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7 Monetization Models to Increase Your Mobile App Profitability

7 Monetization Models to Increase Your Mobile App Profitability

The mobile economy is booming rapidly. There are already more than 8 million apps in the main app stores i.e. App Store & Google Play. Global revenues from apps are projected to reach over $76 billion by the end of this year (Source: Business of Apps), however, only 2% of app developers account for 50% of all app monetization revenues. s

Now the billion dollar question is, how to monetize an app or mobile game to make profits? There are many ways to monetize mobile apps, however, you need to find the right one that best suits your business needs. Today we will take a close look at different app monetization strategies to help you get an idea about them and choose the right one for your app.

How to choose your app monetization model?

Before you finalize your app monetization model, ask yourself these following questions:

What benefit does your app provide? What problems does this solve? Who needs it? How often can it be used? The answers will be based on the value your app offers – which is a key thing when choosing an app monetization model.

What unique features does your app provide? Could it be an incentive for users to pay for your mobile app?

Which app monetization models are used by your direct competitors? What are their unique qualities and values? Competitive Analysis will help you identify your niches and choose the best app monetization model. The final question to ask yourself is how do you get a significant number of downloads?

Without a growing user base, there is no app monetization. What is a user acquisition strategy? Think about your users’ acquisition costs in advance and choose the appropriate revenue generating a model with the cost you will have.

App Monetization Models

There are a number of app monetization models available for all type of businesses. Let’s see what they are:

1. Free with In-App Advertising

This app monetization model is the most commonly seen in smartphone apps, the company gets rid of the cost barrier and allows free downloads. It aims to gather information about the people using the app along with a good user base so that this data can be sold to app publishers who then place specific ads in your app. By selling the data-driven advertising space, you make money easily.

in-app adds

2. Free with In-app Purchases

This app monetization strategy involves the selling of virtual or physical goods within the app itself which helps the company to yield profits. There is a huge variety of consumer and virtual goods which are being sold through in-app purchases. You use your app as a sales channel or a mobile storefront in this strategy.


 3. Premium / paid apps

Paid apps are the original app monetization model that first appeared in the mobile market. It works simply: businesses publish their apps on the stores, the users pay a fixed price to install it, businesses get 70% of profit, and the app stores take the rest.

paid apps

4. Sponsorship (Incentivized Advertising)

Being the mobile world’s one of the newest means of app monetization, it asks for partnering up with advertisers who reward your user when they complete specific in-app actions. In order to be a part of the incentive system, agencies and brands pay up and you take a share of the revenue from the rewards redeemed by users. Your app is able to engage users better while you include advertising in your app.

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5. Selling Data

If your app collects big data on customer habits or preferences then it’s likely that these data are of value to other companies whose products depend on knowing what people want and do. There are many apps who collect important data from you and sell them to businesses like if you are searching for insurance, you provide your contact details, income details, and other things. These details are helpful for banks and aggregator apps to sell this data with them. In turn, your business gains another source of app monetization. However, it is mandatory to ensure that no data is collected from mobile app users without their consent for the same.

sell data


6. Upgrade Plans

There are many apps who offer a free and basic version and users can upgrade their plans for better features.

Many SaaS– (Software as a Service) based products utilize the freemium app monetization model.

For example, the cloud-based file hosting service Dropbox offers new users 2 GB of free storage alongside premium options that allow users to buy additional space.

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upgrade apps App Monetization Models

7. Paywalls (Subscriptions)

This app monetization model is similar to freemium apps, except that it’s the content instead of the features which are locked. A specific amount of content can be viewed for free after which the user needs to sign up for a paid subscription to view more content. Service-focused apps can do well with this app monetization strategy and earn recurring revenue.


So, which app monetization model are you looking at? Remember that you may need to implement and invest in a number of methods simultaneously to get the best results. The upgrade model, for instance, is a great way to market your app if you’re launching in on Android. Statistics prove that this model is especially successful on the Android platform while iOS is preferable if you need to launch a paid app. Your decision to launch an app can be influenced by different factors – however, don’t forget to focus on the basics first.

To make sure your app is working fine or to build your app, you need to hire an IT outsourcing company. ValueCoders, a mobile app development company offers iOS and Android app developers to clients across the globe.

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