How to Monetize Your Mobile App

How to Monetize Your Mobile App
August 25, 2018 Madeleine Helme

Apps are big business in 2018. You see people glued to their smartphones wherever you go. Research shows that 90% of the time we spend on mobile devices is spent within apps. Your customers are installing and engaging with brand apps, so entering this space could be hugely profitable.

We’ve already discussed the benefits of having your own app to help you decide whether this strategy is right for your business. While benefits like increased brand awareness and customer engagement can lead to increased sales and profits in the long run, you might be looking for an app to provide a more direct source of income.

How do you make sure that you secure a good return on your investment from building a mobile app? Here are a few popular monetization strategies businesses can use for their apps.

Paid apps

The most direct way to make money from your app is to have people pay to install it. Paid apps are available in app stores for as little as $0.99, but can also be much more expensive. The problem with this strategy is that there are so many free alternatives in the app store. You will need to show why your app is worth paying for over other free options.

Although you may get fewer downloads by offering a free app, your churn rate is likely to be lower. If someone has invested money into your app, then they are more likely to use it so their money has not gone to waste.

In-app purchases

If you opt to make your app free to download, you can make money by offering in-app purchases. Use of the app is completely free, but you have the option of enhancing your experience by paying for certain things. This is common in gaming apps where users can buy upgrades and in-app currency to unlock exclusive content, speed up events, or upgrade their character.

The benefit of this approach is that it does not exclude users that are not willing to pay to use your app. Some people will continue using your app for free, while others will part with their money to get ahead or earn more rewards.

Freemium models

Like in-app purchases, freemium apps are free to download and use, initially, but then offer more to the user once they pay a fee. This could involve creating a free version of your app with the basic functionalities, and a premium version that offers more value and features. People can use the free app as much as they like but must pay if they want to unlock the features available with the premium version.

The freemium model is a good way to get your user hooked on your app before they commit to paying. This removes the barrier to entry because people don’t have to pay to download the app. It also offers users the chance to try out your app before making a commitment, so they can judge whether or not it is right for them.


Subscription models are similar to freemium apps. This commonly involves offering a free trial of your app for a limited period of time. If someone wants to continue using your app after their trial period ends, they have to pay. You could offer a 7-day free trial of your app, then require a monthly payment to continue using it. Subscription apps generally offer multiple payment options, such as monthly or annually payments.

Like the freemium model, this allows users to try out your app to decide whether it is worth paying for. The hope is that after using your app the user realizes that they can’t live without it and must pay to continue using it.

In-app advertising

In-app advertising is a popular monetization strategy for mobile apps. With this strategy, it is free to download and use your app, but you sell ad space within the app to earn money from publishers. Offering your app for free helps you to gain a sizable audience, which is attractive to publishers.

If you opt for this strategy, you need to ensure that you do it well. If your ads are too disruptive to the user or aren’t relevant to them, it is likely to put them off. This will increase levels of churn. The ads you display should provide value to the user with relevant content. They should also be positioned in such a way that does not detract from the app experience.

These five app monetization strategies are all commonly used by app developers. It comes down to evaluating which one suits your app and your brand. Many apps are combining strategies. You could offer a free-to-use app with ads, for example, and then present the opportunity for users to pay to access an ad-free version of the same app.

If you are developing an app, make sure you plan how to earn back what you spent on it. Launching a free app and then adding in-app purchases or advertisements later can be a big turn-off to existing users. Be sure to implement your chosen model from the start.

After working in marketing for two years I decided to become a freelance writer. In my spare time I enjoy watching films and television and keeping fit through going to the gym and practising taekwondo.