Free Online Apps: how do they make money?

We now live in an era of technology where a lot of things have been computerised and our lives become heavily dependant on our laptops, smartphones, tablets etc. Over the years, there’s been emergence in Online apps popularity and the various things they can do to make our lives better and easier. From social media apps that help us stay connected and updated at all times like Facebook and Snapchat, sporting apps that help keep us motivated to exercise like Nike app, Fitbit, Strava etc to games apps that keep us entertained like Candy Crush and Pokemon Go.

However, one noticeable thing is that the majority of these services can be installed to your phones for free. Then, how do they actually print their money? …….Good question.

• In app purchase allows to update your experience through additional choices and features, a classic real life example is my brother spending $340 on Talking Tom coins (though it was dumb).
• Another source of money is advertising, this is very evident in games, which is called advergaming. Although it gets frustrating to cancel and skip ads on a small mobile screen, users have to put up with it or pay for upgraded version. The only option for users to get rid of it for free is by using the app on airplane mode.
• Subscriptions provides high content and better features that can be used over the paid period of time, for example Youtube Red has exclusive videos, live videos, no ads interruption and the ability to download videos.

The free online app marketing is a good platform for advertising since people don’t have an option of ad blocking but however it can get very obnoxious to the users as it is very difficult to skip or cancel the ad, which can harm the image of the brand.

Therefore, app-makers have started to turn away from relying on in-app advertising and switching to subscription to premium and in-app purchase to make money. This allows the users to try the app and its features beforehand to see if they like it and choose to upgrade and pay for more additional features.

Moreover, online data gathered from the app can allow marketers to assess the user behaviours of the app and give them ideas as to what new features might be worth adding. For instance, do you notice how Instagram now have a new feature multiple pictures can be uploaded within a single post? This resulted from the increasing number of Insta heavy users and their tendency to “spam” as only one picture is allowed in one post.

 

So how does your favourite app generate money? Think about it…