How do free apps make money?

Mobile apps are getting more popular than before with each passing day. According to some estimates, there are more than 6,000 new apps that are launched on Google Play Store. It is also reported that smartphone users on average use 9-10 apps daily. All these statistics point towards the fact that the use of different apps is more popular than ever. It is also observable that a significant majority (90%) of mobile phone applications fall in the “Free” category. It means that the users do not have to incur any cost to use them. However, the question that arises here is how they make money then? Creating an app is a hefty investment that may even take well over a million dollars. Then, why do the apps do not charge any money? They do make money, and in this article, we will tell you how they make money.

The following are some ways by which free apps make money:

  •         Advertising

Advertising is one of the most common and easiest ways to monetize free apps. A third-party advertising network may come in handy in this pursuit. The modus operandi is simple. Apps show advertisements to their users and in turn, charge for it. As of 2016, nearly 70% of free apps declared advertising as the backbone of their revenue.

  •         CPI Programs

CPI stands for Cost per Install. It is an innovative new way of marketing. It is the mobile counterpart of Cost per Acquisition (CPA) in the web marketing realms. The mechanism of this method is simple. The free app advertises other apps and gets paid each time someone installs it.

  •        Sponsorship

Sponsorship is not a popular strategy but it can still prove to be a highly effective and exciting strategy for free apps to make money. However, free apps need to have the right kind of app that fits into the niche. For sponsorship to be active, both sides must have the same target market.

  •         Selling products

If the free app is offering to sell products, it can quickly generate revenue. For example, if a bookseller decides to launch a free app where the customers can order books, the app will make money via the sales.

  •         In-app purchases

In-app purchases are also a standard method of making money via free apps. Many popular mobile apps like Facebook make money by offering different in-app purchases. In the case of games, incompatible upgrades and other similar features can make for significant in-app purchases.


These are some of how free apps can make money. Now that you know how free apps can make money, you can go on to use these methods for your app as well. It will make sure that despite being free, your app makes loads of money. However, the primary concern here must be the quality and experience of your app. If you can amplify these aspects, the money will automatically flow in via the sources mentioned above.