As an app developer or publisher, it is important to know the different mobile app monetization models that can help you make more money. You definitely wouldn’t want to spend your time developing a mobile app and not have people make use of it.
In February 2022, iOS users downloaded more free or freemium apps. Additionally, approximately 88% of finance apps adopted the free model, while those that adopted the freemium model were 11.5%.
Following these statistics, it may seem like the freemium app monetization model is more viable than the others. But is this really true? We will find that out later on.
In this article, we will not only look at effective mobile app monetization models but also explain why app monetization is important and the best app monetization platforms to try out.
What is Mobile App Monetization?
Mobile app monetization is simply making money from mobile apps. This can be achieved through various strategies like in-app purchases, subscriptions, sponsorships, or in-app advertising.
Without this process, it may be impossible for app developers or publishers to generate revenue for every app they produce.
What Are Mobile App Monetization Models?
Mobile app monetization models are various strategies and plans you put together to ensure that your mobile app is profitable. As an app developer or publisher, you’ll have to combine effective mobile app monetization models for better revenue generation.
According to Zipdo, about 21% of app developers consider in-app purchases as their primary mobile app monetization model. This is because of the revenue they’ve been able to generate with this strategy.
So, as an app developer, you’ll need to choose the right mobile app monetization models. Before doing so, you’ll have to consider your target audience, as this will help increase user satisfaction and profitability.
Why is Mobile App Monetization Important?
Your mobile app can be more than just a tool people use to keep themselves busy. It can be a source of income for you and your company. Do you remember the ad that popped up while you streamed a movie on YouTube? That right there is YouTube’s strategy to earn more money.
Aside from making money through your app, using mobile app monetization models is important to sustain it. You can use the money earned from monetizing your app to cover some costs and make further investments.
It can also be used to improve the general user experience of the app, thereby improving brand reputation and customer loyalty. Trust me, if you do not make money from your app, it will likely shut down faster than expected, except if you take creating apps as a hobby.
How To Monetize A Mobile App?
According to Statista, the number of free apps on Google Play Store and Apple Store is higher than paid apps. This statistic already shows that the freemium challengers are going all out to get people to patronize them.
So, to stay ahead of the game as an app developer or publisher, you’ll need to make your app free to download. However, you can introduce a monetization model after the user has built a connection with your app.
To do this, you’ll need to know the different mobile app monetization models available. We will talk about them in the next section.
4 Best Mobile App Monetization Models You Should Try Out
Are you wondering how mobile apps make money? Below are various mobile app monetization models you should try:
- In-app monetization model
- Subscription monetization model
- Advertising monetization model
- Paid Apps monetization model
1. In-app Monetization Model
This mobile app monetization strategy is also called in-app purchases(IAPs). It is the most common mobile app monetization model available when compared to ads and paid app monetization models. It accounts for 48.2% of mobile earnings.
In-app purchases are mostly used by mainstream e-commerce businesses and mobile gaming apps to generate revenue. How exactly is this achieved? For example, you’re streaming a movie on Reelshort; suddenly, a notification pops up that you should buy coins to access the remaining episodes. If you don’t do this, you’ll be restricted from seeing more episodes.
This can be frustrating sometimes, but it is the app’s way of making money off you. As a developer who would love to use this strategy, you must make the price for the purchase affordable and optimize the process to make the user comfortable.
Pros
- IAPs increase the loyalty of your customers to your app and their commitment
- It increases your customers’ engagement with your app
- In-app offers different pricing options
Cons
- This mobile app monetization model requires a significant amount of customers to make reasonable cash
- Customers who liked using your app for free may tend to stop using your app once payment is involved
2. Subscription Monetization Model
The subscription model is one of the fastest-growing strategies used in businesses. According to Mediamakersmeet, by 2025, the subscription economy is expected to reach a market size of $1.5 trillion. This growth trend showcases how the public responds to subscription plans.
Many developers or brands use this model to get users to sign up for a plan to access more features on their freemium app. A freemium app is an app that is usually free to download but offers more features that can only be accessed after a certain amount is paid.
Your app’s subscription plan can be weekly, monthly, or yearly. You can also make your plans tiered, meaning the lesser the amount to pay, the fewer features you get access to, and vice versa. For this model to be effective, you’ll have to keep offering value to your customers and prioritize their needs.
Pros
- This model increases user engagement
- It steadily produces income
- The subscription model can increase your annual recurring revenue
Cons
- The model can make your customers resistant to using your app
- It requires constant update
3. Advertising Monetization Model
If you’ve ever asked how free mobile apps make money, this is definitely the strategy used. The advertising monetization model involves displaying ads within an app as a user is using the app. This model is best for brands who want to remain free in the app store.
One outstanding benefit of this model is that it allows app developers to make some cool cash without having to charge their customers directly. However, to get the required result, you’ll need to place ads during breaks in the content or at the end of a game.
This will help prevent your customers from abandoning your app. There are various ad formats you can try out within your app. Some of these formats include interstitial ads, native ads, video ads, banner ads, and playable ads.
Pros
- It provides more monetization opportunities for developers and advertisers
- This model can help keep your audience informed and educated on certain products
Cons
- This model can only thrive based on your brand niche
- Ad-blocking technology is now available to block ads while using an app
4. Paid Apps
This monetization model helps app developers make money by charging users a certain fee before downloading an app. This might seem like the easiest model to try out because all you need to do is decide on the amount your customers get to pay.
However, convincing them to pay for the app upfront is the real challenge. Additionally, this model will work best if the app to be downloaded is unique and popular on the market.
Pros
- It acts as a direct source of income for developers
- This model is easy to implement
- Paid apps reduce the stress of trying to make money in-app monetization model
Cons
- Getting customers to pay for an app can be difficult
What Are The Best Mobile App Monetization Platforms?
To monetize your mobile apps, you’ll have to make use of mobile app monetization platforms like:
How To Choose The Right Monetization Strategies?
Before deciding which mobile app monetization model is best for you, you’ll have to:
- Understand your target audience
- Research various monetization models
- Consider your business model
- Evaluate the products and services you’ll be offering
How Do Mobile Payment Apps Make Money?
Mobile payment apps make money through transaction fees, subscription services, and selling financial services like Bitcoin. Some of these apps also make money through subscription and advertisement models.
How Much Money Do Mobile Apps Make?
The amount of money a mobile app can make depends on the niche. Mobile games make nearly $300 billion, and social media apps make $46 billion. In 2025, mobile apps are expected to make $613 billion.
Conclusion
To achieve a plausible result, we advise that you make use of different mobile app monetization models. To do this, you’ll have to combine two monetization models that complement each other. This process is known as hybrid monetization model.
You can combine the subscription and advertising monetization models. Doing this will give your users more choices while using your app. Additionally, using the right strategies will increase user experience and also enable you to earn more.
Mobile App Monetization Models(Frequently Asked Questions)
1. What Are Mobile App Monetization Models?
Mobile app monetization models are different strategies you can use to make money from your mobile app development business.
2. What Type Of App Makes The Most Money?
The apps that generate more revenue are gaming and gambling apps, health and fitness apps, dating apps, and social media apps. So, if you’re thinking of app development business ideas, you can look into any of these industries.
3. How Do I Monetize My Mobile App?
You can monetize your mobile app by using various monetization models like:
- In-app monetization model
- Subscription monetization model
- Advertising monetization model
- Paid Apps
2 Comments
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