These days almost all businesses, whether small or big, have their own app. They have become a necessity for the marketing strategy to earn more revenue. There are several reasons why companies are choosing to hire app developers to make the best apps available on various platforms. This has shown guaranteed results that have been backed by studies conducted around the world.
In this article, we will learn about the various ways you can make revenue out of free apps and also ways that can earn you profits based on custom mobile app development. So without further ado, let us get into it.
We all know that no one prefers to invest in every other app they install. In that case, the mobile will only be a luxury that some can afford. But then the question arises as to how free apps are able to function without charging the customers any sum of money. This question can be tricky to answer without understanding specific stats. Let us have a look at them.
In the various surveys conducted in the year 2022, almost 98% of the apps launched on the play store were free while the other 0.4% were rated under the paid category. This is enough to prove that the entire industry is based on free app development. Most of the customers that use these apps realize that most of the services that they require are not worth paying lump sum amounts of money for. While the other is commercial or business models whose main source of income is through the services they offer. If they start out with a pay model, they might lose more than 80% of their clients and will have to depend on organic leads. This can lead to severe loss ratings and the collapse of that online business progressively.
Market Analysis of Free App Strategy
Here are some of the stats of that rating that was converted recently to help determine how effective this strategy is. The list below gives an indication of the same. It is as follows:
Amazon stats have shown that 81% of the apps that are launched on the website in the past years are free to use and the other 18% charge a specific amount for the services that they offer to their clients. Yes, most of these free apps do have a premium subscription but the free apps are the ones that attract more attention.
TechCrunch has conducted various surveys that prove that in the year 2020 alone, the world saw a download of over 210 billion apps that were launched by various app development companies. These numbers went up to 250 billion in the year 2022, which makes up to a 25% increase in the installation rate through various platforms and user preferences.
The year 2021 saw a revenue of 6 billion in the investment of premium subscription that was offered by various business models. These were based on various app platforms for android users. Just Google Play store alone helped customers to download 2.4 billion apps for various requirements from eCommerce to investment apps available on the platform.
How Mobile Apps Help Boost Your Sales?
Before proceeding with how you can make money with free apps, let us begin by understanding why you should have an app in general. Before realizing the importance of an app, you will not be able to make a firm decision. The list below gives the advantages. It is as follows:
Increase Loyal Customer Base
In this world of high competitiveness, apps can help to increase the curated customer base that is exclusively interested in your products and services. But you might ask, why can't you just invest in a website then? Well, websites do not provide the right personalized attention that the customer might need in some cases. Apps help you gain more control over your customers and increase the profit rates that you earn. By approaching the right app development companies, you can also hype up any new products that you are willing to launch for your business model. It has proven to increase the service adoption rate too.
They offer the right communication between the business and the client. This can either be one-way or two-way depending upon the query or the necessity of the client. People hire app developers usually to increase the rate of customer satisfaction at a cheaper cost percentage. With the right customer base, you can help analyze the market better. This can help you realize whether the product that you will be launching will be worth the hype or not. Apart from this, through the right app development approach you can also determine what your customers like or dislike and help make products that will get sold out easily. This is one of the few advantages.
Better Marketing Strategies
The most important success pillar of any business model is marketing. If you choose to design an unexceptional product but fail to market it in the best way possible, it is nearly a flop. You cannot always depend on organic customers to come to save your day. In this world of high preferences, the greater number of choices digitization, you need to provide your customers with the best services that you have got under your sleeve. Otherwise, getting profits based on would be zero. One of the most powerful tools that are available in the market is the internet.
You can use the power of the internet to your advantage and approach the right mobile app development company to come up with the best solutions for your business and take it a step further. These days some of the top small businesses are earning money based completely on online ads and marketing campaigns. The promotions or strategies that you apply should be well researched targeting only a specific niche of clients who will be willing to buy such a product. App developers are also coming up with new functions that have the ability to increase the click-to-redirect ratio of the ads which can generate more traffic.
High Convenience Rate
One of the top reasons that can motivate your customer base to choose to order a service or product through your app is that they do not need to go out and search for it. They can call the servicemen or choose to shop online from the convenience of their homes. This has proven to be a huge success for clients that have various health issues and find it difficult to start out of their house on regular bases. Plus, the demand for doing everything online has increased since the pandemic. This is why businesses are rapidly looking forward to hiring app developers.
How To Make Money Through Free Apps?
Now that we know the importance of apps, let us finally come back to the original question that has been troubling your mind so furiously. Indeed this question is right. But nothing is free. These apps have a lot of ways through which they earn money. The apps are designed in such a way by the mobile app development companies in such a way that they are able to create a funnel to get the clients hooked. The list of revenue methods is as follows:
Through Advertising
This is one of the most common methods of earning revenue. It can either be through third-party ad networking campaigns that are run online. Statista has proven through its recent survey that the estimated revenue of advertising on apps tends to reach the figure of 410 billion by the end of the year 2024. The app development companies need to make sure that the ads are displayed during the run time of the apps. The most common example of earning money through apps is Youtube. You need to watch a full ad before seeing an official video. Plus, this has been considered the best way to pitch any product online as it helps to create more traffic and hence increase the sales of that company. The types of ads run on these apps are click or hit apps which means that the user is redirected to the advertiser's website every time they click on this app. You can charge your customer depending upon the duration of the app and the number of times it gets displayed just like it would on television. These ads can also be charged for campaigns that can run for a particular period of time.
