koderlabs Blogs
how to make money from mobile apps

Free Mobile Apps: How Can You Gain Profit From Them?

Generating revenue from your mobile app that is available on app market for free, is do-able with the right monetization methods.

As a business you want your mobile application to do great in terms of conversion, popularity, and usage. But the consumers are most likely to gravitate towards an app that is available free of cost.

Combine the two requirements and you get a well-developed mobile app available for free, yet still making money for you. How is this possible?

It is do-able through effective revenue methods available at your disposal.

No business or software development company has the budget to invest time, effort, and money into developing a fully-functional mobile app without extracting some monetary returns from it, or passive income, if you may.

Not convinced? Consider the stats that show that 98% of the worldwide revenue is generated through free apps.

Free app monetization produced $39.7 billion in just the first half of 2019.

“The force is strong with this one.”

Sensotower depicted the high rise of free app downloads in the first half of 2019 – on both Google Play and App Store.

16.4% in Google Play adding up to $4.9 billion. While the App Store fell behind in downloads by 1.4%, it still didn’t hinder its overall revenue – which was nearly 1.8 times more than Google’s.

Worldwide App Downloads of 2019 First Half
Via Sensotower

According to Techcrunch, nearly 90% of the apps are free on the app market – so it is only smart to go that route, with an effective monetization model integrated.

How to make money from free mobile apps?

There are various options available and we have compiled a list for you to choose from.

1. In-App Advertisements

make money from free mobile apps
Via Inscripts

If you are a mobile-gamer or a heavy user of mobile apps, then you are probably familiar with this in-app ads.

These ads are powered through affiliate marketing, where you advertise your affiliates’ products and generate revenue through user clicks.

Of course, there are sub-stypes of in-app ads that are used when choosing the affiliate marketing monetization method.

  • CPC (Cost Per Click) – As the name suggests, you get paid each time a user clicks on the ad.
  • CPV (Cost Per View)- This is specifically for video ads. The times the video ad is watched is directly proportional to the money generated for you. This is why a lot of the video ads take up the whole screen and can only be exited from once the ad is completely played.
  • CPI (Cost Per Install)- At every conversion from the ads in terms of download, generated revenue for you.

Now you have the idea of the types of in-app advertisements. But where can they be placed? Popularly, there are four ways to go about ad-placement.

In-App Display Ad Formats

Gone is the time of annoying ads, driving away users. Now, the in-app advertisement environment is dynamic enough, allowing seamless integration of relevant ads optimizing positive user-experience.

In addition, the ad display position also plays a huge part. These are the following four kinds.

  • Native Ads – Ads that are not obvious. They mesh well with the content of the app itself, making the advertisement a natural extension of the application. These ads are guised as a suggestion or an idea.
in-app ad format
Native Ads- Via Smaato
  • Banner Ads- This format has been in the business the longest. It’s the usual banner style where ads appear in a banner on the top, bottom, or both sides of the application.
ad placement inside mobile app
Banner Ads- Via Smaato
  • Interstitial Ads- These ads take up the entire screen and are pop-ups mostly with a small cross for you to exit from. They are stated as the most engaging in-app display ads.
Interstitial Ads- Via Smaato
  • Medium Rectangle Ads- These ads offer high viewability at a low cost; rectangular in shape.
Medium Rectangular Ads- Via Smaato
  • Rich Media- Most effective as it is a culmination of all types, be it video, text, and audio.

2. In-App Purchases

Another top monetization strategy that is used in free apps available on the Google Play Store and Apple App Store.

It is the most effective way of extracting revenue while keeping the app free on the market for download.

How can you achieve that? Through these three renowned methods. How you choose to utilize them is entirely up to you.

  • Subscriptions- Your mobile app can run some exclusive content or function on a subscription basis.
  • Short-term Purchases– These products, features or items are purchased for immediate use. Like health-gain or virtual money for a gaming app.
  • Long-term Purchases- These are the features that are one-time purchases for permanent use. This could be an ad-blocker, additional functions, or themes even.

3. Freemium

how to make freemium work?
Via Themtry

The process of making your app free for the basic version that contains few functionalities that most of the users would want in your app. While keeping high-level more advanced functionalities at a price for the premium members. Take Dropbox as an example; it gives free limited storage to its users and more storage at a premium price.

It’s not as simple as this sounds- striking a good balance of giving the users good-enough workable functionality to want to purchase the premium functionalities can be tricky.

To curb some of the confusion, you should ask yourself the following questions.

  • Do you have an alluring migration plan from free to premium, for your users?
  • Does the value of your service increase the longer your app is used?
  • Are there any loop-holes in your app’s infrastructure for people to take advantage of?
  • Does your app have huge market potential?
  • Can you monetize the free subscribers?

These are just some of the questions you need to answer to determine whether to apply a freemium model to your mobile app or not.

4. Sponsorship Deals

The plan here is to gain credibility and a large user-base and then approach a brand for sponsorship collaboration.

Now depending on your deal, you can either split the revenue with your sponsor, or you can charge a monthly sponsorship fee.

This a lucrative method and results in great earnings through a free-app. However, finding a great sponsor isn’t an easy challenge. So, build your mobile app’s credibility to attract potential sponsor deals.

Bonus: Email Marketing- Not as popular or as powerful as this method once was. But, still very effective. You can collect user emails through the app, and then target them with promotional emails or newsletters. Again, give them the option to opt-out of the emails and be strategic in how often you send them.


With all these monetization methods in place, make sure you are not over-doing it. No one appreciates too many ads ruining their experience. So, be smart about how to go about monetizing your free app.

Muniza Ashraf

Muniza Ashraf is a software engineer turned technical writer with extensive experience in various niches, especially all-things-tech-related. If she isn’t writing, she is researching to bring information in the best way possible. Currently, she is associated with KoderLabs, a custom software development company in Dallas.

Add comment