Key Points

  • There are many creative ways to monetize an app, including download fees, subscriptions, freemium models, in-app advertising, affiliate marketing, in-app purchases, data monetization, and transaction fees.
  • Subscription-based monetization has become increasingly popular, with app revenue from subscriptions reaching $13 billion. 
  • In-app advertising is one of the fastest and most effective ways to monetize an app, especially for free apps. Various ad formats are available, including banner ads, video ads, native ads, interstitial ads, rewarded ads, and gamified ads.
  • With the decline of third-party cookies, first-party data collected through apps is becoming more valuable. Data collection is expected to be fundamental to most app monetization strategies in the future.

For publishers, apps serve two key purposes: getting your content in front of more people and bringing in revenue.

Most publishers have that first part down - it's the app monetization strategy that's tricky.

With several popular app monetization strategies to consider, which is right for your app? Let's find out.

Want to learn even more? Read the guide to learn everything there is to know about monetizing your app.

What's An App Monetization Strategy (And Which Are Best?)

An app monetization strategy is the plan an app publisher like you follows to generate a stream of revenue from the app in question. If that sounds broad, it's because it is. Your app can bring in revenue in dozens of ways, from in-app advertising and purchases to subscriptions and freemium models.

Each strategy has its pros and cons. Many successful apps combine multiple approaches to maximize revenue while maintaining a positive user experience. 

But to do that, you first need to know which app monetization strategies best fit your content, audience, and needs.

Why?

In short, different apps may need different app monetization options. A gaming app isn't the same as a news app, so you'll want your mobile app development strategy planned accordingly.

Discovering the right combination of monetization strategies is one part trial and error and one part research. And keep in mind that it is vital to work with an app developer or team of developers to build your mobile app from the ground up with your app monetization strategy in mind.

In this post, the app monetization team at Playwire helps with the research part. Below, we provide an overview of eight common strategic app monetization options.

These eight strategic mobile app monetization options can help maximize your app revenue:

  1. Monetizing Your App with a Download Fee
  2. App Subscription Model to Bring in Consistent Revenue
  3. Flexible App Monetization with ‘Freemium’
  4. In-App Ads to Leverage Your User Base
  5. Affiliate Marketing for Your App
  6. Monetizing Through In-App Purchases
  7. App Data Monetization
  8. App Transaction Fees
  9. Partner with Expert App Monetization Strategists

Let's get into it.

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App Monetization Guide

Want to learn even more? Read the guide to learn everything there is to know about monetizing your app

1. Monetizing Your App with a Download Fee

A download fee is a monetization strategy where users pay a one-time cost to download and use an app. For many publishers who are new to the mobile app space, charging a fee to download the app in the Apple app store or Android app store is the first mobile app monetization option they consider. 

This strategy can bring in substantial revenue - but only if you provide content that brings a lot of value to the end-user. Unless your content is difficult to find anywhere else, savvy users are more likely to find the content elsewhere than to pay for it inside an app store. 

For some publishers, however, this is the route to go. In particular, apps that offer a unique gaming experience or some kind of utility on the smartphone or tablet benefit from this monetization method. 

Still, the number of publishers charging money to download their apps is relatively low. As of October 2024, 95.27% of apps in the iOS store and 96.98% in the Google Play store were completely free to download.

2. App Subscription Model to Bring in Consistent Revenue

The subscription model is a monetization strategy where users pay a recurring fee (usually monthly or annually) to access an app's content or features. Instead of charging for the initial download, this approach focuses on providing ongoing value to users who pay regularly to use the app. It's a popular mobile app monetization strategy that has gained significant traction in recent years.

That popularity is evidenced by the sheer amount of revenue the subscription model generates for an app publisher. In 2023, app revenue from app subscriptions grew to $13 billion. And among the top 250 apps that were not games, subscription fees accounted for 82% of consumer spend inside non-gaming apps in 2022.

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Letterboxd App Case Study

Learn how Letterboxd increased year-over-year app revenue by 2,433% using Playwire's RAMP for app platform.

3. Flexible App Monetization with ‘Freemium'

The freemium app monetization strategy blends aspects of paid apps and app subscriptions with other strategies, such as in-app advertising. With the freemium app monetization model, you offer some of the features or content of your app for free but charge either a one-time fee or a recurring subscription to users who want the full experience.

One common example of a freemium app monetization strategy is offering a free app download but charging a fee inside the app to users who would like to use the app without seeing app ads. In a model like this, your paying users and non-paying users are monetized.

