Advertising Business Smartphones/Mobile Applications

The Perks of Choosing the Right Monetization Strategy for Your App

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Putting an app to market can be a huge investment. This investment needs to produce returns and turn a profit, otherwise, it is not worth the effort. Your app investors need their money back, and you need to show them you can deliver the promises you made when you were seeking funding for the app. Choosing the right monetization strategy for your app will often mean the difference between no revenue at all and a flood of revenue. Building a sustainable revenue stream starts with determining the best monetization strategy to follow.

There are several app monetization strategies you can choose from. This article shall analyze each one, and show the perks and downsides of each. 

1. Advertising Based Monetization Strategy

This strategy involves displaying advertisements in the app while offering the app itself for free. It is an effective strategy because it allows users to get familiar with the app without making a monetary commitment. However, it only works well if you have a very large user base. 


a. Effective if you do not plan to ask users for money

b. You can collect demographic data and sell it

c. If in-app purchases are not in line with the nature of your app, this is the way to go.

d. If you get many frequent guests who use your app for a long time, this is the way to go. 

2. Pay Per Download

This is another monetization strategy that you can use. The user pays to gain access to the app. They pay a one-time fee and access the full app from the get-go. The downside of this model is that it is difficult to convince someone to pay for something they have not tried, so it may not be the most lucrative option. 


a. It will work well if you have a good marketing team

b. A paid app is usually better than free apps

c. If you want to tie revenue to downloads then this is the way to do it 

3. In-App Advertising

The ads you use need to be relevant and fit the overall purpose of your app if you want this to work. Low quality or intrusive ads will result in deletion. In-app ads can be interstitial ads, which cover the entire screen, banner ads, which come into view from the top or bottom, native ads, which feel like part of the app content, rich media ads, and panel or list ads. 

4. In-App Purchases

Many apps these days may be free, but you have the ability to buy in-app goodies. As a user, you can purchase items directly from the app, such as physically delivered packages or virtual goods like app coins or lives in a game. 


a. If you have an e-commerce app or a gaming app, this is the solution

b. In-App Purchases allow you to profit for longer, even after Google or Apple takes their cut

c. The user engagement is even more engaging after a purchase has been made 

5. Freemium Monetization Strategy

This is where your app goes to market as a free app. However, after being downloaded, your user realizes that there are some freemium features available that they would like to have, so they pay for it. The main idea here is to entice users with the free version to get them hooked before reeling them in and making them spend money on your product. Successful apps that use the freemium monetization strategy are engaging and add value to the user. 


a. They build customer loyalty

b. If you want mixed revenue from ads and directly from users, this is the way to go about it.

c. Your premium features should add undeniable value to the product

d. If you have a large, active user base, then this method would work for you.

e. As long as your app encourages long user engagement, it can take advantage of this method. 

6. Subscriptions

Subscriptions are similar to freemiums. However, with subscriptions, users can access a limited portion of the app or the entire app for a limited time before being prompted to pay to access it in its entirety. However, it can be difficult to know exactly how much content should be accessed before stopping the app. For instance, how much of a game should one play or how long should a person use the app before service is discontinued. Subscriptions typically work for news and gaming or entertainment apps. 


a. Best for content-driven apps such as news or music

b. An app with subscription options encourages more repeat users

About the author


Rilind Eliezaj

Rilind Elezaj is a tech enthusiast from Prishtina, Kosovo. He graduated in Computer Science and has a passion for sharing tech-related information that can help society grow.