Are you an app developer, who has channeled all your efforts into building an innovative mobile application, but are struggling to monetize it?

If you want to monetize your app, there are various mobile app monetization platforms, which cater to several app monetization strategies. You can adapt these strategies and generate revenue instantly. But it is easier said than done!!

Choosing the right app monetization strategy is crucial and complex. Nonetheless, before making that decision, let’s get a clear idea of what app monetization is all about.

From understanding the basics to getting a perspective on the multiple mobile app monetization strategies, knowing the benefits of app monetization, the best app monetization platforms, types of ad formats, and exploring current trends and future prospects.

In this article, we have explained all you need to know about mobile app monetization. So, let’s get started!

What is app monetization?

App monetization means generating money through a mobile application by leveraging data into various streams so that the app can generate revenue.

How does an app make money?

Most mobile apps are free to download and use, so then how do app developers and publishers make money? The simple answer to this is through the number of users on the application and their level of interactions.

There are several app monetization strategies such as subscription-based models, in-app advertisements, data monetization methods, in-app purchases, etc.

All these app monetization strategies are framed under two methods through which apps make money – they are known as Direct Monetization and Indirect Monetization.

Direct Monetization	Indirect Monetization
Revenue is generated only from the application.	The app is to back up an independent product or service.
There is no other stream of revenue generation apart from the app.	The app is secondary and revenue is generated regardless of the app usage.
The income comes directly from the app when users purchase the app on Google Play or Apple Store or a product is purchased via an e-commerce app.	The income comes indirectly, when in-app ads are displayed on the mobile app, and revenue is generated as a publisher. Several other indirect mobile app monetization strategies are described in the article later.

Why implement an app monetization strategy?

You must implement an app monetization strategy to generate revenue and gain a return on investment for the cost, time, and resources contributed to the app development.

Moreover, it is the right time to implement an app monetization strategy, mainly because the app market is expanding and has become worth billions of dollars.

Reports suggest that revenue generated by apps has doubled between the years 2016 to 2020. So, if you are an app developer start monetizing your app now!

What are the primary ways to monetize an app?

There are four primary ways to monetize an app.

Those are;

Paid Downloads – You need to pay before you download the app.
In-App Purchases – You may download for free but within the app, some features or products can be purchased.
In-App Subscriptions – You can download the app, but you will need to pay a premium on every interval to use the features of the app.
In-App Advertising – Ads will be shown on the app to the users, through which the app owner will generate revenue.

These ways or methods are further segregated into app monetization strategies, which are explained below.

How does mobile app monetization work?

Mobile app monetization works on various models also referred to as app monetization strategies. Popular app monetization models work in a way to leverage the user base for publishers and developers so that they can earn money from the app.

Let us take a look at some of the most popular app monetization strategies;

1. Freemium Model

The freemium model for mobile app monetization works by gathering the maximum number of users and offering them the basic features, similar to free apps. The aim is to entice the users to upgrade so that they purchase the premium version of the app by making a payment.

2. Paid Downloads

As the name suggests, users have to pay and download the apps. Users pay only once to download the app and use all of its functionality. Generally, there are no additional charges or in-app purchases. This app monetization model is one of the oldest and most upfront strategies for generating revenue for an app.

3. In-App Advertising Model

The in-app advertising revenue model allows app developers to become publishers and offer inventory to display ads inside their applications. The advertisers pay the developer/publishers every time an ad is displayed.

4. Subscription-Based Model

A subscription-based model is a popular app monetization strategy. Users subscribe and pay a monthly or annual fee to access the application.

Subscription-based models are great to generate a steady income for app owners. The subscription model is similar to in-app purchases as it enables users to purchase additional content or features.

5. In-App Purchase Model

The in-app purchase monetization model involves selling physical or virtual goods within the mobile app and then retaining the subsequent profits. Gaming applications are a great example of how developers can leverage in-app purchase models.

6. Partnership / Sponsorship Model

If an app caters to a niche market or a segment of the target audience, then companies can approach these apps for partnership/sponsorship opportunities and get their brands in front of the selective app user base.

7. Transactional App Model

Wondering how to monetize an app without ads? One such model is presented by transactional apps. Transactional apps allow users to make financial transactions and earn revenue on every transaction being made.

This app monetization strategy offers scalability and gives developers the ability to grow based on the number of active users.

As a publisher, you need to use a blend of multiple app monetization models to ensure optimum revenue flow. For example – Spotify uses the Freemium Model to get users registered.

