Creating a mobile app is not just about having an innovative idea and good technology, but also about a well-thought-out monetization model. To make an app profitable, it’s important to choose the right earning strategy already at the planning stage. Which monetization models work best? Below are the most popular ways to generate revenue from mobile apps.
1. Freemium model – free app with optional paid features
The freemium model is one of the most effective methods of monetizing mobile apps. It involves offering a basic version of the app for free, while additional features, enhancements, or premium content are available for a fee.
Advantages:
- Quickly builds a user base
- Allows users to see the app’s value before purchasing
- Flexible revenue scaling
Examples:
- Spotify – free version with ads and limitations; premium option without ads
- Evernote – basic features for free; advanced tools for premium users
2. Subscriptions (recurring payment model)
Subscriptions are becoming an increasingly popular way to earn from apps. Users pay a monthly or yearly fee for access to content or app features.
Advantages:
- Stable, predictable income
- Ability to deliver regularly updated content
- High user retention
Examples:
- Netflix – access to movies and shows with a monthly subscription
- Strava – basic functions for free; advanced analytics for premium subscribers
3. In-app advertising
Monetizing through ads is one of the most common methods used in free apps. Various ad formats can be used:
- Banner ads – static ads placed in specific areas of the app
- Video ads – short commercials shown before or after specific user actions
- Native ads – integrated into app content for a smoother user experience
- Rewarded ads – users can unlock features or virtual currency in exchange for watching ads
Advantages:
- Allows offering the app for free
- Effective in apps with a large number of active users
Examples:
- Facebook, Instagram – monetized via native and sponsored content
- Mobile games – rewards for watching ads
4. In-app purchases
In-app purchases allow users to buy virtual items, additional features, or upgrades directly within the app. This model is especially common in mobile games.
Advantages:
- Generates income without requiring upfront payments
- High earnings potential with a loyal user base
Examples:
- Candy Crush – purchase of extra moves or boosters
- Tinder – premium features that improve match chances
5. One-time purchase model (paid apps)
Some apps are sold for a one-time fee, giving users full access without additional costs.
Advantages:
- Simple business model
- No need for ads or microtransactions
Disadvantages:
- Difficult to convince users to pay without testing the app
- No recurring income
Examples:
- Minecraft – paid app with no extra purchases
- Pocket Casts – paid podcast app
6. Marketplace and transaction fees
Some apps earn money through commissions on transactions made by users. This is common in e-commerce and booking platforms.
Advantages:
- No fees for users
- Revenue scales with user activity
Examples:
- Uber – commission on rides
- Airbnb – fees from both hosts and guests
7. White-labeling and licensing
Some companies create apps that can be customized and sold to other businesses as ready-to-use products.
Advantages:
- Ability to sell the same technology multiple times
- Steady income stream with sufficient market demand
Examples:
- SaaS apps, such as CRM systems or online booking tools
Which monetization model should you choose?
There’s no one-size-fits-all solution – it depends on the type of app, target audience, and business strategy. Often, the best results come from combining several models, like freemium with ads or subscriptions.
The most important thing is to tailor the monetization strategy to your users and their expectations, and to test different approaches to find the optimal solution for your product.
Do you have an app idea and wonder how to monetize it? Contact us – we’ll help you choose the best revenue model for your project!
