How to Monetize your Free App?

How to Monetize your Free App

Consider this: There are 5.5 million mobile apps in the market today together for iOS and Android. From a few thousands in 2008 (when the iPhone was launched) to millions today, the app market has literally exploded. Fuelled by innovations in the smartphone, smartwatch, tablet and other wearables section, the total number of mobile app developers is projected to reach 14 million by 2020.

While the demand for mobile apps is mammoth, the money made in the app industry is equally enormous. According to Statista, in 2016 the aggregate revenue generated from mobile app sales and in-app advertising was $88 billion. By 2020, this number is likely to jump to a whopping $188 billion. This just goes to show that there is a huge monetization landscape in the app industry that is growing by leaps and bounds.

Surprisingly, it is free apps that are responsible for most of that revenue in the app industry. There are several app monetization methods that can add value to your business. In this post, we will talk about how to monetize your free app. According to Google Play, 98 percent of app revenue comes from free apps. There may be a notion that free apps are not as profitable as paid ones, but in reality, there are several ways to monetize free apps. In fact, free apps can help make more money than a paid app. The app market is inundated with success stories of people who created free apps that are raking in hundreds of thousands of dollars a day.

Wondering how to monetize your free app? There are several ways in which free apps can be monetized. Here’s how to monetize your free app:


Including ads in your app is a great way of monetizing your app. This means your app is free for users, but you are utilizing in-app advertising. There are different types of ad revenue: Cost per Thousand Impression (CPM), Cost per Click (CPC) and Cost per Action (CPA) are the common ones. Amongst these, CPM is the most preferred one by free app developers since it does not require the user to click on the advertisement for the developers to earn. The pay is less, but it less interfering on the user experience. Ad networks like AdMobi, Google Ads, InMobi and Conversant are some examples to consider.

Upgrading to App without Ads

While ads are a great source of revenue for apps, some users do not like to be bothered by ads. They are more than happy to get them out of the way. Then you may wonder how to balance the game of having ads to generate revenue as well as to provide ad-free apps to the users. To deal with this, many app developers work on two versions of their app – one that is free, but is ad-enabled, and another that is an upgraded paid version with no ads. In the free version, the revenue will come from ads while in the paid one, the revenue will come from direct sales and downloads, rather than ads.

Email Lists

An email strategy that is tied-in with your app is a great way for more customer engagement. This is mainly because people generally do not change their email addresses all the time, so this one is an easy marketing campaign. According to Wiselytics an email has a lifespan of 12 days as compared to only a few hours for a Facebook post and just over an hour for tweet. The best way to gather email ids is to add an email subscription form to your app. Email is a great way to remind users to come back to your app if they are away for a while or even to bring in new users.

In-app Purchases

In-app purchases are one of the biggest sources of revenue for the app industry accounting for about 47 percent of the total revenue generated from apps worldwide. In-app purchases let your customers interact directly with your product. For a free app, an in-app marketplace is great for business. Your business can decide to provide users with the opportunity to purchase your products directly from the app which will be shipped to them (n case of products). If it’s a business that offers services, users can opt for in-app billing.

Free App Monetization Method -App-Promotions and Partnerships

App Promotions & Partnerships

Several major companies such as Google, Apple and Microsoft have associate programs that are open to app developers. In this, you choose from a wide range of apps to promote. You can take your pick from the hottest apps and promote them in your app to earn easy commissions. You can also look for businesses that have affiliate programs. These offer paid memberships that have superb affiliate programs where you can earn recurring commissions. For this, you will need to look for a partner that has a similar customer base as yours and can add something to the experience of your users.


Most often, app developers will look for investors who can provide funding to build the app and then turn it into a flourishing business. One way to get in touch with investors is to offer them free marketing within your product. In fact, you can even collaborate with another app developer which can be a brilliant way to establish additional funding for your project. If your partner is an established business, they may promote your app to their clients and fanbase which will improve download rates for your app.

Licensing your Code to Other Developers

If you have developed your own code from scratch and it has proved to be successful, there are chances that other brands may approach you and offer to re-skin your app. In this case, you can license your code to other developers and make money without disrupting your users’ experiences. In fact, code-sharing is useful even when you want to move out of the game. If you think your business has received enough value out of your app and you want to move to the next level, you can sell the app as a whole to a buyer who can use your existing framework to create their own app.

SMS Marketing

You can use SMS marketing to send notifications for reminders, app updates, contests, and promotions directly to your users’ text message inboxes. This marketing method is an effective ways to strengthen your brand because it brings your users back to your app.

Mobile Marketing

You can use a wholesome mobile marketing strategy to ensure that your users move further down the funnel, especially if you offer a paid conversion in your app. You can use mobile marketing to induce your users to spend money inside your app with mobile marketing automation. You can encourage them to purchase a product/ service in an e-commerce app or convince them to book a flight, hotel etc in a travel app or you can alert them to buy buyable content, for instance a new album in a music app.

Free App Monetization Method -Video-Advertisement

Video Advertisement

To make the most profit out of an app, you can amalgamate several monetization methods. A common strategy is to offer in-game items in turn for watching a video advertisement. If the video is longer, it means you will earn more. Video advertisements offer to convert at a higher rate than regular text ads which means advertisers are willing to pay more per viewer.

In conclusion, developing a free app can actually lead to superb returns and is a profitable investment. All you need to do is work on a strong marketing strategy before launching. Remember, just because an app is free does not mean it will not provide you with money. As we have seen above, in fact, a free app can actually sometimes provide more lucrative opportunities than offering an app for a solid price.

Now that we have explained how to monetize your free app quickly & smartly, and develop effective strategy before launching, all you need to do is – get started. If app development is something that you have been pondering upon, just get in touch and the QuadLogix team will walk you through the process and assist in identifying the right approach. Book a FREE consultation with our in-house experts to learn more.

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