do you know 55% of the consumers don’t trust brands from which they buy and 65% consumers don’t trust ads?

This shows it’s hard to earn the trust of the consumers and makes the job of the marketers hard and challenging. 

BONUS TIP

Find sources where your target audience is active and catch their attention. 

1-Pick the right acquisition channel. It would take a lot of experimenting. Set goals, even rough goals can help, test on different channels with your content and compare individual successes. 

2-Video content / marketing is on rise. Your most consumers are visual learners and video is a best way to inform about your brand/ products. You can use influencers for social posting. 

3-Giveaways, offer consumers a chance to experience your products. You can run giveaway campaigns on your social media.

4-Establish thought leadership through content marketing. Start a blog for your business, publish whitepapers. 

Google Maps – case study

Most of the free apps have one revenue stream but when we take Google Maps as a case study, we find that they are getting money from multiple streams. 

Promoted pins, local search ads. 

When you open ‘explore nearby’ in Google Maps you find red colored pins marking nearby businesses. 

Also, promoted pins are ads on Google Maps where you can promote your business which is highly efficient for retail sales. 

how do free apps make money without ads

Local search ads boost your business in Google maps search, improving visibility. 

Google Maps APIs

GM allows businesses to use its API for customized map experiences. Best examples are Uber, TaskRabbit etc. 

Final verdict

Free apps are getting more market share when we compare them with paid apps. However, not all free apps make money simply because they start monetizing before getting to know their right audience. Also, not all monetization strategies are for you, you test and try and see which one suits your needs. 

Coming up with the right monetization strategy for your free app can be challenging. If you need help, we are more than happy to help.