How much does a free mobile application pay?

Free mobile applications play a central role in our daily lives, whether as games, social networks or productivity tools.

Their popularity attracts millions of users on iOS and Android platforms. However, the question remains: how do these free apps, available with no upfront cost, manage to generate revenue?

The answer lies in a variety of monetization strategies, from in-app advertising to integrated purchases.

The different sources of revenue for a free mobile application

In-App Advertising

In-app advertising is a common monetization method for free mobile applications. 

They enable developers to generate revenue while offering users free access to their applications. 

In-app advertising comes in many forms, each with its own characteristics and advantages.

Advertising banners

These are static or animated visual ads, usually placed at the top or bottom of the application screen. They generate money in two main ways: impressions and clicks. Impressions correspond to the number of times the banner is displayed to the user.

Developers are paid a certain amount per thousand impressions (CPM). On the other hand, clicks on banners (CPC) also earn money, with each click generating income for the developer. So even if the user doesn't click on the banner, the developer can still earn money from impressions.

Video ads

Video ads are short ads that are triggered automatically or at the user's request, often in exchange for in-app rewards or benefits.

They can be highly engaging and generate higher revenues due to their interactive format. Revenues come mainly from cost-per-view (CPV), where the developer is paid each time a video is watched to completion, or cost-per-thousand-impressions (CPM), similar to banners.

Native ads

Native ads are designed to integrate seamlessly with the application's content. They often appear as sponsored articles or product recommendations, and their unobtrusive nature can make them more effective in terms of conversion.

Revenues are generated primarily by clicks and interactions with these ads, as with banners and videos.

Finally, their more subtle integration with application content can also lead to a higher click-through rate. This naturally increases revenues.

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Achats intégrés (In-App Purchases)

They allow users to purchase additional content or features directly from the application. Here are the main categories of in-app purchases:

Additional content

Additional content includes items such as extra levels in a game, advanced features, or exclusive content.
For example, a game may offer additional levels, special weapons, or unique characters that users can purchase. These purchases enrich the user experience and provide more content for those willing to pay.

Virtual currency

Many apps, especially games, offer virtual currencies that users can purchase with real money. This virtual currency can then be used to purchase various in-game items, upgrades or perks. For example, a player can buy gems or gold coins to speed up progress or obtain special items.

Virtual currency purchases are often offered in packs of different values, allowing users to choose how much they want to spend.

Subscriptions

Subscriptions give users regular access to premium content or features for a recurring payment, usually monthly or annually.

This model is common in mobile streaming apps, fitness services and educational apps.

For example, a music app might provide a subscription that allows users to listen to music without advertising, download songs for offline listening, and access exclusive content (Spotify, Deezer).

Subscriptions provide a stable, predictable revenue stream for developers while building user loyalty through ongoing access to premium benefits.

Freemium model

The freemium model is a commonly used approach to monetizing free mobile applications. This model gives users free access to a basic version of the application while offering advanced features for a fee.

Here are the main components of the freemium model:

Premium features

Premium features are advanced options and additional tools available for a fee. These features can include more powerful productivity tools, additional filters for a photo editing application, or customization capabilities.

For example, a free video editing application may allow users to make simple edits, but require a purchase to unlock special effects, sophisticated transitions, or high-resolution export.

These features attract users who want to get the most out of the application and are willing to pay for an enriched experience.

Free trial followed by subscription

The free trial followed by a subscription is a strategy that allows users to test premium features for a limited period before taking out a paid subscription.

This model is frequently used in streaming services, productivity applications and management tools.

For example, a project management application may provide full access to all its features for one month free of charge.

At the end of this period, the user must choose to continue with a monthly or annual subscription to retain access to advanced functionalities. This approach allows users to discover the added value of premium features before making a financial commitment.

Partnerships and sponsoring

Partnerships and sponsorship represent another monetization method for free mobile applications. These strategies enable developers to collaborate with brands and integrate sponsored content into their applications.

