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A Guide to Mobile App Monetization

A Guide to Mobile App Monetization

Having a mobile app monetization strategy is key to generating revenue within your mobile app. Ever since the launch of the App Store in 2008, the mobile app market has been growing steeply with a projection of hitting $1 trillion in revenue in 2023.  

Despite the continuous growth of the app market, it might be surprising to learn that less than 0.01% of apps are financially successful through to 2018 and even fewer apps have an app monetization plan. This often can be attributed to usability issues, poor marketing, and most commonly, lack of monetization strategy. Hence, the key to the long term success of your app relies on having a monetization plan rather than simply developing an app that “works”. 

So how do I monetize my app? Here are 5 commonly used ways to get your creative juices to start flowing:

1) Mobile App Monetization – In-app advertising

In-app advertising is the most popular revenue stream for a free app because it allows your app to be completely free to the users. Free apps appeal to more users to download them and hence bring in more advertising revenue. To generate profit through in-app advertising, ensure your ad content is relevant so that it generates interests instead of irritating your users. A wise way to implement in-app advertising is to keep your audience in mind when choosing the content and form of your ads. For example, a fitness app can choose healthy meal plans ads rather than fast food delivery ads as healthy meal plans are more likely to be desirable by fitness app users. This not only keeps your customer experience in mind but also generates more “hits,” aka revenue. The biggest drawback of ads is that it can clutter up the user interface and negatively affect the user experience. It is important to use in-app ads wisely, or your users might leave.

2) Mobile App Monetization – App sales

When you sell your app on the Play Store or Google Store, the user has to pay an upfront fee in order to download your app. This provides an instant revenue as soon as your app is downloaded, and your users tend to be more loyal since they have paid for the app. However, it is less likely that a user would be willing to pay an upfront fee to download an app as many other apps are available for free. In addition, both the App Store and Google Store charge 30% of your profit in the first year, and 15% after that. In order for your app to successfully adapt a premium app sales model, high quality and performance are required. 

3) Mobile App Monetization – Freemium model

A freemium model is a combination of “free” and “premium.” A free version of the app is available to users for free, and users can pay a one-time or subscription fee to access the full functionality of the app. One of the benefits of this model is that it promotes user engagement. Once a user has paid for the app, he or she tends to invest time in using the app, and becomes loyal customers.  Additionally, the freemium model provides stable income. As a result, this model is becoming more and more popular. However, keep in mind that the portion of users who are willing to pay for the upgrade is relatively small. Hence, the freemium model works best when the app itself is compelling with great functionality and user experience. 

4) Mobile App Monetization – Data monetization

In this data era, the user information collected through your app is valuable to companies. Data monetization is conducted through collecting, processing and transferring non-personal user data from your app to a data collector, such as advertising or research companies. Something to keep in mind when it comes to data monetization is the more Daily Active Users (DAU) your app has, the more likely your data will be appealing to data collectors. Typically, you need to reach at least 50,000 DAU to get into data monetization. Additionally, always ask for user permission when collecting data and ensure that the data collected are non-personal. 

5) Mobile App Monetization In-app purchases

This method is popular for mobile app monetization within mobile games, where players purchase virtual currencies or other virtual goods, allowing them to gain an advantage over their opponents. In order to implement this method, you need to ensure an adequate number of players of the game, including non-paying players, so that players have an incentive to purchase the virtual goods within your mobile game. Remember Apple and Google will take their cut for all virtual products! On the other hand, in-app purchases of physical goods and services account for 80% of all commerce conducted on mobile devices according to the Apple App Store. Successful examples of such apps include Uber and Lyft. 


Every app is unique. Consider your target market and competition when choosing which mobile app monetization method to use. To maximize your profit, get creative, and combine multiple monetization methods! An example of this could be using in-app ads along with in-app ads and in-app purchases. Most importantly, align your monetization strategy with your marketing strategy, and never stop to learn and adapt!

Contact Vog, a trusted Canadian App Developer to learn more!