What business model for free apps?

Of all the applications downloaded from the Apple and Google stores in 2014, only 10% were paid (study by Statista, 2012). However, developing a mobile application involves certain costs…

How can you monetize free applications to recoup development costs and then generate profit?

Let’s look here at the business model for entirely free applications without in-app purchases – i.e., transactions made inside the application.

Monetizing a mobile application via advertising

While iOS is the platform that generates the most revenue for paid applications, it is through Android that you can generate the highest volume of advertising traffic.

This observation is no surprise, as Android smartphones hold the largest market share.

Numerous monetization possibilities via advertising are available to you, and this diversity of solutions can be found on several levels:

• The various players in the mobile ad network market: AdMob, Amazon Mobile Ads, InMobi, AdColony…
• The variety of advertising formats: banners, native format (where the ad content is integrated into the content offered by the app), interstitials (i.e., covering the entire phone screen), and videos.
• Revenue calculation methods: cost per click (CPC), cost per view (CPV), cost per install (CPI), or cost per thousand (CPM) views or impressions.

Naturally, the more space the advertising slot occupies on your application, the better you will be paid… But the worse the experience perceived by users will be (see our article on UX here).

Indeed, nothing is more intrusive than an interstitial ad or a video that starts while navigating within the application.

How to avoid driving users away?

Ad Gamification

Many games integrate ad viewing into their gameplay process. A concrete case: Angry Birds. When you run out of lives, you have the option to earn another one to continue playing, provided you watch a promotional video.

This is a way to achieve a high viewing rate—and thus a better chance of converting to downloads—with the consent of the players.

Ad Personalization

Choose the advertiser brands that will appear on your application. If it is a music application, displaying brands offering instruments makes perfect sense, whereas displaying a big name from the textile industry makes less…

Monetizing a mobile application via the sale of your databases

Much like a website or a blog, you can consider monetizing your database if it is well-qualified. For example: “classical musicians aged 15 to 30.”

This data can be behavioral (a certain category of users is ready to pay a certain amount for a certain service) or statistical (a certain percentage of classical musicians play a specific instrument), allowing interested companies and brands to analyze them to refine their marketing targeting.

If you would like to implement monetization solutions in your mobile application, do not hesitate to reach out to us via the website of our mobile development agency, based in Paris and Algiers. We will get back to you within 24 hours.