4. In-App Advertising to Leverage Your User Base

In-app advertising is a monetization strategy where you display ads within your app to generate revenue. It's like turning your app into a digital billboard, allowing you to earn money from advertisers based on your user base and their interactions. This method is often the fastest and most effective way to monetize an app, especially for free apps looking to generate income without charging users directly.

In-app advertising formats include: 

  • Banner Ads: A banner ad is an app advertisement delivered by an ad server to display in certain places within an app. Banner ads can target the user based on the user's data and preferences.
  • Video Ads: Video ads allow you to display video ads within your app, typically with options for both in-stream and out-stream ad types.
  • Native Ads: Native ads are designed to feel "native" to your app. A native ad blends with the design elements of your app and may even be designed to look like another post or feature within it.
  • Interstitial Ads: Interstitial ads are full-screen ads that appear between phases of the user's app experience. If the user experience includes selecting a video from a list of videos, for example, the interstitial ad might appear before a video loads.
  • Reward Ads: The basic idea behind reward ads is to give something to the user for viewing an ad. Rewarding a mobile game user with another try at a failed level if they watch an advertiser's video is a classic example of a reward ad.
  • Gamified Ads: Gamified ads are just what they sound like, ads that are mini-games, and encourage users to interact with them.

When choosing to monetize your app with ads, there are plenty of considerations, particularly around user experience to keep in mind. You can learn more about monetizing your app with ads in this in-depth article.

Playwire specializes in ad revenue amplification. Learn more about our App Revenue Amplification Managed by Professionals platform.

5. Affiliate Marketing for Your App

Affiliate marketing is a monetization strategy where you earn commissions by promoting other companies' products or services within your app. It's like becoming a digital salesperson, using your app as a platform to recommend and sell items to your users. This approach can be particularly effective if you have a large, engaged audience that trusts your brand.

In the mobile app world, you can do affiliate marketing in two main ways:

  • Partner with companies to sell their products. Many companies have affiliate programs that allow you to insert specialized links in your content or ads. When your users click those links, land on the company's website, and buy something, you get a cut.
  • Use affiliate ads to convince users to download other apps. The Apple, Google, and Windows app stores all offer affiliate programs that track when someone leaves your app after seeing an ad for another app and downloads that app. You get paid each time that happens.

Affiliate marketing can be extremely profitable, but it works best when you have a large audience that trusts your brand and content enough to take your recommendations of products and apps.

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App Monetization Resource Center

Browse our library of resources for all your app monetization options of tools and strategies.

6. Monetizing Through In-App Purchases

In-app purchasing is a monetization strategy where you offer additional content, features, or virtual items for sale within your free or paid app. This method allows users to enhance their app experience by making optional purchases, creating a revenue stream without charging for the initial app download. 

There are two main approaches to in-app purchases:

  1. Physical Products: Selling tangible items related to your brand or app, such as merchandise or branded products.
  2. Virtual Items and Features: Offering intangible digital goods, which can include in-app currency, extra lives or power-ups, exclusive content, customization, and even ad removal.

This strategy is particularly popular among gaming apps but can be effective for many different types of apps. It allows users to access basic functionality for free while providing options for a premium experience, potentially increasing user engagement and revenue.

7. App Data Monetization

App data monetization is a strategy where you generate revenue by leveraging the user data collected through your app. This first-party data is more valuable than ever. Advertisers are hungry for this kind of information because it allows them to target the right audience. 

And that hunger is likely to grow as third-party cookies stop delivering third-party data the way they used to. Collecting data will be the foundation for most app monetization strategies in the future. 

Data monetization usually works best for publishers with an established and thriving user base. If you don't have enough users to generate a lot of data, the data you do have isn't likely to be valuable.

8. App Transaction Fees

App transaction fees are a monetization strategy where you earn revenue by taking a percentage of transactions that occur within your app. 

This approach only works well for a highly specific type of app: an online marketplace. The definition of "marketplace" in this context can vary, but essentially, your users have to be buying or selling something within your mobile app, and you have to take a cut of each transaction. 

Good examples of apps monetized with transaction fees are easy to spot in the financial space. Cryptocurrency and investment apps commonly take a small fee each time a user buys or sells an asset.

Partner with Expert App Monetization Strategists

Not every app monetization platform or strategy works for all apps or all publishers. The expert app revenue amplification team at Playwire can guide you to the optimum app monetization strategy and spot opportunities and potential problems from miles away.

Ready to get in on this? We're ready to work with you. Discuss all your app monetization options and corresponding needs with an expert by contacting Playwire online. 

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