Grigoriy MisilyukSometimes, it is hard to understand how companies can benefit from launching their mobile apps. However, mobile app monetization may be extremely profitable with the right approach. No wonder that in 2023, mobile apps generated over $171 billion in annual revenues. How does mobile app monetization work? And what strategies should you employ to maximize the profitability of your mobile applications?
This article will describe popular mobile app monetization strategies and feature real-life examples of successful brands. It's not a step-by-step app monetization guide but a practical and easy-to-understand exploration of app monetization best practices.
Here you will find the most relevant insights and tips on how to monetize the app. We overview practical strategies and real-world examples, ranging from the best mobile game monetization techniques to the ways of expanding your mobile application's outreach. The key point is to help you understand the superior approaches and find best app mobile monetization strategies for your business.
What is mobile app monetization?
To start off, let's define mobile app monetization. Generally, it is the process of generating revenue from a mobile application. It may involve various strategies, such as in-app purchases, ads, paid subscriptions, and paid downloads. The key point of this approach is turning user engagement into profit without compromising the user experience. Developers choose monetization models based on their app type, audience behavior, and market trends to maximize earnings while delivering value.
Why is it so important to invest in mobile app monetization?
The short but honest answer is that we live in capitalism, and life costs money. Since it's impossible to argue with this statement, mobile app monetization will sooner or later become a solution to a financial issue. Even if you want to create free apps, you will need money to maintain and improve them.
There are two main options for funding development: monetizing mobile apps or seeking grant support. This article will focus on the former, leaving the latter to other experts.
What is app monetization? It is one of the stages in the software product development cycle. The need for funds will predictably increase over time, and the ability of an application to receive them depends on the demand for it from users. You should do everything possible to monetize your app or app portfolio as efficiently as possible if you know people need it. Choose those app monetization models that won't devalue your products and can create additional value. With the right approach, it is more than possible. And we are here to figure it out together.
Statistics data to consider
In-app advertising will reach a third of the global mobile app market by 2025
As you can see in the image, most people choose in-app advertising because this approach is the sincerest answer to how to monetize an app.
The number of apps available for download: the Apple App Store hosts almost two million applications, and the Google Play Store offers three million.
On average, a smartphone owner uses ten apps daily and thirty per month.
Between 90% and 97% of applications can be downloaded from public stores for free.
The global mobile app market will exceed $670 billion by 2027.
In-app advertising is the most popular monetization strategy for mobile apps, with revenues expected to nearly triple by the end of 2025, surpassing $220 billion.
10 Effective app monetization strategies in 2025
This section won't provide tips like charging users a download fee. The reason is the specifics of the category. Usually, paid applications are designed to be paid from the very beginning. In this case, the developers are sure their creation covers a specific need and has no free analogs. So, they do not ask themselves how to monetize a mobile app.
Minecraft is a good example: it is a paid mobile game because there is no similar one. Another great example is one of the professional weather-tracking apps explicitly created for drone operators. Access to this data makes no sense for most users, while it helps operators plan their activities carefully.
If your application is free, the only thing left is figuring out how to monetize the mobile app. Oh, the whole world opens up here!
1. Free + premium = freemium subscription model
Among all the ways to monetize an app, the subscription model is the most gentle and acceptable for users. They know they get some of the app's functions for free, and the rest is paid for by subscription. However, developers usually try monetizing the free user segment as well.
YouTube is an example of a successful Freemium subscription. Moreover, the developers have applied a combined approach to monetization: most of the functionality is free but with advertising. The subscription, in turn, removes ads and provides additional functionality to users.
Advantages:
A freemium strategy is highly scalable, it allows companies to attract users without significant budgets.
Such an approach is a perfect way to convince users that your app is worth it.
The freemium approach allows companies to reach a broad user base, enticing even frugal customers unwilling to commit to paid apps upfront.
Disadvantages:
Many users do not convert to the paid option.
Some users may be driven away by a constant upsell.
When designing subscription options, developers' main task is balancing free and paid features. An expert tip from the TeqBlaze team: do not turn previously free features into paid ones, but instead create additional features that will be paid from the beginning. Among all mobile app monetization options, the one where developers and owners invest in the product to create further value will always win. This is the most ethical approach.
2. Premium subscriptions
App subscriptions offer businesses, probably, the steadiest revenue stream. While it may be challenging to make a user pay for the subscription, the uniqueness of your product is the key. You need to outperform your competitors and provide your users with a unique value to make them pay for your product. The model banks on users loving your app enough to pay a recurring fee, whether monthly or annually.
For example, YouTube offers a premium subscription model for users who want to enjoy an ad-free experience and use additional features and advanced recommendations. In addition, subscribers of YouTube Premium get free access to the musical streaming service YouTube Music. These benefits are just enough to get the audience hooked and make them pay for such subscriptions.
