App Monetization Strategies To Grow Revenue & Retain Viewers


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Building apps is one of the most rewarding ways to earn money online, but when it comes to finding the best mobile app monetization strategies, you might be at a loss as to where to start.

You must have probably heard that one of the best ways to get people to use your app is to make it accessible and monetize it through advertising. Statista says that 47% of businessmen monetize mobile apps by using this model vehicle.

However, it’s not the only one. There are multiple ways for monetizing your app effectively & generating a handful for yourself.

Here’s what research says about the most popular app monetization strategies:

mobile app business model stats
Source: Statista- Leading Mobile App Monetization Models

Here are the Top 6 App Monetization Strategies for Android & iOS

1. Subscription Model- For a Continuous Source of Revenue

An effective way to make money from your app is by charging a subscription fee. This strategy is most often used by service-based apps but can also be used for app downloads or purchases. Consider offering subscriptions with different durations and price points for additional revenue opportunities.

You’ll have to note whether or not you want users who have downloaded your app without paying any fees to continue using it. Or if you want them to pay upfront before they can reaccess it. Both options will affect how much you can charge per user over time.

So how do you decide? Do a little market research! Ask yourself who is already doing what in your space and why they decided on that option. For example, most fitness apps are free but offer paid subscription services once people are hooked on their free content.

Note: As per Statista, Subscription Model has a popularity of 56% among various app monetization methods.

For inspiration on subscription-based pricing models, you can look at diverse industries, like music streaming and other media services like Netflix.

Top Apps using Subscription Model: Netflix, Headspace, etc.

2. Freemium Model- When Targeting a Humongous Audience

This app monetization model allows you to test your app in a free version, to get users hooked on it. Then, once they get caught, you ask them to pay for a premium version. If your content is appealing, people will gladly pay for it.

The significant benefit of using a freemium model is that it lets you reach a broad audience. Freemium apps are relatively cheap to build and distribute. It makes them an appealing option for businesses with limited time, money, or expertise but still wants to reach a high number of consumers.

The freemium model also works well for apps that aren’t useful on their own but proves valuable after a few in-app purchases. For example, games like Clash of Clans or Monument Valley.

When done right, users will love your app enough that they’ll feel compelled to keep coming back for more. While a freemium app strategy can lead to loads of downloads, it also means that you’ll need users to convert (through in-app purchases or advertisements) to keep generating revenue.

On the other hand, it takes a lot of work to make your app stand out from other free apps so that your users will be willing to spend money.

Top Brands using Freemium App Model: Dropbox, Trello, etc.

3. In-App Advertising- When you have Gained a Large Client Base

In-app advertisements are displayed to seem native to the app experience and not disruptive to it. You can display ads based on several factors, including time, geography, device, and more.

In-app ads are an effective way to monetize apps. However, you must implement in-app advertising to avoid ruining the user experience and destroying retention rates. Once advertisers find a profitable model for in-app ads, they will likely stick with it as it offers cost-efficiency over other models.

If your app is data-intensive or resource-intensive, then it could affect your users’ mobile internet experience and prompt them to uninstall your app. It can also affect battery life when ads run for extended periods or if you forget to put a cap on ad refresh frequency.

Hire app developer that tests your app thoroughly before rolling out any advertising platform to ensure a positive impact on the revenue.

Top Apps using In-App Advertisement: Instagram, TikTok, etc.

4. Paid App Model- When the Competition is Limited

The paid app model bypasses in-app purchases altogether by charging upfront before installation via Google Play Store or Apple App Store. You might lose a few potential customers due to having a total price upfront.

However, some prefer paying upfront for useful apps over downloading a free app that proves worthless. Such apps’ purchase price is usually more than average and is around $2-$5 per download from an app store provider like Google Play or Apple’s iTunes Store.

Note: People tend to be more reserved with their money when it comes to mobile apps. The success of paid mobile apps is highly dependent on the marketing buzz and chosen platform for launch.

paid app model
Source: Statista-Paid Apps Performance on the Leading Playstore

According to Business News Daily, almost a third of free app users never make an in-app purchase, and around 80% do not make any purchases at all. Remember that choosing a revenue model has implications for what your app does, how it gets built, and how you interact with users.

Just ask yourself: Is your premium app worth paying for?

Top Brands using Premium App Model: Spotify Premium, Bouncer, etc.

5. In-App Purchases- Adding eCommerce Features or Luring Clients with Additional Functions

In-app purchases let you monetize your app by allowing users to purchase extra items or features from within your app without having to navigate away from it. While in-app purchases get primarily designed to help developers generate revenue from their apps, there are several benefits for users and businesses alike.

By making an app accessible but giving users a chance at a better experience through in-app purchases and upgrades, you’re giving people an easy opportunity to convert into paying customers.

If you make your in-app purchases easy and appealing, people are more likely to want to download your app. Building a good base of happy customers who love your app will help you drive downloads later when you need them.

While in-app purchases can be a valuable addition to your app, they have cons. One possible drawback is that not all users will want to pay for anything on your app. If you offer premium features, some users may prefer not to buy anything, leaving them with a substandard experience if they cannot access these premium features.

Top Apps using In-App Purchases: Paid stickers in Texting, Social Media Apps

6. Sponsorship & Partnership- For Collaborating with Brands

You can find companies interested in promoting their products or services through your app. Businesses will advertise their services in your app to reach a specific target audience. It would be best to discuss any kinds of agreements, get legal advice, and make sure you target businesses that will profit from working with you.

It’s also good to discuss how you will approach businesses regarding partnerships, what kind of promotion they want, and what type of engagement you expect from them. Do not look for free promotion because it’s worth paying a fair amount if that partnership is suitable for your app and users.

Make sure you choose the right strategy for your type of business. For example, if you sell an app that enables people to buy products, in-app purchases may be ideal; but advertising makes more sense if you’re selling content or services.

Once you know what kind of monetization is most suitable for your app, think about how much money and time you spend on marketing. Also, focus on which platforms will be the most valuable for promoting your product.

For example, Google AdWords works best for advertising your product, and Apple’s iTunes store can help give your app visibility with its vast consumer base. It makes sense to target those marketplaces first.

Final Words

While there are many different ways to monetize your app, I have provided you with some of the top ways that have proven successful in generating revenue. It’s essential to focus on the most compatible money-making strategy for your app to make the most of it.

Once you’ve determined how best to make money off of your app idea, then it’s time for development! Connect with a top app development company in India for an app with high UX at an affordable budget.


Question: What is App Monetization Strategy?

Answer: The monetization strategy of an app is its plan for generating revenue. The strategies vary depending on where you want your app to appear. If you wish to have your app only available in Apple’s App Store, it may be best to offer it as a paid download.

If you are developing a mobile game that can appear on multiple platforms and still make money, you might focus more on advertising options like interstitial ads or video advertisements. When it comes down to it, an effective monetization strategy involves using all of these elements in a way that provides for your business.

Question: Which app platform is more suitable for using a paid app model?

Answer: Notably, iOS app monetization strategies are more successful with paid apps than Android.

Varun Bhagat
Varun Bhagat is a technology geek and works as a Sr. IT Consultant with PixelCrayons, a web & software development company in India. He possesses in-depth knowledge of mobile app development & web development technologies and helps clients to choose the best platforms as per their needs.


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