Making money from your mobile app comes down to using one or more revenue-generating strategies after users have downloaded and started using it. This usually applies to free apps and involves strategies like ads, in-app purchases, subscription models, or deals with other businesses.

In this post, we will give you 5 top strategies to make money from your app. No matter which method you choose, your goal is to increase earnings without ruining the user's experience with the app.

Don't forget to optimize your app's listing in app stores to support your monetization efforts and unlock your app’s full earning potential. Doing this well reduces user acquisition costs, which is always good for your ROI and the bottom line.

Top 5 app monetization strategies

Just to be clear, there are more, but these are our top 5. The order and selection are purely editorial—we’re not trying to promote one way over the other because they all have their time and place. Before you skim through the article and say “where’s affiliate marketing?”, we have an answer: it deserves its own article. Stay tuned!

1. Freemium and subscriptions

Loads and loads of apps opt for this monetization model to kick things off. The idea is to give the user a taste of what the app is all about, and then prod them into getting an even better deal—for a price. Spotify, Duolingo, Evernote, and many others are an example of this model being a success.

Use a subscription model to make users pay for your app; it’s a tried and true method. Offer a free but limited version to lure them in, and then hit them with ads or lock them out of the best features until they pay.

Give them a taste with a free trial if you want. Just make sure to charge them before they get too comfortable.

Read up on retention tactics to keep users hooked. It not only lowers entry barriers but controls customer acquisition costs too.

Basically, it goes like this:

• Basic version: Serve the users the basic features, but withhold the good stuff so they’re tempted to upgrade.
• Advertising: Flood the free version with ads (within reason); they’ll pay to get rid of them. And you'll earn from ads in the meantime.
• Limited-time access: Show them everything, then take it away. They'll miss it enough to pay. Not the best approach in terms of how user-friendly it is (we all have our circumstances in life), but it’s a tried sales tactic. During this period, be sure to show off the premium perks.

Know what others charge and don't overdo it. Have different plans for different people and make it affordable—but still worth your while. Knock a bit off the annual fee too, otherwise, there’s no point in committing.

2. In-app purchases and cosmetics

To earn more from your app, push users to spend inside it, either by buying stuff or upgrading to the premium version. In-app purchases are everywhere, notably in games. They're a goldmine when placed right to give players an advantage or gamify the entire system. Duolingo springs to mind yet again, with Duolingo gems: an in-app currency you can earn and buy to enable more app features.

Start with a free but basic app. Then sell users the good stuff—-quick level-ups, extra lives, or features that dating app users will be dying to have.

You've got a variety of in-app purchases to play around with:

• Consumables: things users buy and use up, like game lives or coins.
• Non-consumables: stuff that, once bought, is theirs to keep, like a fresh game character or a secret level.

Users are spending real cash on these, with charges going straight to their App Store or Google Play account, giving a nice cut to the platforms, too. It's straightforward: offer tangible perks, and they will open their wallets. Especially if it looks good.

3. Interstitial ads

Interstitial? What’s that?

Full-screen. Forget the typical banners users are tired of seeing—it's time to go big with interstitial ads. These ads take over the whole screen, making it impossible for users to ignore them as they engage with your app, be it playing a game or browsing.

Here's the gist of interstitial ads:

Full-screen: it covers the entire screen, so users have no choice but to notice it.

Natural breaks: slap it in when the game ends or a task is finished. They expect a pause, give them an ad instead.

Can’t miss it: the ad comes naturally in the flow, so users are less likely to get pissed off, and they can always hit the 'X' if they want out.

Because these ads catch users at prime moments and hog the whole screen, they rack up clicks quite well. Advertisers love them, and they pad your pockets nicely. It’s a win-win. Just make sure to place them at points where users naturally pause, so it doesn’t feel like an ambush.

4. Rewarded videos

Let's face it, rewarded video ads work for everyone involved.

For the user, it's about getting something extra, like:

• Unlocking features or leveling up in a game
• Getting back into a lost game
• Snagging a discount

And they just have to watch and play around with an ad to get it. For you, the publisher, it means people stick around longer and you make more from your ad space. But there’s more – advertisers also see better returns because users actually want to watch these ads, upping the chances they’ll buy something in-app.

We're talking about a self-explanatory ad format here: watch the ad, and get a reward. Simple.

Though it started with mobile games, now all sorts of apps are getting in on it because it works. The beauty? It's opt-in. Users choose to watch and grab their reward, or skip it and keep using the app. It means they're actually into the content, not just forced to sit through it, which is a big plus for engagement.

5. Bidding systems

In the mobile ad world, there are two ways to go about selling your ad space: waterfall bidding and parallel bidding. Let's break it down.

Waterfall bidding: one at a time

Here, each potential ad buyer gets a shot, one after the other, to meet your set criteria for your app’s ad space. If one fails, it moves to the next. It keeps going until it finds the right fit.

You can manage this through ad mediation, which is basically handling various ad networks through one platform where you call the shots, setting your preferences on demand, fill rate, and eCPM.

Parallel bidding: all at once

This one is a simultaneous play. Once you sync your ad inventory with multiple sources, they all get your ad request at the same time. The one with the best offer at that moment wins. It's about milking your inventory for all it’s worth and getting the top dollar each time.

So, which one?

Mediation is less of a headache to manage, but parallel bidding gives you real-time info on each source.

Want to learn more about all sorts of monetization practices, on top of good advice for app makers in general? Join App Mastery Connect 2023 for expert talks on app management, growth, and so much more. Networking included!

Conclusion

When it comes to raking in money with your app, one-size-fits-all isn't a thing. You've got to play with different strategies, melding them to suit your evolving business goals and the ever-changing market and user landscape.

Here's the deal:

You've got ads, in-app purchases, and subscription models at your disposal. Use them not just to make money, but to get in tight with your audience, understanding them better.

And here's a pro tip – don't just slap ads anywhere. Integrate them thoughtfully within your app so it feels natural to the users, enhancing their experience while filling your pockets. It's about being smart and organic in your approach. Adjust as you go and use the right review management software to boot.