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Best App Monetization Models For Free Apps

July 20, 2015 - Written By Kristijan Lucic

Applications, much like smartphones, have become a really important part of our everyday lives. No matter if you like it or not, we’re surrounded by smartphones and apps which run on top of them on a daily basis. There is a ton of companies all over the world whose business model surrounds only one app and is extremely successful. App development has become a huge business all over the world, and advertising, is actually a huge part of this whole process. You can develop the best performing and designed app in the world, and it might not help you earn from it, because you didn’t market it properly. There are a number of app monetization models you can choose from nowadays, but that being said, let’s take a look at four app monetization strategies you can take advantage of.

1. In-App Advertising

In-app advertisements are extremely popular when it comes to free applications. Developers tend to include an ad banner somewhere in the app in order to earn some cash off of it, though you can always opt for a pop-up ad or whole screen pop-up ad which are not that popular with users due to their level of intrusive. The best way to introduce ads in your application is to find a way to make them less annoying. Consumers really don’t like when ads are constantly popping up within an app and messing with the usage of the app itself, a small banner on the bottom of the display seems to be really popular. This model can be perfect for you if there are no organic opportunities for in-app purchases in your app, and if you can find a way to implement such ads without annoying users.

2. Freemium

Freemium applications are also free, like the ones we’ve talked about in the last paragraph. Unlike the in-app purchasing model, a freemium app lets you use it without ads, but in order to use all of its features, you’ll have to pay the developer. There are a ton of apps which rely on this model, and one of the best examples are various launchers which are available for Android. You can use the app without an issue, but if you’d like to access all of its features (like gestures for example) you’ll have to buy a ‘premium’ version of the app or something to that effect. A word of advice when placing such an app in the app store (no matter which platform are we talking about), make it clear that the app contains in-app purchases. You can do that without a problem (it’s actually required) in stores like the Google Play Store. If you don’t do that and users realize that they have to pay in order to use the app to its fullest, they might lose interest for good. ‘Freemium’ model is best for gaming apps and apps which have tons of features included in them.

3. In-App Purchases

This model is kind of self-explanatory, you can use the app normally, but you have a number of in-app purchases at your disposal. Using this model you can basically turn your app into a mobile storefront by selling a ton of virtual goods in exchange for money. The apps which generate most profit actually tend to use this model, though it takes time to not only implement something like this but to gain enough popularity in order to make users come back and purchase stuff inside an app. This model is most used in gaming apps where developers let users purchase various in-app items, lives, open levels, etc. This is only one example of its implementation though, there are a number of apps in different genres which utilize this model perfectly.

4. Sponsorships

Sponsorships are the least known model on this list and also the newest. What are sponsorships? Well, the developer basically partners up with advertisers which provide users with rewards for completing certain in-app actions. You basically earn money by taking a share of the revenue from redeemed rewards. A well-known app, RunKeeper, is actually a great example of such advertising model. This fitness app motivates its users to track their running activity and offers rewards upon completions of such goals. The rewards actually come from various advertisers and that’s why this model is also called ‘incentivized advertising’. By using this advertising model you can avoid using annoying ads, and actually get users to feel appreciated at the same time. Not every app is able to succeed in this advertising model though, but if you have an app that can, you might want to try these model.