How Do Free Apps Make Money? A Beginner Web Users Guide

In this tech-driven world, every business has been digitalized. The virtual marketplace is offering more revenue in contrast to the physical market. As per research, online businesses, on average, make money about $150,000 every month as revenue. This quite depicts the picture that virtual business is the new source of revenue generations. 

In relevance, several businesses are capitalizing on the app market. With the progression of technology, consumers are more hooked on online services. Whether it is shopping or technical repair, consumers rely on apps to accomplish any need. Every year mobile application Development Company in the USA develops thousands of useful android apps that empower businesses to get a return on their endowment.

Further, not only the business-oriented apps are making money, but rather the free sole apps with unique features are also generating capital for businesses. Statistics demonstrate that the top 200 listed apps on the Google Play store earn a whopping amount of $82,500 each day. This gives a whole idea about why businesses invest in mobile app development services. In this editorial, you will learn how free apps make money. Have a look into it.

Unfolding Free apps and how they are diverse from paid apps!

Free apps are those apps that don’t demand any subscription in return for using the app’s features. These apps come as completely open-source to users and offer them desired facilities that they anticipate. A free app can offer you any classification of services. It can be an eCommerce app, lifestyle app, instant messaging app, or gaming app; the free apps neither need real money for buying nor demand for any sort of subscription fees. 

As per Tech crunch’s report, about 90% of the apps in the app domain right now are open-source. The fee that these apps generate is from the number of downloads.

Apart from downloads, free apps also earn an abundance of revenue from other sources like ads displaying, selling, affiliate, and many more.

Difference between free and paid apps

The paid apps always do charge a certain amount from the users to offer their features in return. These apps usually get fewer downloads because barely consumers in the competitive market pay for an app. Besides, in a paid app, users generally do have higher expectations. If the app developers fail to meet consumer expectations, then none of the upcoming apps will get a good response. 

However, one prominent difference and a con in the paid app is, you have a restricted preference for monetization. It only includes the yearly and monthly subscriptions. So, you can clearly identify now that free apps are a lot better option in a nutshell. You can utilize several free app monetization approaches to earn huge revenue. 

Now that you know the difference between free and paid apps, here are some indispensable ways how free apps make money in the app market.

How Do Free Apps Make Money: 5 Popular Money Making Methods 

#1- Advertising

Advertising is undoubtedly the most prevalent approach to making money using a free app. It is also quite easy to incorporate into your strategies.

In this strategy, a third-party business has to pay you in return for promoting their brand on your app’s interface. Statista’s report also suggests that 31% of businesses earn most of their revenue using advertising. Making money using commercials is probably the most convenient way. As long as you have an extensive number of downloads, you can get continuous offers for promotions. In such cases, all you require to do is find a suitable display place in your app interface.

The method of this sort of advertising works with the pay-per-click method. That implies; a business/developer earns when a potential user clicks on the advertising. Apart from that, businesses can also get paid every time the ad gets displayed to an intended user or when the user installs it.

On the other hand, there are also four ways of ad displaying in an app. It includes:

  • Interstitial ads – The ads that get popped up on a full-screen when users open the app are Interstitial adsThese ads are skippable after at a certain time.   
  • Banner ads – Banners ads are those ads that get displayed inside the app home screen or any other page in its UI. This banner can appear in different sizes, making it convenient for users to use the app.

  • In-app video promotion – These are ads that comprise a video playing after completing a stage. These ads usually come in gaming apps more. Users are requested to watch videos to get rewards in return.
  • Native ads– These ads come as an integral part of the app and come within the apps’ UI

#2- Subscription 

Subscription is another prevalent source of generating revenue. However, free apps are accessible free of cost to users. But the developers can offer impressive free features and trial premium features to entice them for a premium subscription. This is the most working practice to generate money using a free app. Once the user gets used to the premium features would always want to access them by paying the price.

Further, free trial usage is one most prevalent tactics that free app developers use to grab more consumers. You can witness these types of revenue generation strategies mostly in online video streaming apps and cloud storage apps.

#3- Vending merchandise 

Vending merchandise is another popular way of earning revenue. In your open-source mobile app, you can sell different merchandise from sellers and manufacturers to earn revenue in return.

Several apps sell physical products like toys, garments, and beauty products. Selling on free apps has several perks. 

The free app has a large user base, and you can reach out to maximum users to sell your products. Free apps also aid users in searching inventory and finding other useful items they need. Developers developing free apps can sell their own newfound merchandise or bring in businesses to collaborate.

#4- In-app purchases 

In-app purchases are more popular in the free gaming apps. This is a practice where developers entice users using several appealing additional features, contents, and app levels. For example, a gaming app can have constrained levels or weapons to trade for virtual currency. Users who are enthusiasts using the app will pay for the tools, ammunitions, or levels to proceed further in the game. These practices can also get utilized in other apps, where developers entice users with a diverse range of limited features.

#5- Sponsorship

Although sponsorship is a less prevalent method, it can be a robust strategy. Sponsorship in easy terms means a third-party investment in your business. It is basically, the developer’s idea to get launched on behalf of other investors.

They will endow capital in development and launching and offer you the credit/cost you demand. However, sponsorship is of several types. You can also bring in a sponsor when integrating a new feature into your app. Top app developers use sponsorship as a last-known practice for earning money.


In conclusion, these indispensable and powerful approaches help a free app make money. Now that you are aware of the top revenue generation methods. If you have any more suggestions, you can write them down in the comment section below.

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