Collaboration with brands

Brand collaboration involves working with companies to promote their products or services within the app. These partnerships take different forms, such as integrating branded products into the app's content or creating joint campaigns.

For example, a mobile game might collaborate with a beverage brand to integrate elements of that brand into the game. Another example: is a fitness app that can promote sportswear from a specific brand.

Such collaborations benefit both parties: developers gain additional revenue, while brands gain visibility with a targeted audience.

Sponsored content

Sponsored content consists of integrating articles, videos or other types of content created or supported by partner brands. This allows promotional elements to be incorporated directly into the application in a natural, non-intrusive way.

For example, a cooking app could integrate recipes created by a food brand, featuring its products in the ingredients.

Similarly, a travel app could include destinations proposed by travel agencies, featuring special offers or exclusive recommendations. Sponsored content helps monetize the app while providing users with interesting and relevant information.

Factors influencing revenues from a free mobile application

Number of downloads

User Engagement

User engagement refers to the frequency and duration of app use. 

Users who spend a lot of time on an app and use it regularly are more likely to see and interact with ads, make in-app purchases, and sign up for subscriptions. 

Engaging features, a user-friendly interface and regular updates help maintain a high level of engagement.

Conversion rates

The conversion rate measures the proportion of users who perform a paid action, such as clicking on an ad, purchasing an integrated element or subscribing to a premium service. 

A high conversion rate indicates that the application is effective in encouraging users to spend money. 

Attractive offers, promotions and a good user experience can help increase this rate.

Reputation and user reviews

Positive reviews and a good reputation obviously attract more downloads and encourage users to trust the application. 

On the other hand, negative reviews can deter new users and reduce the engagement of existing users. 

Responding to feedback, fixing bugs promptly and maintaining transparent communication with users are important practices in maintaining a good reputation.

FAQ

What's the most lucrative source of revenue for a free mobile app?

Among the various methods of monetizing free mobile apps, in-app purchases often prove to be the most profitable source of revenue. This strategy enables ongoing revenue generation by offering paid elements directly within the application.

In-app purchases include additional content, virtual currency and subscriptions.

Additional content, such as extra levels or advanced features, enriches the user experience and encourages spending.

The sale of virtual currency is particularly lucrative in mobile games, where users buy resources to progress faster or obtain specific benefits.

Subscriptions, meanwhile, provide a steady, predictable revenue stream in exchange for access to premium features or exclusive content.

While in-app advertising is also an important source of revenue, it is highly dependent on traffic volume and user engagement.

On the other hand, in-app purchases can generate high revenues even with a smaller user base, provided users are sufficiently engaged and find value in the paid options on offer.

What are the common mistakes to avoid when monetizing a free mobile app?

When monetizing a free mobile app, there are some common mistakes that can harm both revenue and user experience. Here are some of the most common mistakes and how to avoid them:

Intrusive ads

Advertisements that are too frequent or poorly placed can annoy users and cause them to abandon the application. As a result, you need to strike a balance between generating revenue and maintaining a good user experience.

For example, strategically placing banner ads and limiting the number of video ads can help maintain user engagement.

Poorly designed integrated purchasing

Overpriced or unattractive integrated purchases can discourage users from spending money. You can offer a variety of options at reasonable prices for different budgets.

What's more, paid elements should really add value to the user experience.

Neglecting application quality

Ignoring user feedback

User opinions and feedback are invaluable in identifying problems and opportunities for improvement.

Ignoring feedback can lead to a loss of users and negative ratings on blinds. So it's important to respond quickly to feedback and make any necessary adjustments.

Uniform monetization for all users

Failure to segment users and apply a uniform monetization strategy can limit potential revenues.

Analyzing user behaviour and tailoring offers to different segments can maximize revenues. For example, offer premium options for the most engaged users or specific promotions for new users.

Too much dependence on a single source of income

Relying solely on a single monetization method can be risky. Diversifying revenue sources, such as combining in-app advertising, in-app purchases and subscriptions, make it easier to withstand market fluctuations and maximize earnings.

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