Offering a Variety of Ad Display Methods
There are numerous ways in which you can display the ads that can help to advertise the product of your client. The ways that are included should be selected in such a manner that they have the maximum impact. The benefits of in-app ads are numerous, some of which include adding the correct source through the conversion rate, having a high reach-out probability, measuring the rate of interaction of the clients, and generating more traffic. The list below gives the various ways. It is as follows:
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Interstitial Ads
These are the type of ads that take up the entire screen of the user. This helps to get the full attention of the client to the product that is being marketed. This is usually a pop-up ad and does not have a set time. The user can cross it out according to his or her needs. The navigation button is located in the top corner of the ad. A common example of this would be any photo editing app that chooses to display such an app before allowing access to any particular feature. It is an extremely effective approach.
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Banner Ads
As the name suggests, these types of ads appear as a banner on the tip of the apps. These are most common in music apps where there is no necessity of touching the screen for a longer period of time. As the attention span of customers, these days are extremely short, they are proving to be highly effective.
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In Video Apps
As the name suggests, these apps run between a particular video that is being played. It is common on OTT sites where there is a larger time investment of the customer. If these ads are too big, the user should be provided with an option to quit the app pop-up and resume the video that is being played. This is the most common way to advertise games online.
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Reward Videos
This method has proven to create the highest traffic for the client. It is the best method for the in-app integration of advertisements. This is one of the best ways to earn money. The ads act like a currency. Every time a user watches an app, he or she can get a reward in return. This helps to get the full attention of the client which makes sure that they at least become aware of the product that is being sold to them.
Subscriptions Available on Apps
This is one of the easiest ways to earn revenue. All you need to do is think about what services you can offer to gain maximum benefit from this. If you do not want your user interface to appear annoying by the constant bombardment of apps and want to retain the aesthetics of the app, you can choose to monetize your app through this method. Some of the highest-earning apps that are using this strategy are Spotify, Clubhouse, Grammarly, and YouTube. They know how effective this category is to get the customers more invested in the app. This also has proven to increase user satisfaction as it helps to cater more personalized attention to the necessities of the client. once, the user pays for the subscription you need to offer them a full range of services without any barred clauses or restrictions. If you do this later, it might affect the goodwill of your company and the customer might choose to unsubscribe from the app itself. The splitting of revenue usually occurs in the ratio of 70:30 for an annual subscription which helps to cover the cost of app development.
Conclusion
None of us prefer to invest in every app that we install. If this would have been the case, then about 70% of online businesses would have been running at a loss. But free apps are one of the top ways to earn money. We all know how important an app is in this time of digitization. It increases the user satisfaction rate by provoking personalized attention.
App development companies are being approached daily in order to meet the requirements of businesses to get more conversion rates and generate more traffic. The best way to do this is through ads. There are different types of ads like banners and reward ads that help to attract the attention of the client and work towards increasing the traffic of that business online.
Another uncommon way is also by increasing the rate of sponsorships where you give credit to the sponsor by promoting their product while your customers are using the app. This can seem a little tacky but the amount of money earned through sponsorships is one of the highest. Since top brands choose to invest in your app, they also make your app look more legitimate and help the customer to trust your services and products faster.
FAQs
1) Are apps effective to earn revenue?
Yes! Apps are the best ways to promote your products or services. This is because they provide personalized services to your clients and this in turn increases the customer satisfaction rate. Apart from this, it also helps you to know your clients better which makes sure that you are able to deliver products that can cater to their needs. This is because it is the best way to earn a loyal customer base in the long run.
2) How can I build a chargeable app?
One of the best ways to do this is by approaching a professional mobile app development company that has prior knowledge and experience in this field. You can discuss your needs and the kind of functionalities that you want to offer to your clients. Make sure that the front end and the back end of the app are well developed so you do not face any run time errors once it has been launched. Keep the functions minimal and offer a string of reasons as to why people should prefer or choose to buy our premium services.
3) Can I advertise on apps?
Yes, in-app advertisement is one of the highest-earning forms of advertisements that provide the best feedback from the campaigns. Hence, they are highly preferable. There are several options available but make sure that you choose the best one for your strategy.
4) Can pop-up ads help generate traffic?
Yes, it has been proven that organic traffic can be generated through click-or-hit pop-up apps that are displayed on video or OTT platforms. They have also increased the revenue of the business in all cases.
5) What method do mobile app development companies suggest?
This depends on the type of app and the service or product that you are willing to advertise. It is best to take the advice of the experienced. Feel free to gain opinions and advice about the product and then choose the right methods.
