Do you have a cool mobile app idea? Or, perhaps, you already have an app, but aren’t sure how to generate an income from it?
If so, learn about the 5 best mobile app monetization strategies—no fluff, only actionable tips and examples.
In-app advertising.
This model is best for apps that have high traffic but low engagement or retention. For example, news, entertainment, or utility apps. Examples include Facebook, YouTube, and Candy Crush Saga.
Pros:
- Generates passive income while users don’t have to spend a cent
- You can leverage the app’s traffic to attract more advertisers
- It can be easily integrated with various ad networks and platforms
Cons:
- Ads may be annoying for your users
- Ads may lower app performance
- Ads may damage the app’s reputation
In-app purchases (freemium).
To make this monetization model work, your app needs to have high engagement, retention, and value. In-app purchases are popular in mobile games and fitness apps, such as Fortnite and Fitbit.
Pros:
- Incentives can increase user engagement and loyalty
- Users are more likely to pay after they’ve tried the free version
- Add-ons can enhance the app’s differentiation and functionality
Cons:
- Excluding users who are not willing to pay may limit the app's reach
- Paywalls may create a negative user perception
- You may face legal or ethical challenges by exploiting user psychology
Subscription.
This model is best suited for apps that have high quality, demand, or differentiation. Think of the apps you’re subscribed to—most of them are likely related to streaming or productivity. Examples include Spotify, Headspace, or Disney+.
Pros:
- Generates a steady and predictable passive revenue stream
- Can help build a loyal user base
- Can reduce the churn rate and increase the lifetime value of users by providing consistent value
Cons:
- You may face high competition and price sensitivity
- User retention requires constant improvement
Affiliates.
People must trust you to follow your advice. Therefore, your app needs to have high authority in your niche. For instance, Amazon’s affiliates earn by recommending its products, and TripAdvisor uses affiliates to offer users the best deals for their stays.
Pros:
- Affiliate offers may expand the app’s value proposition
- Sharing revenue and users may be a win-win situation
- Recommending products that match user needs may increase their satisfaction
Cons:
- Promoting other brands can dilute the app’s focus
- Endorsing low-quality products may lead to trust issues
Paid app.
However, your app must be unique and in high demand to make users pay upfront. These are typically specialized premium apps like Facetune or Procreate.
Pros:
- An immediate, upfront revenue
- Reduces reliance on other monetization methods
- Straightforward to implement
Cons:
- The revenue is non-recurring
- You may fail to meet high user expectations
- The upfront fee must be justified
Are mobile apps really that profitable?
It seems that there’s a mobile app for every purpose. Often, an app can be replaced by a basic website, and cluttering your phone menu with new icons gets annoying.
For this reason, some consider mobile apps dead. But the stats say otherwise.
Mobile users spend over 90% of their time on apps and only 7.5% on web browsers. Think about it!
Furthermore, the global app store spending is projected to reach $270 billion by 2025. The compound growth rate between 2021 and 2025 is an astonishing 11.5%.
The average person spends 4.8 hours on their phone daily.
“Mobile apps are the new frontier of marketing. They offer a unique opportunity to connect with customers, build loyalty, and drive sales. However, they also require a lot of investment, innovation, and maintenance. To make money from mobile apps, you need to create a compelling user experience, a clear monetization plan, and a scalable distribution strategy.”
How to Make Money From Mobile Apps: The Ultimate Guide.
Mobile apps are here to stay.
And you can leverage their potential with us. Get in touch.
