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Mobile App Monetization Techniques, Because That Is The Future

App Development

Jul 2020
1829 Views 5 Minute Read
mobile app monetization techniques because that is the future
Mobile apps have had a substantial number of downloads in 2020 after the pandemic outbreak. With the increasing number of installs, there is no doubt that the free apps market has surpassed the paid app ones, in profits figures, and installs both. The mobile app market is not going to go down anytime soon; it is just going to escalate. Despite the paid app market ratio decreasing from 75.9% to 37.8%, the mobile app development market is still billions worth.
But yet the question remains how do these apps make money when they offer free services?
The experts had forecasted that the number of global app revenue would double between 2016-2020. However, if you think that despite the fall in the paid app market and the rise of the free app market, the app development companies are not making profits, then you should definitely read this article. According to Google Play, 98% earning comes from the free apps market, globally. So now, all you need is to have a clear idea of app monetization strategy.
According to Techcrunch, 90% of apps in the market are not unpaid. In fact, the revenues procured from installs of paid ones will decline in the coming years.
According to Gartner Research Group, the users will spend 24% more on in-app purchases than on paid ones. This indicates that once the user knows how the app works and what it has to offer, they are willing to spend money on it rather than before.
If you are a mobile app developer and are wondering how to make money on free apps, this article is for you to read.
App Monetization Techniques
Statista reports that top app developers use the following popular techniques that helped them earn. That includes;
Advertising (31%)
Contract work (23%)
Pay per download (20%)
Consumable in-app purchases (16%)
Subscriptions (14%)
Non-consumable in-app purchases (12%)
Indirectly (10%)
Selling services to developers (6%)
E-commerce sales (physical products) (5%)
Licensing fees for royalties (5%)
E-commerce sales (digital products) (5%)
Affiliate programs (4%)
Not interested in revenues (21%)
Statista studies show that by the end of 2019, Android earned 3.8% in paid apps and 96.2% in free apps, and iOS earned 9.2% in paid ones and 90.8% in free ones.
Let us explore a few app monetization techniques in-depth to know about how free apps earn.
When it comes to creating free apps, advertising remains the most common and convenient way of doing it. A third-party ad network also does it.
Statista reports show us figures in 2019 & 2020 mobile advertising spendings. In 2019, 190 billion USD got spent, and in 2020, 280 billion USD.
Using this technique is not difficult at all. An app developer just needs to display commercial ads in the mobile app or go for affiliate marketing to get paid from the third-party network.
As an app developer, you get paid every time a user installs the app and views the ad. As a free app maker, you can also generate revenue for a particular time frame of running ad campaigns.
The following are the four displays of ad the app developers can use.
Interstitial ads:
This type of ad pops up on a full screen, and the user can close the add just by the close button at the top left or right side. Gaana uses the same technique.
Banner ads:
Such ads get shown in different sizes on the screen and at the top or bottom. They do not bother the user much, and they can continue to use the app freely. 
In-app video ads:
These ads usually have something to offer in exchange for viewing the advertisement like reward points. Using such ads can get you app coins to unlock the level or continue using the app. The best example is Ludo King, where you can view the ad and earn some coins.
Native ads:
These ads appear as a natural component in the app. Mostly, it gets exhibited to promote a product or a mobile app. Thus affiliate marketing can help engage the user for free. 
This method is becoming more well-known nowadays, because it is causing less irritation and frustration amongst users. However, native ads are a low revenue earning stream compared to other methods.
This is a useful one to make money for your app. App developers India can offer free content to users for the time being like a trial period, and later can charge users a subscription fee to continue further without any restrictions.
This service is provided by cloud services, music and video streaming, and online news apps or blogs. For example, Netflix, Spotify, Amazon Prime videos, Medium, and many more.
In-App Purchases
These purchases are made within the mobile apps and are very convenient too. They are used to access a few features of the app like a basic version, and to access more features; you need to switch to a pro version. According to Forbes, in-app purchases create the highest-earning for app developers. There are many such dating apps like Bumble, Dil Mil, and others who offer users a few services after they need to switch to a premium version.
Despite being less used, it is still an exciting way to make money.
Using a sponsorship method for mobile apps can be very useful if an app developer creates the right niche for a targeted audience and introduces it on behalf of another company.
The app developer needs to make a list of the organizations that could benefit from an affiliation. And thus create an app that addresses the same audience as that of the organizations.
Referral Marketing
referral marketing
This type of marketing involves promoting third-party goods or services as a way to enhance revenue opportunities. 
Top app developers can make revenues by selling or promoting affiliates’ goods or services based on the number of installs or clicks. 
There are different methods for referral marketing used by developers.
Cost per action (CPA)
In this method, you can promote other apps, market the products with pop-ups, or encourage apps through an in-app store and make money.
Cost per click (CPC)
This type of model earns you money based on the number of clicks per ad viewed.
Cost per view (CPV)
This method makes you money on the basis of the number of ads or video views.
Cost per install (CPI)
This method involved earning revenues based on every install of the advertised app on your free app. 
There is a list of ways to generate revenues for your free apps, but you must keep in mind the advantages and limitations of these methods. As a mobile app development agency, you must consider your target audience and your app structure before deciding your monetization technique. There are a plethora of ways of generating money from free apps, and you must learn them as well because the future of mobile app development depends on the free app market.
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Harnil Oza is the CEO & Founder of Hyperlink InfoSystem. With a passion for technology and an immaculate drive for entrepreneurship, Harnil has propelled Hyperlink InfoSystem to become a global pioneer in the world of innovative IT solutions. His exceptional leadership has inspired a multiverse of tech enthusiasts and also enabled thriving business expansion. His vision has helped the company achieve widespread respect for its remarkable track record of delivering beautifully constructed mobile apps, websites, and other products using every emerging technology. Outside his duties at Hyperlink InfoSystem, Harnil has earned a reputation for his conceptual leadership and initiatives in the tech industry. He is driven to impart expertise and insights to the forthcoming cohort of tech innovators. Harnil continues to champion growth, quality, and client satisfaction by fostering innovation and collaboration.

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