Complete Guide to Mobile App Monetization Strategy & Revenue Models

Planning to enter the lucrative market of mobile apps? Mobile app market research shows that almost the entire world is using smartphones to get things done, and businesses are highly interested in developing an app of their own, as it offers a steady stream of income.

So how does an app earn money?

Different strategies allow an app to be more profitable, often referred to as mobile app monetization strategies.

Mobile app monetization is one of the most important aspects of mobile app development.

Businesses that are planning to develop a mobile app often make the mistake of not focusing on app monetization, which later makes it difficult for them to recoup their investments.

Hence, when planning to develop an app for your business, make sure you incorporate all the possible methods that can help you generate an income.

If you are wondering what these strategies are, make sure you read this post till the end!

In this one, let’s take a closer look at mobile app monetization strategies and understand what they are, how they work, and how you can make the most out of them!

Without further ado, let’s get started!

Mobile App Monetization: An Overview

In layman’s terms, monetization strategies are the different ways of making money through mobile applications.

When you build an app for your business, you are able to reach millions of users, which is highly beneficial for your business.

However, when you have the opportunity to reach the masses, the mobile app ecosystem allows you to monetize the traffic on your app through various channels.

Establishing these channels and integrating them into your application is often referred to as the implementation of mobile app monetization strategies.

These strategies are a game-changer when it comes to mobile app revenues. Here are some mobile app statistics about monetization to give you clarity on the impact of:

• The global mobile advertising market is projected to reach $427.37 billion by 2032.

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• The average revenue per user (ARPU) for gaming apps in the US is $1.93, while non-gaming apps have an ARPU of $0.53.
• 45% of app users are willing to watch rewarded video ads in exchange for in-app rewards.
• In-app advertising accounts for 60% of app revenue, paid downloads account for 24% and in-app purchases account for 16%.

Knowing all these stats, you might have gotten an idea about the beneficial nature of mobile app monetization.

The numbers simply suggest that implementing a few strategies can help you gain monetary benefits from the application.

The big question that arises here is how? How does one monetize an application for the best returns? Let’s find out in the next section.

How To Monetize An App? Best Mobile App Monetization Strategies for 2025

Monetizing your application has become quite achievable, thanks to the mobile app development process that allows the integration of app monetization features into the app from the get-go.

To monetize an app, you need to choose the right strategy that supports your app’s objective and aligns with the niche and features of your application.

Here are some of the most popular mobile app strategies and how they work:

1. In-App Purchase

Also known as IAP, in-app purchase is a simple yet super-effective mobile app monetization strategy.

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What happens here is that the users can access the app for free and use its services. However, there are some special components of the apps that need to be purchased to use them.

A big example of in-app purchases is games like Call of Duty, where you can buy extra skins, guns, and areas.

As such, there are two types of in-app purchases that you can employ in your app.

They are:

Types of in-app purchases

♦ Consumable

Consumable in-app purchases are temporary or limited in nature. Thus, they can be consumed. This is the reason why they are known as consumables.

In any case, they include:

• In-app currencies
• Pay For Extra Points
• Purchase Hints

♦ Non-consumable

On the flip side, non-consumable IAPs are just the opposite. The user only needs to purchase them once. And they are inexhaustible.

These include:

• Pay and unlock new levels
• Live Long Premium Membership
• Remove ads from the app forever

Either way, the in-app purchase is one of the most beneficial and widely used app monetization strategies that one can implement.

The best part about this one is that it can easily be clubbed with other strategies, making an app earn more profits.

2. Advertisement

Well, we have all seen apps with a plethora of ads.

But did you know there’s a purpose behind it? Well, the in-app advertisement can make a lot of money.

Here’s what happens.

Once you have sufficient traffic on the app, you can start showing ads. There is a range of advertising networks.

Mobile App Ad Networks

• AdMob by Google: AdMob is a leading mobile advertising platform that offers a variety of ad formats, including banner, interstitial, and native ads.
• Facebook Audience Network: The Facebook Audience Network allows developers to monetize their apps with Facebook ads, which can be targeted to specific audiences based on their interests and behaviors.
• Unity Ads: Unity Ads is an advertising platform that is specifically designed for mobile games. It offers high-quality video ads that can be integrated seamlessly into games.
• AppLovin: AppLovin is a mobile advertising platform that provides personalized ads to users based on their preferences and past behavior.
• IronSource: IronSource is a mobile advertising platform that offers a variety of ad formats, including rewarded video ads, interstitial ads, and offerwall ads.

Let’s also look at the different types of advertisements that you can use in a mobile app.

Types of Mobile App Ads

• Banner Ads
• Interstitial Ads
• Native Ads
• Video Ads
• Rewarded Ads

There are several apps that have generated millions or even more with this method. The best part is that this mobile app monetization strategy can be paired with a lot of different niches.

In any case, let’s move on to the next strategy for making money.

3. Freemium Business Model

You’ve heard of free mobile apps; you must be using a lot of them. You’ve heard of the paid ones.

These are two different models on their own. But some genius had an amazing idea to combine these two models and double the revenue generation.

This gives us one of the, if not the most, successful app monetization strategies: the Freemium App Business Model.

Through this strategy, the app is offered to the user for free. However, to access the complete app, or rather the premium part of the app, you need to pay a one-time fee.

