Do apps make money per download?
8 minute(s) read
Published on: Jul 12, 2022
Updated on: Jul 12, 2022
When we use free applications and services, this question arises: Where does the income of free applications come from? Undoubtedly, big services like Instagram, Snapchat, and... can't earn from what they offer! For sure, even once this question has arisen in our mind, how are they making money? In the following, we will check together and tell you the source of income of free applications.
Many people who come up with an idea to create an application start thinking about where the income of the free application that I want to publish comes from. Does my app have to be a service or store through which I can earn money? Suppose I want to create an application for editing and creating typography. Do I have to pay for it, or can I publish it for free in markets such as Google Play, App Store, etc. you may ask if you could earn money when someone downloads your app?
Four factors determine free app revenue:
- In-app advertising method
The most popular and widely used way to earn money through applications and games is ads or in-program advertisements. You may have seen ads in applications such as Snapchat or YouTube. In-app ads can also be seen in mobile games. These advertising campaigns run on these services can generate income for the application or game differently. For example, it can be based on clicks (CPC), which is similar to Google ads; this means that the application or game earns money with each user click on the displayed ads and from the person who ran this ad in that service, they get paid for each click. Or it can be based on visits, and for any number of visits that the advertiser wants, advertisements will be shown to users, and an amount will be paid. In this way, free app monetization completely depends on the content and value of the app for users. In addition, if you overdo it in advertising, even though the application is attractive to the user, the profit will be greatly reduced in the long run.
- In-app payment method
Another popular method through which many applications and games make money is in-app payment; In-app purchases are suggestions and offers whose strategies are formulated by digital marketers and game or application developers. You have probably seen cases of in-app payment in games. For example, to get an attractive feature and option, you must buy them, and you cannot get them even with a lot of activity. Even if you can get that feature for free, it will take a lot of time and be much more difficult. To increase the in-app purchase rate of the application or game, you must be able to give tempting offers to the user so that they cannot easily get it without payments. To do this, you will need to study and research a lot, analyze the big competitors with a large market share, proceed similarly to them, and use your creativity. Today, in-app payment is one of the main ways to earn money from free apps and free games.
- Freemium method
The freemium method is very similar to the in-app purchase method, but there are some differences that we will tell you. As we said, in the in-app payment method, you offer an additional feature to the user, who can buy it from you or continue their activity in the same way for free. But in the freemium method, the user's access to one of the main parts and one of the important components of the free game or free application is limited, and the user must purchase it from you to access those parts. This method is more suitable for tools and games that have wide possibilities. This way, practically part of your service is not free for the user, and they have to pay an amount to get full facilities. The freemium method can also be provided as a trial version with a time limit. You provide a trial version with a specific deadline for use, which has fewer features than the paid version. The user first installs the application or game for free and becomes familiar with the features and capabilities within a specified period. Then, the user must purchase a plan for longer use and access to more complete features.
- Subscription method
The subscription method aims to increase the repeat purchase rate and return the customer's purchase. A clear example of this method is movie streaming services such as Netflix. In this way, the user can install the application or game and find the content they want, but to access it, it is not free, and they must buy a subscription.
The subscription method is more established for the general public, and many services also use this method. The important thing about subscription services is that their income is much higher than methods such as in-program advertising (more than three times according to the latest statistics). But its plan and strategy should be made more intelligently. In the subscription method, they can have a higher purchase return rate because the user knows that they have to pay an amount from the beginning of using and gaining access to all sections and contents. Still, there should not be any defects in it in order to be able to compete with competitors.
Here are five ways to make money from your app
You won't get money if someone downloads your app, so we will tell you how you can earn money from your app. Notice that advertising is not among these suggested ways.
1. Put attractive paid features in your application.
This method has become the most popular
strategy for making money from applications
. This strategy is that, at first, you provide limited features of your application to the user so that they can try it before buying it. If satisfied, using in-app payment, the user can purchase the rest of the features provided in the application. In-app payments can be one-time, like buying coins in games, or they can be permanent, like buying a permanent subscription, as we mentioned before. For example, consider a photo editing program. In this program, you can pay to buy a filter pack or permanently remove the application logo from photos. Another example of this model is the stadium application. In this application, you can predict football matches by buying coins and being among the bests of the month.
2. Create two versions: Lite (with limited features and free) and Premium (with full features and paid).
With a premium version, users must pay directly to download the app. Most users are not interested in paying for an app they have never tried. These types of applications must have the following features in order to attract users:
- The reputation of the developer in providing good and cost-effective services.
- Unavailability of free alternative programs.
If users are unfamiliar with your services or find the same services for free, they will not buy your app. If you want to market the premium version of your application, produce a limited version. In the free version, you can use in-app ads.
3. Encourage users to register on your servers to use the features.
This method is for applications whose services are used continuously and daily, such as music, news, or books. Messenger applications and games use this method less because their information is fixed. Applications that use this method, such as Spotify, have provided free features for users, such as listening to music with ads. Free features usually have a time limit.
4. Sell your application code to other companies.
You can sell the app code to them if your app solves a big problem for other companies. White labeling means you make and publish a copy of your program under another company's brand name. This is an effective way to monetize your app without changing the user experience of your app.
5. Introduction of similar applications, in a separate section.
You can receive a fee from the developer of these programs for each click of the users of these programs. For example, suppose you have an application for freelancers. You can introduce applications that are useful for freelancers in a separate section. Apple and Amazon companies both offer this method to application developers.