The majority of the time, you can just start using an app after downloading it from the store. Naturally, developers who provide free apps anticipate payment in another way. The following article clarifies how a free app generates revenue if you are considering app development and have questions.

In the article, we examine how well-known free products generated revenue from their apps, provide guidance on selecting an app monetization strategy, and examine which software development tools and services to integrate.

So, one of the eight most popular monetization methods is how do apps make money in 2022:

1. Advertising

The simplest and most popular way to make money from a free app these days is through mobile ads. At the moment, 7 out of 10 apps contain embedded advertisements that bring in money per display (per impression), per click, or per installation.

• Banner Ad
• Video Ad
• Native Ad
• Interstitial Ad
• Incentivized Ad

A disadvantage of the advertising model

The most common source of app revenue is advertisements. But it is understandable why this has started to annoy and irritate customers. Less than 20% of users click on ads, so their extensive use is no longer effective. Additionally, a startup project cannot use this monetization strategy because it only works with apps that have a large user base.

2. Referral Marketing

Referral marketing and the earlier method of in-app advertising for app monetization are closely related. Even so, affiliate marketing is a distinct branch of marketing. The app contains educational material about an affiliate business, and you are rewarded for clicks and installs. These incentives are based on a revenue-sharing or cost-per-action (CPA) model.

The following are some applications for the referral marketing model:

• Publish different applications
• in-app marketing
• promote goods or services through the app store

Additionally, there are numerous affiliate network businesses (such as AdMob and Flurry) that focus on locating an appropriate affiliate for your application. The integration of this model can be aided by a variety of software and tools.

3. In-App Purchase & Freemium Model

A very common strategy in the freemium app model is in-app purchasing. It is possible to open new app content, sell digital or tangible goods, and provide premium features or bonuses. The app store is in charge of all of these transactions, and it pays the owner a commission on each one.

There are three types of in-app purchase strategies:

• Consumable: These resources are primarily used once in mobile games. Examples include virtual money and health points.
• Non-consumable: These are attributes that are always in use. Ad blocking and extension in-app functionality, for instance.
• Subscription: This enables access to extra features and content for a set period of time. For illustration, a yearly or monthly service subscription

4. Subscription Model

As previously stated, the subscription model creates revenue streams from the weekly, monthly, or yearly fees for a particular service offered by the free app. Cloud services, audio and video content providers (Spotify, Google Music), and digital news portals are the main users of this model. Customers gain access to the content in accordance with the subscription plan they have selected.

5. Sponsorship Model

Getting sponsorship is a successful business strategy to use when trying to monetize a free app. Usually, developed apps with a steady user base are eligible for this model. Applications with a specific market niche can benefit the most. As a result, you can get in touch with sponsors from the same sector to adapt the app’s design to their brand or match their ads and information to their brand.

two main sponsorship agreements:

• Equally, distribute app revenue
• Determine a monthly sponsorship charge

6. Crowdfunding Model

This method of free app monetization is relatively new. Kickstarter, Indiegogo, CrowdFunder, and AppsFunder are some of the platforms that custom software developers can use to raise money for their app development and marketing requirements.

The disadvantage of the model of crowdfunding

There are thousands of applicants, making crowdfunding raising very challenging. It is essential to demonstrate the worth of the offering and why investing in it would be worthwhile.

7. Email Marketing

Email marketing has consistently been a successful strategy in every industry, making it a wise choice for the creation of restaurant apps.

This is an outdated method of gathering user information, primarily email addresses, and sending pertinent marketing material to pique subscribers’ interest in a good or service. When used to notify about new features, rewards, app news, etc., it is useful when your user retention indices decline.

Email addresses can be combined in a variety of ways:

• Ask for the email with a pop-up message and provide value in exchange (app coins, bonus)
• For a user to sign up, it collects emails via the Facebook SDK.
• For simple email collection using third-party tools

Never forget to notify, request permission from, and specify the purpose of using personal user data. According to the GDPR, this is a concern, especially if your target market is in Europe (General Data Protection Policy).

8. App Merchandise & E-commerce

The e-commerce sector is expanding, and a growing number of people are starting to shop online. Free mobile apps are used to sell the majority of physical goods.

With the aid of its Merch tool, an easy program that enables app owners to create and sell their branded items within their apps, Amazon offers the chance to make money using this app model. Production, selling, payment, and delivery are all handled by Amazon, and you receive a cut of the revenue.

The app merchandise model has disadvantages

Only the most popular apps with a sizable user base have access to this option. Another option is to create a free app for your regular business and use it to sell any additional goods.