How Can an App Make Money?

15 Proven Monetization Strategies for Mobile Applications

15 Ways Mobile Apps Generate Revenue

1. In-App Purchases

Sell virtual goods, premium features, or additional content within your app. This works particularly well for gaming apps but can be applied to many categories.

2. Subscription Model

Offer weekly, monthly or annual subscriptions for premium content or features. Popular with streaming, productivity and dating apps.

3. Advertising

Display banner ads, interstitial ads, native ads or rewarded videos through networks like AdMob, Facebook Audience Network or AppLovin.

4. Freemium Model

Offer a free basic version with limited features and charge for the full version or premium upgrades.

5. Sponsorships & Partnerships

Collaborate with brands relevant to your audience for sponsored content or exclusive offers.

6. Affiliate Marketing

Earn commissions by promoting other companies' products or services within your app.

7. Data Monetization

Anonymized user data can be valuable to market researchers (must comply with privacy regulations).

8. White Labeling

License your app's technology to other businesses who want their own branded version.

9. Crowdfunding

Platforms like Kickstarter or Patreon can help fund development in exchange for perks.

10. Paid Apps

Charge upfront for downloads, though this model has become less common for consumer apps.

11. Transaction Fees

Take a percentage of sales if your app facilitates commerce (like marketplaces).

12. Licensing Content

If your app contains valuable content, license it to other platforms or businesses.

13. Enterprise Sales

Sell customized versions of your app to businesses for their employees or customers.

14. Physical Goods

Use your app to sell related merchandise, equipment or other tangible products.

15. Hybrid Models

Combine several of these approaches for diversified revenue streams.

Monetization Model Comparison

Model Best For User Experience Revenue Potential
In-App Purchases Games, creative apps Medium (can be non-intrusive) High
Subscriptions Content, productivity apps Good (clear value) High (recurring)
Advertising High-traffic apps Low (can be intrusive) Medium (scales with users)
Freemium Most app categories Good (user chooses) Medium-High
Paid Apps Niche, professional tools Excellent (no ads/IAPs) Low-Medium

App Monetization Best Practices

Understand Your Audience

Different demographics respond to different monetization methods. Research your users' preferences and willingness to pay.

Prioritize User Experience

Monetization should enhance, not detract from your app's core value. Intrusive ads or aggressive paywalls drive users away.

Test Different Approaches

Use A/B testing to determine which monetization strategies work best with your specific audience.

Consider Hybrid Models

Combining multiple revenue streams (e.g., ads + premium subscriptions) often works better than relying on just one.

Top Monetization Trends 2023
  • Hyper-casual games with rewarded videos
  • Subscription fatigue solutions
  • Blockchain/NFT integrations
  • Contextual advertising
  • Pay-per-use models
Case Studies
Spotify

Freemium model with ads for free users and premium subscriptions for ad-free experience.

Candy Crush

In-app purchases for extra lives, boosters and level packs generate billions.

Tinder

Subscription tiers (Plus, Gold, Platinum) with varying premium features.