As stated in the 2018 IAB Mobile Advertising Revenue & Usage Report, mobile users spend roughly 71% of their internet time on mobile devices, accounting for nearly three-quarters of daily time online.
Two years
later, it is easy to infer that this percentage has only increased, as our lives have become more increasingly dependent
on mobile devices year after year.
The massive
amount of time spent staring at our mobile screens does not go unnoticed by advertisers.
If anything, the accessibility of potential consumers on mobile devices allows
for more opportunities to make money, as the same 2018 report later states, “advertising
delivered on a mobile device now makes up 65.1% of total internet advertising
revenues.”
With such a high potential to make money through mobile advertising, how are people getting rich from free applications?
Free
applications and games have been popular since the very beginning of mobile
device downloads. Users are enticed to download these apps because they are
completely free, but how can they be available at no cost?
Free
applications easily generate high profits in number of ways, some of which may
even go unnoticed by users. The main three, or most well-known, strategies to
monetize free apps include advertising (varying types), referral marketing, and
in-app purchases.
Some basic
variants of mobile advertising include banner ads, which are often
non-intrusive text or images at the top or bottom of one’s screen, and native
ads, which are more integrated forms of sponsored content that can blend in and
seem inconspicuous among other content.
In Webs of
Influence: The Psychology of Persuasion, author Nathalie Nahai discusses how
people often become frustrated with ads that disrupt their online experience.
Nahai asserts, “not all pop-ups have to be annoying. Those that
gently slide into view at the bottom of the page, without obscuring content or
completely disrupting the visitors experience, can provide a good balance
between attracting attention and minimizing irritation" (78).
If integrated properly, advertisers can create revenue streams from non-intrusive ads that sometimes go unnoticed by mobile app users.
Interstitial Video Ads
One of my favorite free games, both available on mobile and desktop, is Paper.io. It’s an addictive and fun game which emphasizes the concept of a free application that makes money through advertisements.
The game frequently uses another variant of mobile advertisements, commonly seen online—interstitial video ads. A short 10-30 video advertisement usually plays in between rounds of the game, taking up the entirety of the screen in order to show the video.
Although sometimes annoying and overly attention-commanding, frequent players are so invested in the addictive game that they sit through the video just to play again.
This type of mobile ad is frequently seen across mobile and desktop devices, with ads on YouTube being one the most profitable.
One of my favorite free games, both available on mobile and desktop, is Paper.io. It’s an addictive and fun game which emphasizes the concept of a free application that makes money through advertisements.
Although sometimes annoying and overly attention-commanding, frequent players are so invested in the addictive game that they sit through the video just to play again.
This type of mobile ad is frequently seen across mobile and desktop devices, with ads on YouTube being one the most profitable.
Free vs. Paid Downloads
App
developers and advertisers make an incredibly high profit margin by offering
their app for free and relying on other means of monetization to make money.
A Statista
report published in December 2019 by J. Clement highlights the distribution of
free and paid apps in both the Apple App Store and Google Play store. The study
found that only 5-10% of users are willing to pay for an app, even if it is of
high quality.
The majority
of app downloads, making up roughly 90+% of download revenues, come directly from
free applications.
Paid
applications are less likely to be downloaded by users, as free apps that offer
in-app purchases have made up most of recent mobile app downloads.
Advertisers
frequently choose to include mobile ads directly into free mobile applications,
as the basis for most revenue streams. The strategy has been effective for
years and can be seen across almost all online platforms.
Free Apps are Consistently Successful
The concept
of making profits, solely from in-app purchases or advertisements on free
applications, has actually been used consistently for years.
In fact, all
the top grossing mobile applications of all time are free, according to the Statista report.
Many apps on
the App Store stay at little to no cost because much of their revenue comes
from in-app ads and purchases, rather than from the app download itself.
In-app
purchases and advertising through free application remain some of the most
effective strategies for mobile advertising. This continually emerging form of
advertising is so frequently used in today’s digital world due the amount of
various mobile ad types that one could choose from.
Finding the
balance between gaining advertising profits, while remaining non-intrusive to
users’ experiences and upholding their integrity, is an important factor of
which advertisers should be aware.
Works Cited:
Webs of Influence: The Psychology of Persuasion, Nathalie Nahai
