How to Monetize My Mobile App?

monetize mobile apps

Due to advances in mobile technology, mobile applications have been gaining rising popularity. The number of mobile users, the number of downloads of some major apps and the amount of money they are making is amazing. Although, knowing how to get more users and downloads of your app is also extremely important, and we promise to share those insights with you some other time, today let’s talk money.

The means of making money from your mobile application is called app monetization and although there are a lot of strategies to accomplish that, before even thinking of monetizing your app, one should have a very clear picture of what your organization goals are, and if even one of them is to make money out of the mobile platform, the following strategies are crucial.

Here are some of the strategies that can help your mobile app make revenue, along with the pros and cons of each so you’re sure that you’re making an informed decision:

In-App Ads

Mobile advertising neared a $100 billion in 2016. This is one of the most common ways to monetize an application and that’s why it the first strategy to be mentioned here. Users do not pay to download or use the app therefore removes the cost-barrier initially, but the app can leverage itself to sell targeted advertisements towards users.

Three typical types of ads used in apps:

  1. Full Screen ads
  2. Notification ads
  3. Banner ads


  • Free! No initial barrier when downloading the app gives you the ability to gain more users
  • Mobile ads is a lucrative and growing industry and can be very effective if targeted correctly


  • Advertisements generally have the tendency to annoy the user, specially when it comes to mobile advertisements which can play a huge role in app churn
  • Since there is very limited screen real estate on a mobile, even a small banner can compromise the experience of your app if not put correctly

Also Read : How to Monetize Your Mobile Game Apps

Paid Apps

This is one of the simplest ways to make money from a mobile application. This means that the users pay to download the app, and although free apps can be great competitors, if one can show the value of the app, it can persuade customers to purchase it.

Applications like this work better if its for an organization that is well known and established and have a strong PR presence, otherwise its always better to monetize a free app.


  • Upfront revenue for developers with every new download
  • More engaged users since the app has been paid for
  • No advertising, therefore complete control over the screen real estate


  • Cost barrier comes into play for users, therefore limited downloads due to the competition from free apps
  • App stores take a cut of the revenue

In App Purchases

In app purchases, can be used in both free or paid apps. These include some extra features and additional content that the consumer may want to make the app experience better, that the user can unlock or purchase.

Applications who use this feature generally need to be very engaging towards to the users to have them make the most of the app by purchasing these in app features.


  • While making the experiences of the app better for the users, in app purchases also drive and enhance user engagement towards to the app, while making money
  • High profit margin


  • This model has had bad publicity recently due to the barely minimum regulations regarding in app purchases which resulted in accidental purchases by children mostly


Proven to be the most effective way to monetize apps, this is basically when the app is free to download and has most features that are free to use, but also has a premium version that must be paid for to access which has some important features lacking in the free version. This strategy’s advantage is that it allows the users to try out and use the app before paying for the premium version, if they want to.

With this type of an application, the freemium version must be attractive enough to encourage the users to purchase the premium version.


  • Users have the freedom to use the free app and form their opinions about it, before actually purchasing the app because of the freemium version if they want to enhance their experience


  • Not always is the freemium version good enough to convince the user to buy the premium and vice versa sometimes the premium version is just not worth the price

Affiliate Marketing/Sponsorship

This is one of the newer strategies when it comes to app monetization. Apps partner up with advertisers that interact with users and offer rewards to certain completed in-app actions. The app makes money by keeping a percentage of the revenue from the rewards and the affiliate gets information about user behaviour. This type of app doesn’t only make money but makes the users more engaged on the app with the help of the related sponsored content.


  • Since the content is relevant and related to the app, it will enhance user engagement, which is better for both parties involved
  • It’s a win win win situation! Developers make revenue, advertisers get more ad space and users benefit from free promotions


  • With all apps, comes a privacy issue of the user, most companies who work together in this type of a setting use and sell user information which the user might not be comfortable with

Transaction Fees on Services

If an app is simply delivering a service or operates as a marketplace it can make revenue out of that. The app essentially just needs to connect a resource to a demand, handle the transaction and then simply take a percentage of the transaction and since financial transactions regularly occur in these types of apps, its simply the best way to monetize your app. Uber is one of the greatest examples of a service app in todays world.


  • This is the simplest model out there. No need for advertisements, no need to charge a fee upfront. Just simple, charge a cut from either of the parties involved, or both.


  • High transactional fees. This is one of the problems with apps like these that they tend to charge a very high transaction fees, which most of the times is not justified because there is competition and there might be a lot of apps or companies giving the same service as you are, at a lower rate.

Acquiring and Selling Data

Some applications who can gain a lot of users can make use of this kind of strategy. This can be any kind of app which solely due to the vast number of users it has can make revenue. Most applications who have a huge number of users sell information about those users to other platforms or companies for huge sums of money.

Some similar apps on the other hand can hope to get acquired by bigger firms. Top examples of these types of apps are 2 major players in the app world, Instagram and WhatsApp that were acquired for $1 billion and $19 billion respectively.


  • One of the strongest ways to make money on this list


  • Need huge amounts of users to gain some valuable information or data which is very tough

User Retention

This is the most important strategy in this list when it comes to app monetization and I should be using this as more of a conclusion rather than just a strategy to make money since most apps are abandoned within the very first week of download. All the above-mentioned strategies are useless in the long term if the app fails to retain its users, therefore the most important thing to do to make money of an app is to retain users.

Retaining users isn’t an easy task and requires an in-depth analysis of users’ behaviour, buying pattern, demographic data, etc. and this can easily be done with the guidance of data analytics tools

A mobile app can help you reach your organizational goals, and with the help of these strategies for monetizing your mobile app you can help your business generate more app revenue than ever.

The future of mobile is being redefined. The days of heady hardware growth are long gone. Mobile growth is moving into media, advertising, software, services and every industry on this planet. Meanwhile, new devices are expanding the meaning of “mobile.”

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