When launching an app as a business, you need to find an effective way for that app to generate revenue. The most straightforward option is to charge users to download your app from the store. However, with so many free apps out there competing with yours, it’s unlikely you’re going to get many people purchasing your app unless it’s truly unique and life-changing.

Putting your app on the market for free entices more people to try it out. But just how do you make money from a free app? There are a few options, which are listed below.

Advertising

A popular way to make money from an app is to sell advertising space. By allowing other companies to display adverts on your app, you can make money through ad revenue every time someone views or clicks your ad (depending on the advert). 

Most mobile games earn the majority of their revenue through adverts. This includes a mix of standard banner ads and more elaborate ads including video adverts that offer rewards for watching them or even partially playable adverts for other games.

Making money solely through adverts can allow you to provide all of your app’s content for free. Just be wary that you may have to display lots of adverts to make enough revenue – if you provide too many aggressive adverts, it could annoy some users and put them off. 

In-app purchases

In-app purchases are small extras that can be bought through your app. Users can still download your app for free, but may have to pay for certain extra features.

Mobile games regularly use in-app purchases for things like expanded content, equipment, extra lives or even in-game currency. Users will be happy to make these purchases, providing that you don’t create a pay-to-win situation in which players have no choice but to pay to succeed in the game. 

Subscription payments

Subscription payments are popular for many types of apps ranging from fitness trackers to business productivity tools. Generally, users can still download the app for free, but may have to pay an ongoing subscription to access bonus content or unlock certain perks.

For example, dating app Tinder has several different tiers of subscription service including Tinder Plus and Tinder Gold, which allow perks like unlimited likes and extra content like the Top Picks Feature. Spotify meanwhile has a Spotify Premium service that allows users to listen to music without interruption from ads. 

A subscription payment processing company can help you set up a subscription service. Make sure that not too much of your content is subscriber-only as this may put off many users who feel they’re only getting a sample.

Sponsorships

You can also generate revenue by sponsoring other companies in exchange for money. This could include anything from promoting another company through a social media post to selling your app under another company’s brand.

You’re unlikely to solely support an app through sponsorships alone unless you’re marketing it under their brand, however it’s still an additional form of income worth exploring. This post offers a few app sponsorship ideas for inspiration.