7 Mobile App Monetization Strategies to Consider for Maximized App Revenue

Have you ever wondered how mobile apps manage to be profitable, especially when so many of them are free to download? 

In the fast-paced and competitive world of app development, finding effective mobile app monetization strategies is crucial for success. With a multitude of apps fighting for user attention, you as a developer need to employ innovative and user-friendly methods to get the most revenue out of your app. 

That said, this blog delves into seven key mobile app monetization strategies that have proven effective in the app industry. From in-app advertising to creative merchandising, we’ll explore how these methods work and their impact on both the user experience and app revenue. 

Let’s begin.

1. In-App Advertising

In-app advertising is a popular way for app developers to make money. This method involves showing ads within an app. 

There are different kinds of ads like Banner Ads, which are small and usually at the top or bottom of the screen; Video Ads that users watch to get rewards; and Native Ads, which blend in with the app’s content.

Now, let’s understand these Ads types one by one.

Banner Ads

Banner ads are the most common way for mobile apps to make money. These are advertisements that appear at the top or bottom of an app’s screen. The banners are usually rectangular and don’t take up much space, so they don’t get in the way of the app’s main content to disrupt user experience.

While using an app, you might see these banner ads changing or showing different products or services. In case you tap on the ad, it will take you to the advertiser’s website or app to show more about what they’re selling.

The positive about banner ads is that they are not too distracting. They let you keep using the app without interrupting what you’re doing. App developers like them because they can make money every time the ad shows up or when someone clicks on it.

But, if you place too many ads or if they don’t align with the interest of the user, they might annoy them. So, apps need to use banner ads carefully so that the app stays convenient to use for the user.

Video Ads

Showing Video ads is another way mobile apps make money. 

So, what are these? These are short videos that play inside the app. You might see them while playing a game or using an app. They usually last about 15 to 30 seconds.

There are different times when video ads can appear. Some apps ask users to play in between levels in a game or while accessing a new part of the app. Other apps might ask for a video play only in exchange for a reward in the app, like extra game lives or points.

The thing about video ads is they are more noticeable than banner ads because they take up the whole screen and are, of course, engaging. So, they get the full attention of the user. But similar to banner ads, if there are too many or they play too often, they can be annoying for users.

Native Ads

Native ads are a type of online advertising that blends seamlessly with the surrounding content, unlike traditional banner ads that stand out as separate entities. They are designed to look and feel like the platform’s native content.

For example, In-app listings where Shopping apps often use native ads for product listings. Sponsored products can blend in with regular search results or recommendations, showcasing relevant items alongside organic ones. This allows brands to reach users actively searching for similar products.

2. In-App Purchases

In-app purchases (IAPs) are another way for apps to make money. This is when users buy something inside an app. There are different kinds of In-App Purchases: Consumables, like game coins; and Non-consumables, like a new feature.

IAPs are great because they let users choose to pay for extra features or content. But, it’s important to balance this so the app remains fun for everyone, even for those who don’t pay. Besides, you should make sure that IAPs add value and are fairly priced.

To encourage users to buy, apps can show what benefits they’ll get. It’s also good to remind them about IAPs at the right time, like when they’re enjoying the app most. Successful apps often have examples of how IAPs can make the user’s experience better. This way, in-app purchases can be a win-win: users enjoy more features, and developers earn handsome money!

3. Subscription Models

Subscription models are a way for apps to earn money by letting users pay regularly, like every month or year. This method is often used in apps that offer services, like music or video streaming, or special features in a game or tool.

There are different types of subscriptions. In a Freemium model, the basic app is free, but users can pay for more features or content. In a Premium model, users pay for the app first so that they can start using the app.

The key to a successful subscription model is to keep users happy so they continue paying the subscription. This means regularly adding new, exciting content or features. This will keep users interested in fresh content and make sure users feel their subscription is worth the cost.

4. Paid Apps

Paid apps are straightforward: users pay once to download the app, and then it’s theirs to use. This model works best for apps that offer unique value or special features right from the start.

The key to success with paid apps is setting the right price. It should be fair for what the app offers. Too high, and people might not buy it; too low, and it might not make enough money. Developers often look at similar apps to decide on a good price.

One downside is that some users may hesitate to pay before trying an app. To help with this, developers can offer a free trial or a demo version. This lets users see what the app can do before they buy it.

Still, the number of publishers charging money to download their apps is relatively low. As of March 2021, 92.9% of apps in the iOS store and 96.7% in the Google Play store were completely free to download.

5. Sponsorships and Partnerships

Sponsorships and partnerships are when an app teams up with a company or brand. This can be a good way for apps to make money while adding value for their users.

Finding the right partner is key. The partner should match the app’s theme and audience. For example, a fitness app might partner with a sports brand. This kind of match can make the partnership feel natural and useful to users.

These partnerships can work in different ways. Sometimes, the partner’s brand is shown in the app. Other times, the app might include features or content created together with the partner.

The benefits of this strategy include getting financial support and reaching more users. But, it’s important to keep a balance. The partnership should not take away from the app’s main purpose or bother users.

6. Crowdfunding and Donations

Crowdfunding and donations are ways for apps to get money directly from users or supporters. This method is often used by apps that are just starting or have a unique idea that people or a community of supporters are excited about and are willing to help.

Crowdfunding is when an app asks many people for small amounts of money to build the app. Platforms like Kickstarter or Indiegogo are popular for this. The app usually offers rewards to people who give money, like early access or special features.

Donations are simpler. Users just give money to support the app. This works well for apps that are free and don’t want to use ads or sell things. Apps can politely ask for donations and explain how the money will help.

Merchandising and Physical Goods

Merchandising and selling physical goods is another way for apps to make money. This means making real-life products related to the app, like t-shirts, mugs, or toys, and selling them to users.

This strategy works well for apps with popular characters or themes. Fans of the app might want to buy these products to show their love for the app. It’s like taking a piece of the app into the real world.

To do this well, apps need to think about what kinds of products their users would like. They also need to make sure the products are of good quality, priced right, and accessible to their users.

Conclusion

The journey of monetizing a mobile app requires a careful balance between generating revenue and maintaining a positive user experience. We’ve explored seven effective strategies in this article through which app developers can ensure a steady revenue stream.

Each strategy has its unique advantages and challenges, and the choice largely depends on the app’s nature and target audience. Remember, the key to successful mobile app monetization lies in understanding your users’ preferences and behaviors, providing value, and maintaining transparency and fairness.