This is something that we often see in music streaming apps like Spotify and recruitment apps like LinkedIn.

Moreover, the popular mobile game, Clash of Clans, also uses this app monetization strategy on its platform.

4. Premium Subscription Model

Well, this is an app monetization model that you have certainly heard of.

A premium subscription model is something popular platforms use. And this generates a lot of revenue for them.

Here’s how this works:

• Mobile apps with a multi-tier subscription
• Subscription requires periodic payment
• Different subscription plans allow different levels of access

For example, we have all heard of the popular video streaming app Netflix. To access the content on this platform, you need to pay for a subscription to one of its plans.

On the other hand, there are dating apps like Tinder that allow users to access the plan for free. However, there are also several subscription packages based on a user’s requirements.

5. Affiliate Marketing

For those who don’t know, the term affiliate marketing refers to performance-based marketing strategies. It is a very powerful mobile app monetization method if done right.

So, what happens here is that two businesses decide to affiliate with each other, or in other terms, become partners.

Here, they will promote each other. In layman’s terms, each business tries to provide leads or customers to another.

For the business, the business compensates the other business, and so forth.

Quite simple, right?

Here are a few examples of platforms that use affiliate marketing:

• Amazon Associates
• Shopify Affiliate Program
• Airbnb
• Bluehost

All in all, this is an app monetization model that is quite popular these days. And it’s something that you should check out for your next mobile app project.

6. Data Monetization

Data Monetization is one of the major App Monetization Strategies. It refers to the process of selling user data, legally!

You can use user data licensing and a range of other methods to do this. Don’t worry, the data is not used for any unethical purposes.

The data is given to third-party companies for marketing and research. Amazing right?

And let us tell you, if you have a good set of data, it’s worth a lot.

Though the strategy is controversial, some of the biggest brands are using it. This includes:

• Google
• Social Media Apps
• Amazon
• Netflix
• Uber

The important thing that you need to keep in mind is to maintain transparency with users about their data.

Going through each of these strategies, you may be wondering, why not integrate them all to maximize the income? Well, that is just not possible, as there are several different pros and cons of implementing these strategies.

Check out the table below to quickly get a glance.

Now, let’s look at some of the most popular apps and how they make money.

Famous Apps & Their Monetization Strategies

Ever wonder how some of the dating apps, social media apps, etc, make so much money?

For instance, Instagram alone makes revenue in Billions. So, what’s the secret?

Well, here’s the app monetization some of the popular apps use.

How to Choose the Right Monetization Strategy?

Whether it is a basic app or something more technically advanced, here’s a process to choose the right app monetization method for your app.

• Understand Your Audience

When you plan to monetize your app, the first thing you need to do is understand the target audience.

Every application is primarily focused on a specific niche or service that is used by a particular group of people.

Based on the demographics of the people you plan to reach, you can easily identify what type of monetization will be ok with your users.

• Evaluate Your Product or Service

Based on your understanding of the audience, you must evaluate the service that you are offering through the application.

Knowing what it’s worth and how dependent a user is on your service can help you determine whether adding a premium to your app will drive users away or not.

If you opt for monetization without evaluating the value of your services or product, things may go south.

• Analyze Your Competitors

Before deciding what kind of monetization strategy to use, it is important that you check out your competitors.

Identify what strategies they have put in place and understand the mechanics of them. Your competitors are a live example of how your app may function. Hence, understanding what works.

• Consider Your Business Model

Before initiating your monetization of the app, you must consider the business model that your services use.

Make sure that the application monetization strategy you opt for aligns with your business model, making it understandable for the user.

If the monetization strategy in place does not align with the app, it can be difficult to convince your user to spend their funds or interact with features that can be monetized.

• Test Your Monetization Strategy

When you have identified the app monetization strategy you want to implement in your app, you need to identify the application’s potential users and how the monetization strategy will impact their experience.

Some of the core factors that you must consider while testing the mobile app include –

• Effort required to integrate a monetization strategy.
• Compatibility of the application with the dedicated strategy.
• Revenue potential with a set strategy for your mobile application.
• User experience is crucial, hence ensure that the strategy doesn’t affect it.

With all these steps cleared, you will be able to choose the right monetization strategy for your application.

Keep in mind that this is still a secondary income stream, with the primary one being your app fulfilling the reasons for which it was built.

Hence, always keep the mobile app design and functionality as a priority and make sure that the app monetization strategy you choose doesn’t compromise the app’s experience and functionality.

Bottom Line

App monetization is the key to making money with your mobile app. If all the information shared has left you confused, and you need assistance with the implementation of mobile app monetization, then the best way is to hire an experienced mobile app development company.

For instance, Nimble AppGenie is one of the leading names that not only helps you develop the application but also allows you to incorporate various monetization strategies for your application.

Hopefully, the post helps you understand monetization strategies and how you should choose the one for your business.

That will be all for this post. Thanks for reading, good luck!

FAQs

Niketan Sharma

Niketan Sharma, CTO, Nimble AppGenie, is a tech enthusiast with more than a decade of experience in delivering high-value solutions that allow a brand to penetrate the market easily. With a strong hold on mobile app development, he is actively working to help businesses identify the potential of digital transformation by sharing insightful statistics, guides & blogs.