The app has also implemented In-App Advertising Model showcasing banner ads to unpaid users and In-App Purchase Model as well offering premium features to paid users.

So, which is the best way to monetize an app?

According to Statista’s distribution of free and paid apps on the App Store and Google Play as of March 2022, says that 96.7% of Android apps and 93.9% of iPhone apps are free!

This means most app owners are not generating revenue through “Paid Downloads” and are rather adapting various other app monetization strategies to benefit themselves.

Nonetheless, it is difficult to pin on one app monetization strategy. A certain set of app monetization models may be right for one app, but the same set might not be the best app monetization method for another app.

Speak to an expert before concluding on which app monetization model to follow.

What are the best platforms to monetize an app?

Google AdMob and Google AdX are known to be the best platforms to monetize an app.

Google AdMob

Google AdMob is a mobile ad network and monetization platform for app owners to make money from ads. It also provides actionable insights so that you can grow your app business.

AdMob exposes publishers to several advertisers from across the globe. To use Google AdMob, you need to set up ad slots, so that advertisers can bid for the same. The platform chooses the advertiser with the highest bid.

Google Ad Exchange (AdX)

Google AdX is an ad exchange platform for publishers with substantial sales and visibility. It works on both web and mobile apps. With Google AdX, publishers can sell their ad inventory to advertisers and agencies using real-time bidding technology.

Setting up Google AdX can be difficult as there is an eligibility standard. Publishers need to have a minimum of 5 million users, ensure brand safety, host an ads.txt file, and should be in a language that Google supports.

There are two ways to signup for a Google AdX account – that is via Google Account Manager or a Third-Party Google Partner (like AppBroda).

Read More: Google AdMob VS. AdX: Choosing the best monetization platform

What are the types of ads used to monetize an app?

1. Display ads

Display ads are a form of online advertisement that includes text, images, and a link to the website, where the targeted audience can learn more about the advertisement or purchase products.

2. Interstitial ads

Interstitial ads are interactive ads on mobile apps designed to be displayed between content, so they are best placed at natural app transition points.

Most of the ad networks including Google AdMob, Facebook Audience Network, Google AdX, etc. support this ad format and ensure easy integration and premium user experience.

3. Banner ads

Banner is also a part of display ads designed as an image or text copy, on which viewers can click and be redirected to the corresponding landing page of the advertisement.

4. Video ads

For app monetization, publishers or app developers integrate rewarded video advertising. This format gives the viewer a reward in exchange for time spent viewing a full-screen ad. Each view has a cost value associated with it earned by the publisher.

5. Native ads

Native ads are designed to match the look and feel of the app’s content. As a result, users are motivated to interact with native ads offering increased conversions.

What are the benefits of mobile app monetization?

Let’s take a look at how other app monetization strategies are benefiting app owners:

As an app owner, you can generate revenue and deliver ROI.
You can obtain high profit with low-risk monetization methods.
In-app purchases and digital upgrades can build a loyal user base.
User engagement and time spent on apps grow substantially.
A constant and steady flow of income can be generated.
You can in turn offer a better quality of service to the users.

Mobile app monetization trends of 2022

Here are some significant impacts of app monetization in the year 2022:

According to Statista, mobile ad spending amounted to $190 billion in 2019 — and that figure is expected to increase to more than $280 billion in 2022.
As per a report published by Ocean, the global in-game advertising market was valued at $5.29 billion in 2020 and is speculated to grow by 19.5 % between 2021-2027.
According to the Business Line, global consumer spending on mobile apps reached a record $133 billion in 2021. This figure represents 20 % year-over-year growth from 2020 when app stores generated $110 billion.
Some reports also suggest that in 2022, a greater number of mobile apps are adapting monetization methods with a primary focus on providing the utmost user experience.

What are the future prospects of app monetization?

The Allied Market Research says that the app market will be valued at $407 billion by 2026, as each year developers, publishers and marketers are discovering new ways to creatively monetize an app.

The competitive market is pushing for more optimized and diversified monetization strategies and the future prospects of app monetization within the app development industry certainly look bright.

Wrapping Up

So, if you as an app developer or app owner would like to monetize your mobile application by running ads on it, then get in touch with our experts at AppBroda.

We at AppBroda are well-versed with every app monetization strategy. We recommend and provide you with ideal app monetization strategies and the best app monetization platforms.

Moreover, we understand that applying these strategies can be complicated. Hence, we offer all-inclusive solutions so that your app can generate a valuable source of revenue.

All You Need to Know About Mobile App Monetization