What are the Monetization Strategies for Free Apps

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The mobile app development industry is expanding with every passing year. There are nearly 3.48 million apps in the Google Play and roughly 2.22 million apps in the Apple App store available for the users and are growing continuously. Most of the apps which are offered in the app stores are free.

Many of us simply download an app and start using its features without paying for anything. But developers who offer free apps also have a plan to earn the revenue. According to Statistia, in 2023 mobile apps are projected to generate more than 935 billion dollars in revenues through monetization methods like paid downloads and in-app advertising.

Different Strategies to Monetize Free Apps

The right mobile app monetization model will match your goals with the expectations of your target audience. If you are planning to develop a free mobile app and thinking of the right monetization strategies, then read the points below.

in app advertisements


1. In app advertisements

Mobile advertising is the most popular way for the free app to generate money. The app owners let the advertisers display their ads on the app and get paid for it. Today we see ads everywhere across digital media platforms. The are ways which you can use to charge for the ads – cost per impression, cost per click, cost per view and cost per install.


2. Subscriptions 

Subscription model is mostly used by the audio/video streaming and cloud services such as Netflix, Spotify, Dropbox and news apps like Wall Street journal. Users can download the free apps, they can enjoy the services for a trial period and then choose the subscription plan to continue the use of services. The plan can be on a weekly, monthly and annual basis.

3. Sponsorship

One of the most effective monetization methods is to get a sponsorship. It is mostly suitable for apps who have a huge user base of a specific niche so that you can provide a large audience to the brand. For this I have to find a sponsor that belongs to the same industry. You need to offer space in your app for the brand to display their ads and information. Through this, brands can expand their presence and app owners can generate revenue.

in app purchase


4. In app purchase

This is a great approach for free apps to make money. In this strategy, users who make in-app purchases will be offered with bonuses, purchase points, and virtual currency that users can use to make more purchases in the app. The important thing with this strategy is to understand and target those users who would actually pay for the exclusive services or products. This is mostly seen in the free game apps like PUBG Mobile, Candy Crush etc.

5. Crowdfunding

Crowdfunding is a new method to monetize your app for free. There are platforms like Kickstarter, Indiegogo, Patreon, Crowdfunder, Fundable etc... that developers can use to raise funds. It is mostly popular with the startups and they have been able to effectively raise money through this method.


6. Freemium

In the freemium app approach users can download the app for free and use the basic features of the app but the app will contain some premium features for which the user has to pay. With this model users can get access to the app and if they like the app they can pay for the premium functionalities. With this model, the free app reaches a large number of audiences and increases the app's popularity.

For example, Spotify offers a freemium model. It provides archives of songs with a great user experience in its free version. Users can also get better functionality and experience with the paid version. Spotify has managed 42% conversion with this model.



Before finalising the right app monetization strategy for the app you should consider the merits and drawbacks of all the methods. Consider the business goal, audience preferences, competitors, offerings. Free mobile apps have a major market share in comparison to paid apps and you can also come up with a combined monetization strategy for your app to generate revenue.

Next read - How to increase User Engagement for your Mobile App