5 top ways a free mobile app can earn money

One of the most important considerations when building an app is its monetization strategy. App development isn’t cheap undertaking and the costs need to be recouped by the investors. The best way to do so is to make sure the app you develop is available to as many users as possible, increasing your monetization chances. Don’t believe me? Just take a look at the ratio of paid apps when compared to those that are free!

It’s clear that opting to make your app downloadable for free will make it more attractive. This gives you more people whom you can provide your app to. But once this is done, how exactly will you be monetizing the app? Well, we have 5 key proven methods which you can use to earn revenue from your free app.

1. In-App purchases

Used by most app makers these days, in-app purchases are essentially a strategy of attracting a user to an app before pitching extra paid services. Earning revenue via this method is rather easy if your app is a game. That’s because players can be encouraged to buy a token in exchange for bonuses. You can do the same with non-game apps by offering an ad-free premium version. Such a strategy can be a sizable revenue generator for all the apps according to Business of Apps (2019).

In-app purchases (50%), paid downloads (50%), and in-app advertising (49%) were the most common actually used app monetisation strategies for non-game apps

For games, only in-app advertising (81%) edged out out in-app purchases (79%)

2. Sponsorships

Done right, sponsorships are a very lucrative method of monetizing your app and can bring a steady stream of income. The trick is to build an app for a niche audience who would be interesting to a potential sponsor. Then, sponsors can model the app with their branding, for a fee. Do, however, remember that such sponsorship opportunities are only good if your app satisfies a niche demographic that is sizable.

3. Advertising

One of the most common and best means to monetize an app is through advertisements. Setting up such advertisements is a relatively easy task as there are many third-party networks to help with this. The type of ads that you can run include, but are not limited to:

  • Banner ads – the most common ad format you might have often come across. Banner ads are pictorial and often found at the top or bottom of a mobile app. Such ads’ goal is to constantly remain in the users’ sight to increase the chances of clicks on the ad. Some banner ads, however, might get blocked by adblockers, thereby throttling your advertising efforts.

  • Native ads – heralded as the answer to adblockers, native ads are ads that are more ingrained to the app and its content. Such ads cannot be blocked and tend to be more appealing and less intrusive than banner ads.

  • In-app video – a fantastic means of getting marketing messages across, videos on average receive more engagement than the typical ads, making it more attractive to advertisers.

  • Interstitials – closely related to pop-ups, these ads are displayed to users during transitions in the app. Such ads are less intrusive and offer decent interaction with the users in your app.

The important thing to remember is that advertising is not the only strategy you should depend on when monetizing your app. That’s because it takes a substantial amount of regular users to create sizable income.

4. Referral Marketing

Referral marketing is a strategy of monetizing a free app by displaying ads of other apps services. The revenue generated depends on several metrics and can be a very good source of income.

  • Cost per view (CPV) – this revenue model is based on the number of views on an ad, whether it be an image or a video.
  • Cost per click (CPC) – a revenue model on which the number of clicks on the ads displayed, decide the revenue generated.
  • Cost per install (CPI) – equivalent to the cost of acquisition (CPA). The CPI is a revenue model based on the number of installs that result from a particular referral ad.

5. E-mail Marketing

As old as it might be, email marketing is still a very powerful method of advertising. Especially when reaching out to customers who are actively interested in your products. To do this, you can collect user emails via pop-ups that offer rewards in exchange. You can also use Facebook SDK that allows users to log in using their Facebook profiles. Once collected, these email addresses can be used to reach out to users. Those messages can inform about updates on new features on your app, offers, and news. Remember that users coming back to app increase your monetization opportunities.

However, remember to make sure that the emails you collect are done with full transparency on how they will be used. Such personal data should be collected and used carefully as failing to do so can have you incurring huge fines. Regulations such as the General Data Protection Policy (GDPR) of Europe, have to be taken into account.


Building an app is a serious financial undertaking, and we understand that recovering these costs is a key consideration. These 5 monetization strategies, can go along the way towards helping you obtain a good return on investment. But only when you pick the right one that is suitable for your app, its users expectations. Remember that you can opt for either one or more strategies concurrently, provided you keep the user experience top of mind.

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