How to Monetize an App

Are you looking for ways to monetize an app? Maybe you already have an app and are looking to make additional revenue. Or maybe you want to create an app but are not sure where to begin. Regardless of where you are at, this guide will help you know more about mobile app monetization and various app monetization strategies, whether you have a game app, an e-commerce app, or a different kind of app. We will break down the app industry and trends so you can stay ahead of the curve. Then we will discuss the different models on how to monetize an app and how you can generate the most revenue.


What is Mobile App Monetization?

Monetizing your mobile app is the process of utilizing your app to make money. Sounds simple enough, but correctly doing it can get a little more complicated. There are several app monetization models. In most cases, mobile app monetization is based on the number of active users. Nowadays, most apps are free to download. So how are app developers and businesses going to make money? We know it is not cheap to create and maintain an app, and you need some way to bring in revenue.

A common mistake app publishers make is deteriorating the user experience of their app to monetize it. Usually, they clutter up the experience with advertisements which only frustrates the user. Eventually, this causes the user to stop going onto the app and maybe even delete it. Not an optimal situation for either the user or the app creator. How to monetize an app is a balance between maximizing revenue and maintaining and growing your user base.

Are you seeing how it is a bit more complex than just making money from your app? In fact, depending on the category your app falls in, certain monetization strategies are better than others. We will get into those a little later. Your goal for how you monetize an app should be to pick the optimal monetization strategy so your users keep coming back with the money following.

Monetizing Apps Industry and Trends

Before we get into exactly how to monetize an app, let us look at the market and future projections. Spoiler alert, it is going to be really impressive stuff and there is a lot of money to be made.

In 2020, worldwide mobile app revenue totaled $580 billion and this trend is only going to grow. By 2023, it is predicted the market will bring in $930 billion. Mobile app usage is continually growing and consumer preference is moving towards apps instead of web-based.

How to Monetize a Free App

Free to download apps are becoming the norm with most developers shifting to this because users are reserved to initially pay upfront. That is where monetizing apps becomes difficult. Many mobile brands say the biggest challenge is providing non-intrusive advertisements for revenue without churning their users.

Future of Mobile Apps

The future of mobile apps is looking very optimistic with more app downloads every year. However, this also means more competitors each year. Stay ahead of the competition by providing your customers with an app that serves their needs without diminishing the overall experience. Higher customer satisfaction will lead to higher revenue.


How to Monetize Apps: App Monetization Strategies

We are now at the point you were looking for. How to monetize an app and bring in the extra dough to your business. There are multiple monetization strategies to consider so think about what makes sense for your app and business. Some apps even utilize a mixture of strategies. But most importantly, do not forget to recognize your customers’ needs and the experience they will go through. Let us get into exactly how to monetize apps.

In-App Advertising Monetization

You might want to monetize app with ads. This is the most popular and obvious way for app owners to generate revenue. This strategy is probably the easiest and quickest to implement but it does come with drawbacks. Most users find these advertisements cheapen the experience with the app. Consumers have even said it gives the app an unprofessional look and feel. Some might even think that your app is in it only for the money. On the contrary, without this strategy, many apps would not exist. If you go down this route, you should consider subtly incorporating them into your app.

Banner Ads

Banner ads are the most common in-app advertising and a quick way to earn a buck. Let us be frank, banner ads are not the prettiest to look at, and an app ad can be distracting. Since they take up a small portion of the screen, most advertisers will not pay that much for the real estate. Not to mention, they also generally have a low engagement rate.

Interstitial Ads

These ads could be a better alternative to banner ads. Interstitial ads or full-screen ads appear between user flows or at pause points. A few examples are moving between menus, loading screens, and at the end of an experience. These ads can be less intrusive but you will need to understand where best to place them in your user experience.

Native Ads

For the most seamless way to monetize an app, native ads blend into your content. These ads are most commonly used by apps that have a feed or timeline. As customers are scrolling through, these ads are scattered throughout and give the user a more native feel.


Use Subscriptions to Monetize an App

Many of today’s businesses are adopting a subscription model. Think about how many different brands you are subscribed to. We bet it is a lot. Many apps are using subscriptions as an effective method of obtaining recurring revenue while keeping the download free. With that all being said, subscriptions can be a great way to monetize apps. You can always consider becoming a paid apps.

Most subscription strategies involve a free trial period for the customer to use all or some of the features of the app for a period of time. Once it is over, the customer will need to pay the subscription fee to keep using the app. Many businesses love this model because it is easy to predict and keeps active users coming back. The catch though is that apps with this strategy require a lot of upfront and maintenance costs. You do not want your app to become stale that customers cancel their subscriptions.


A subset of the subscription model is a freemium or premium version. A freemium app offers a free model to all users but contains limited features or may include ads compared to its premium version for purchase. Spotify and Tinder are great examples of this monetization strategy. If you are having trouble keeping customers paying a subscription fee, this may be the model for you. You still have the recurring revenue from more loyal customers paying for the premium version of your app, but you do not lose out on the number of active users.

Additionally, subscription tiers are becoming more common within this model. Some apps have free, standard, and premium versions all priced differently and varying in features.

Monetizing Apps with In-App Purchases

This is another app purchases model. Similar to a subscription model, in-app purchases are another discrete way to monetize an app. By allowing users to purchase selective content, services, or features, you can receive additional revenue from your app without tarnishing the user experience. Repeat, do not tarnish the user experience. Offering in-app purchases need to make sense and compliment your app. The app should not be so restrictive that users need to make purchases to use it. Let the user feel like they are earning something exclusive when making the purchase.

Sponsorships and Partnerships to Monetize an App

Two heads are better than one. In this case, two brands are better than one. Sponsorships or partnerships can help step up how to monetize an app. Before you start reaching out to every brand you can think of, consider these suggestions when selecting your business partner.

Find a business with a similar customer base as your own. They should not be a direct competitor though. You and your partner are collaborating together for a mutually beneficial relationship. For example, you own a travel app with reviews on restaurants and activities. Hotels like Marriot will want to partner with you and promote their offers on your app. If you are lucky enough, they will even promote your app on their media.

By having reputable brands vouch for you, you build trust and reliability in the eyes of your present and future users. Sponsorships and partnerships are a great way to enhance the exposure of both brands.


Monetize an App the Right Way

There is no perfect monetization strategy. No one strategy will guarantee you maximum profits or the most active users. It all depends on your own app, business, and what you are trying to accomplish. Most apps utilize a hybrid approach and combine aspects of different strategies together.

As you figure out the best way to monetize your app, ask yourself these questions. What draws users to your app? What differentiates your app from the others? Would customers be willing to pay for something on your app and for how much? What is the most important objective you are seeking? What are you trying to accomplish for your ideal app user?

Browse your favorite apps in the app store and see what makes them great. If your competitor has an app, evaluate it and see how you can improve it for your own business. Once you create an app with a great user experience, monetizing it will not be so hard. Maybe you have an idea but cannot bring it to life. SEO Design Chicago leads the charge when it comes to mobile application development.


  • How can an app make money?
  • What are trends in the app market?
  • Can a free-to-download app make money?
  • What kinds of advertisements can be included on an app?
  • What kind of monetization models do apps use?

Contact Us Today!

Call Now