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6 Monetization Methods For Free Apps in 2018

What monetization methods for free apps work the best in 2018?

The truth is that over 90% of games on App Store or Google Play become “zombie” games. They’re technically alive, but effectively dead.

They have no active users, nobody searches for them, and more important of all — they don’t make money. To avoid the death of your mobile game, the game has to be interesting and fun. But also, it must bring in revenue so you can fuel your further user acquisition.

The mobile app market is huge right now. We’re talking about billions of dollars and even more to come in the next few years. As of 2016, there were more than 2.4 million applications in Google Play Store and 2 million in the App Store, making app stores the most popular distribution platforms in the world.

Free or Paid?

According to TechCrunch, 90% of apps on the market are free. The number of downloads for paid apps are decreasing as we speak. With this being said if you’re going to make an app, invest your time in making a free one.

Also, there is a report by Gartner Research Group, which unveils that users will spend 24% more on in-app purchases rather than paid games. Last year, global revenue from in-app purchases was projected at $37 billion, while paid app downloads only brought in $29 billion.

This research can make you question yourself, how can I bring value to the user if my app is free?

 

freevspaid

Source: GlobalHunt Technologies

 

APP REVENUE STATISTICS

According to Businessofapps, these are the key app revenue statistics:

  • Global mobile app revenue in 2016 – $88 billion
  • Global mobile app revenue forecast for 2020 – $189 billion
  • Global Paid-for mobile app revenues in 2017 – $29 billion
  • Worldwide In-app purchase revenues in 2017 – $37 billion
  • Top Grossing iOS app in 2017 – Pokemon GO (over $2 billion)

6 Monetization Methods For Free Apps

If you’ve decided to invest your time in making a free app, the monetization process is the key to making your app profitable. Choosing the right monetization method will impact the user experience from the beginning.

Here we’re going to list some monetization methods that you can use:

1. Getting Sponsored

Why would a company sponsor a mobile app?  

Every company loves new customers, more engagement, being ahead of the competitors etc..There are 2 types of sponsorship deals: sharing the profits or getting a sponsorship fee on a monthly basis. The biggest challenge for getting sponsored is actually finding a sponsor so make sure your app is fun and exciting.

 

2. In-app Purchases

As we mentioned above, in-app purchase is a monetization method you should focus on since this tactic is currently dominating the industry. Be sure that optimizing in-app purchasing isn’t easy so we’re going to give you some starter tips:

 

PLANNING BEFORE EVERYTHING

This means that you should have a developed monetization method before your app is finished. If you plan your monetization methods before developing your app, you will be able to develop a lot of features and app strategies before you launch.

 

TITLE AND DESCRIPTION

Choosing good titles and descriptions for your in-app purchases could be triggers for your users. By using something catchy or funny, there’s a higher chance your users will buy something.

 

REMOVING ADS?

Everyone likes to download an app for free, but a lot of people uninstall apps because they have a lot of ads. One way of solving this is to offer your users an option of removing ads completely for a small price ($0.99-2.99).

 

OFFERING CONSUMABLES

Consumables like coins or power-ups contribute the most to overall revenue compared to different kind of in-app purchases. This was proven in a study by Flurry where they analyzed data set of over 57 million purchases across iOS and Android.

 

Source: SteamCommunity (PubG screenshot)

 

3. In-app ads

According to Statista, programmatic advertising will double from 18 billion in 2016 to 36 billion in 2019, it accounts for 75% of all digital advertising expenditures in the United States. Globally, Emarketer says that companies spent $101 billion on buying media in mobile apps in 2017. This number will get bigger as the time passes by. 

Many apps feature interactive ads that advertisers can choose to display. During the in-app experience users are more likely to interact with highly targeted ads since marketers know their ideal audience. According to Medialets, the click-through rates for apps is 0.58 percent whereas mobile Web only has a 0.23 percent CTR.

There are also many ways you can place in-app ads so we’re going to list a few:

 

MOBILE AD FORMATS

  • Interstitial – The Full-screen ad that covers the interface
  • Video ads – They’re mostly used for consumables in the game, for example, you’ll watch a 30-second video in exchange for 100 of the in-game currency
  • Banner ads – Ad that is placed inside app’s interface, a classic static or animated ad
  • OfferWall Ads – Offer wall is a page that appears within your app that offers users rewards or different incentives in exchange for spending money

Source: ToroGrowth

4. Data collection & selling

Loads of information is gathered by developers of mobile applications. This is done in terms of other app usages or user behaviour. By gathering this information, you’re able to sell behaviour data to researchers or for-profit organizations in various areas. Usually, the data includes users e-mail addresses, social media accounts and their personal choices.

Of course, users must be aware that their data will be shared or sold, otherwise – it’s illegal.

5. Subscriptions

To create a strong revenue stream, subscriptions can be your monetization method, based on the application type. If your users are paying each month, there is an obligation of giving them new content consistently. For example, you might use a Tinder subscription if you want to match with people in different cities, have some extra features etc…

 

Offering your subscription for 6 or 12 months?

YES! Many applications encourage users to subscribe for a longer period of time in exchange for a discount. It’s a win-win situation since users who are able to commit get a discount, while app developers are able to make revenue projections.

 

Subscribed Audience Value

Your most valuable audience will choose the subscription model since they need to get their money’s worth. Let’s say you buy a subscription for Google Play Music for a month. You’re going to use the app every day and download as much content as you can!

 

Should you offer free trials?

Most definitely. Letting your users try something before they buy builds trust. If they don’t cancel the subscription, they are automatically renewing!

Game Business - Monetization Methods

Source: Globaldatinginsights

 

6. Crowdfunding

One of the monetization methods which is definitely getting more popular is crowdfunding. App developers are presenting their ideas on IndieGoGo, Kickstarter or CrowdFunder seeking donations.

According to Mobile Growth Stack non-gaming apps are more likely to be crowdfunded.

In 2017, there have been 138 non-gaming apps that raised between $10.000 – $100.000 compared to 29 mobile games that got their funding.

However, there are examples like the mobile game GODUS, which currently has 5 million downloads on Google Play Store. It’s Kickstarter campaign reached a funding of £526,563, while their goal was  £450,000.

Game Business - Monetization Methods

Source: Crowdfunding.com

 

In conclusion, making money out of free mobile apps is far from easy. But to prevent your game from becoming a “zombie game” only depends on your monetization methods.

 

Successful game developers know how they’re going to monetize before they even start developing the game. So using one of the models we mentioned or combining a couple of them is something you should follow.

 

So, when you’re done reading the article, you better believe that these monetization methods can really help you out. Put the words into action and see the results coming in.

Otherwise, if you have any questions or something to add, feel free to comment down below or contact me on Facebook.

About The Author

Hi there, my name is Kristian and I'm the editor-in-chief of GameBusiness.net. Over the past 5 years, I've been perfecting my craft in mobile marketing & online media. My other passions are music, guitars, FPS games & tennis. At GameBusiness.net we're covering all you need to know about mobile game business!

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