eli5: why do some companies make ads about their free apps to market them?
In: Other
Truly free (non-profit) apps simply don’t exist in the public image, the few that do are the ones you don’t see paid ads for.
Even when an app is free, they’re often filled with their own ads, in-app purchases, and data brokering that more than makes up for the money put into advertising.
User numbers are key. Most/many start-ups don’t expect to make money from their product. They aim to grow the user base and then sell it or get major investment. I know this because I made an app that went ballistic in it’s field, but didn’t know what the ‘sell when big’ strategy and someone else ended up copying it and did it right. Shame that really.
If you can get customers reading your newsletter, waiting for your sales, collecting your reward points and so on, they’re less likely to go to your competitors. In marketing sometimes they talk about getting customers into your “ecosystem”, and the more they invest in that, the more likely they are to stick around; if they buy from somebody else they feel like they’ve wasted the time/energy they put into getting settled in your app.
So the app isn’t a direct revenue generator, but it brings you business and possibly helps you keep people with you.
It might cost $10 to show someone an ad, but if they use your app, they may see $100 worth of revenue for that person watching the ads in the app. As long as its profitable, it’s a good idea.
I think the concept here is called “user as product.” Getting your information and selling it is how the ad makes money. They want you to use it, so it’s free, and advertising makes more users that makes them more money.
Because even if it’s free, they still make money from ads or in-app purchases. It’s not charity, it’s business.
Because they need to make people aware that the app exists in the first place! Even free apps need advertising to get users. 🌟
Latest Answers