The Different Methods for App Monetization

Written by Marc Alringer

It’s been a decade since the launch of smartphones and the mobile app industry still has tremendous room for growth. Every day, search engines are flooded with questions such as, “How to Build a Mobile Application?” and “What is the Cost of Building a Mobile Application?

The reason the keywords “mobile application” rank so highly in search engine results is no mystery. The mobile app design and development industry is a billion dollar industry. Large enterprises and startups alike are looking for ways to offer their users a mobile experience.

When companies create a mobile app, it’s not only a value add for their users, but it opens up the opportunity for new revenue streams. Almost any mobile application can be turned to a great revenue source if monetization is properly incorporated. Monetization does not just mean adding a business model and charging your customers to download your app. There are a few tried-and-true methods for earning money without ever charging your customers a penny. Yes, this is how the smart digital businesses of today make money.

white iPhone on a notebook beside a laptop

A well established app monetization strategy helps your business earn revenue without interfering with the user experience. The monetization strategy should be seamlessly embedded into the application to avoid frustrating and discouraging users.

Below are some of the best methods for monetizing an app:

  • Freemium Model: This is one of the most common methods for monetizing an app. This enables a user to download your app for free, but pay for additional functionality if they chose to. At the time a user downloads your app, they have access to a limited number of features, but they can pay a premium price to gain access to additional features.
  • Ad Revenue: Ads, though cheaper, can help your business prosper in the long run. All you need to do is find brands whose products or services are in line with your brand’s voice. Utilize appropriate ad placement in your app and your mobile app is now your cash cow!
  • Stitched Ads in Video: If your app contains videos for your users to consume, you can try stitching ads into your videos. Make sure that you do not integrate a “skip” option for the users. This way, they will have to view the complete video ad, which contributes to your revenue stream. Make sure your ads aren’t so long that they cause users to stop using the app, though.
  • Eliminating Ads: Consider YouTube for example. It allows the users to access millions of videos for free. However, this “free” content comes at the cost of viewing ads. In order to appease their users, YouTube allows users to subscribe, for a fee, to YouTube Red and indulge in the massive amounts of content without ads. Introducing ads and then charging your users to remove them is a popular monetization strategy.
  • Combined App Monetization: This has been proven as the best way to generate revenue from an app. In the combined app monetization tactic, you can leverage all of the above mentioned techniques and see what works best for your app. Even if one of the strategies does not meet the mark, you can still rely on another strategy. Implementing more than one technique is common and it increases the likelihood of generating larger revenues.

Points to Keep in Mind Before Choosing Any App Monetization Method:

  • Know who you are targeting in terms of demographics
  • Leverage heatmaps to keep track of your users’ behavioral patterns
  • Understand your users’ interests and how often they use mobile apps
  • Incorporate social media channels into your app
  • Make sure that the app monetization does not become an obstacle for your users
  • Keep track of installations and uninstallations
  • Ensure that your app runs smoothly on all devices and all screens

Remember, the most important factor that drives revenue to your app is the level of customer engagement. The content you publish on your app must be engaging enough to keep your users coming back for more. Your monetization strategy will also be heavily influenced by how well your mobile app is developed. If you are still planning to go digital and do not have an app in place,  there are an enormous amount of resources available to help you understand the mobile app ecosystem and what it costs to build a mobile app. In other words, your mobile app development decides which monetization strategy is best.


If you’d like to learn more about tech and the latest trends, check out our other posts and subscribe to receive weekly blog updates. To inquire about any custom application design or development, please contact us.

Author – Bio

Shahid Mansuri

Shahid Mansuri Co-founded Peerbits, one of the leading mobile application development company USA, in 2011. His visionary leadership and flamboyant management style have yield fruitful results for the company. He believes in sharing his strong knowledge base with leaned concentration on entrepreneurship and business. Being an avid nature lover, he likes to flaunt his pajamas on the beach during vacations.

Web: https://www.peerbits.com
Twitter: https://twitter.com/shahidmansuri
LinkedIn: https://www.linkedin.com/in/mansurishahid
Facebook: https://www.facebook.com/shahidmansuri
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Marc Alringer
Written by
Marc Alringer
President/Founder, Seamgen
I founded Seamgen, an award winning, San Diego web and mobile app design and development agency.




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