Free apps display ads to users, earning revenue from advertisers who pay for ad placements. These ads can be in various formats, including banners, interstitial
Freemium Model
Apps offer basic features for free but charge users for premium or additional features or content. Users can choose to make in-app purchases (IAPs) to enhance t
In-App Advertising
Free apps integrate advertisements within the app's interface, such as between levels in a game or in a news feed. Users can interact with these ads to earn rew
Subscription Model
Apps offer a free trial or limited access and encourage users to subscribe for full access or premium content. Subscribers pay a recurring fee (e.g., monthly or
In-App Purchases (IAPs)
Apps allow users to buy virtual goods, currency, or other items within the app. These microtransactions enhance the user experience or progress within the app's
Affiliate Marketing
Apps promote products or services from other companies through affiliate links or partnerships. When users make purchases through these links, the app earns a c
Free apps display ads to users, earning revenue from advertisers who pay for ad placements. These ads can be in various formats, including banners, interstitials, and video ads.
– Potential for high revenue, especially with a large user base. – No direct cost to users. – Allows users to access the app without payment.
– Advertisements can disrupt the user experience. – Users may opt for ad blockers or become annoyed by excessive ads. – Ad revenue may fluctuate based on user engagement.
Facebook, Instagram, TikTok
Freemium Model
Apps offer basic features for free but charge users for premium or additional features or content. Users can choose to make in-app purchases (IAPs) to enhance their experience.
– Attracts a large user base with a free version. – Generates revenue from users who want enhanced functionality. – Allows users to “try before they buy.”
– Users may be reluctant to make in-app purchases. – Balancing free and premium features can be challenging. – Competition with other freemium apps.
Spotify, Tinder, Dropbox
In-App Advertising
Free apps integrate advertisements within the app’s interface, such as between levels in a game or in a news feed. Users can interact with these ads to earn rewards or bonuses.
– Provides additional revenue alongside other monetization methods. – Can be less intrusive than external ads. – Rewards users for engaging with advertisements.
– Advertisements can still interrupt the user experience. – May require careful design to ensure ads are relevant and non-disruptive. – User opt-out options may be necessary.
Candy Crush Saga, Words with Friends
Subscription Model
Apps offer a free trial or limited access and encourage users to subscribe for full access or premium content. Subscribers pay a recurring fee (e.g., monthly or annually) for continued access.
– Generates consistent and predictable income. – Encourages a committed user base. – Provides access to premium features and content.
– May limit the app’s reach, as not all users may subscribe. – Users may be resistant to subscription fees. – Requires ongoing content or feature updates to justify the subscription.
Netflix, Apple Music, Adobe Creative Cloud
In-App Purchases (IAPs)
Apps allow users to buy virtual goods, currency, or other items within the app. These microtransactions enhance the user experience or progress within the app’s ecosystem.
– Encourages frequent spending by users. – Can provide a sense of achievement or progression. – Appeals to users who prefer spending small amounts over upfront fees.
– Users may feel pressured to make repeated purchases. – Balancing the pricing and value of virtual items can be challenging. – May lead to excessive spending for some users.
Clash of Clans, Pokรฉmon GO, Candy Crush Saga
Affiliate Marketing
Apps promote products or services from other companies through affiliate links or partnerships. When users make purchases through these links, the app earns a commission from the sales.
– Diversifies revenue sources. – No need to create or manage products. – Potential for passive income.
– May require careful selection of affiliate partners to maintain trust. – Users may become skeptical of biased recommendations. – Commission rates can vary.
Blogging is a prevalent and well-established practice, with popular blogging platform WordPress powering many websites on the internet. While a few successful bloggers really make money, those who do usually monetize through affiliate marketing, Google AdSense (or other advertising platforms), sponsorships, memberships, or selling their own digital and physical products.
TikTok, owned by the Chinese tech giant ByteDance turned as among the most successful native micro-video platforms, and it became the go-to platform for millions of young users. Thus, the “TikToker” has already become the evolution of the “influencer” from platforms like Instagram. Those TikTokers make money in a few ways, such as monetary gifts, sponsorships, advertising agreements, affiliations, and more.
Online influencer marketing is a relatively new creation, but it has fundamentally changed how brands communicate with consumers. People with targeted audiences are now the focus of advertising efforts. Influencers can tap from small to larger audiences thus, giving companies another way to promote their products. Indeed, influencers make money by selling digital products via sponsorships and affiliations, brand ambassadors programs, and physical products.
Podcasts make money in several ways. The primary sources of revenues from podcasting come from affiliate marketing, advertisements (in the form of pre-roll, mid-roll, post-roll), sponsorships, selling your own products, or by using podcasting to sell consulting services. Podcasting is an effective marketing and distributionchannel, and it can be integrated within a businessmodel.
Influencer marketing involves the marketing of products or services that leverages the popularity, expertise, or reputation of an individual. Influencer marketing is often associated with those who have large social media followings, but popularity should not be confused with influence. Influence has the power to change consumer perceptions or get their audience to do something different.
Instagram makes money via visual advertising. As part of Facebook products, the company generates revenues for Facebook Inc. overall businessmodel. Acquired by Facebook for a billion dollar in 2012, today Instagram is integrated into the overall Facebookbusiness strategy. In 2018, Instagram founders, Kevin Systrom and Mike Krieger, left the company, as Facebook pushed toward tighter integration of the two platforms.
TikTok makes money through advertising. It is estimated that ByteDance, its owner, made over $17 billion in revenues, for 2019. While we don’t know the exact figure for TikTok ads revenues, given it counted over 800 million users by 2020, it is a multi-billion company, worth anywhere between $50-100 billion and among the most valuable social media platforms of the latest years.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
Scroll to Top
Discover more from FourWeekMBA
Subscribe now to keep reading and get access to the full archive.