Advantages:
Recurring payments create a reliable revenue stream to fuel updates and growth.
Consistent funding supports long-term product evolution and user retention.
Disadvantages:
The cost of premium subscriptions can turn away casual users or those with limited budgets.
You face value pressure because it is essential to deliver value justifying the recurring expense.
While being a steady source of income in terms of app monetization, paid subscriptions also create great demands for the provider of such an app. In this approach, it is vital to monitor the competition and keep quality standards high in order to keep the audience interested in your offer.
3. In-app advertising: easy, profitable, acceptable
Together with the TeqBlaze team, we have already written an extensive article titled mobile app monetization for publishers. It overviews the most popular monetization ad networks and their pros and cons: Google AdMob, ironSource, AppLovin MAX, and white-label mobile SDK for advanced experience with state-of-the-art engineering solutions.
Let's take Tripadvisor, an app for finding interesting places, as an example. While users look for a restaurant, it advertises excellent restaurants. Isn't this the future we deserve? Or any mobile game with playable ads: while you play the game, you can take breaks from time to time to play another game, thanks to the advertising integrations, and immediately understand whether you are interested.
Advantages
In-app advertisements are oriented on the audience that is already engaged, which allows such ads to outperform mobile banners.
Such advertisements are often highly relevant and align directly with the audience's interests and preferences.
Disadvantages
In-app ads are associated with limited user engagement, which can be displayed by low click-through rates.
As ad placements are often automated, there is a risk of a rival's app getting promoted within yours.
Out of all the ways to monetize apps, in-app advertising is one of the most accessible and flexible solutions. By integrating ads, modern technologies allow you to improve and deepen the user experience. That's why the TeqBlaze team is immersed in ad tech. It is space and trillions of stars!
4. In-app purchases: allow users to buy advanced experience
There is a beautiful world of in-app purchases in monetizing mobile apps. This world can be friendly to users or turn the app into a nightmare where you must pay for every action. This is a specific type of monetization, and it also requires careful balancing. Your task as a developer is to make the application easy to use without paying and a little better with payments to maintain the audience due to commercial differences among users.
Examples of in-app purchases are easy to see in games. They can be consumable: in-app currencies, extra lives, or health points. They also can be non-consumable: pay to unlock a new item design or an additional level. An apt example of a non-game app with purchases is Tinder: you can use it successfully for free, but you might also buy additional swipes to increase your chances for success.
Advantages:
In-app purchases are very convenient to the users.
This approach is notable for its flexibility because it offers a wide range of purchase options.
In-app purchases are among the major money-makers in digital advertising.
Disadvantages:
Constant upsells may frustrate users.
By offering low-value or poorly thought-out in-app purchases (IAPs), you can damage your brand's reputation.
All app monetization methods are suitable in their own way. In-app purchases are outstanding primarily for unobtrusively raising funds. This approach is usually not used alone but combined with other methods.
5. Transaction fees for organic monetization
The most specific way to monetize apps is to charge for in-app payments. It's not hard to guess: if your users don't buy or sell anything inside the application, this approach is not for you.
Ingenious applications like eBay can charge payment fees in various ways, sometimes more than 15% of the product price. The "big fee" is divided into several small ones to calm users, but the matter remains.
Advantages:
This approach ensures a steady revenue stream. The point is that your company earns a percentage from every user transaction.
Users only pay when they find value, which creates a fair monetization model that supports long-term engagement and loyalty.
Disadvantages:
There is a problem with platform cuts because app stores may take a significant portion of each transaction.
Buyers can be discouraged by extra fees.
A little tip from cunning experts: you can add elements of internal trading to any popular application. Then, charge fees for every payment, starting with tiny ones and increasing them when everyone is comfortable. Anyone can follow Meta's path with its Facebook and Instagram. Still, success depends on the popularity of the app. New features should not devalue the basic ones.
6. Interstitial ads
A quite common problem in mobile app advertising is that banner ads are fading into the background. If a problem with the delivery of banner ads exists, a proper solution would be exploring interstitial ads. Those are full-screen takeovers that show up between key moments in your app. For example, after a game level or between content pages.
For instance, some mobile games often use interstitial ads right after a user completes a level or achieves something. A gamer can perceive this as a natural pause. This strategic placement maximizes ad exposure, but it is important to avoid ad overload. In worst scenarios, users can start feeling these "breaks" as interruptions.
Advantages:
Interstitial apps bring you 100% viewability, as users can't scroll past these ads. This, in turn, leads to higher engagement and click-throughs.
Such advertisements allow advertisers to pay more for prime screen real estate, which boosts your CPM if you are a publisher.
Disadvantages:
There are always risks associated with Google policies. In particular, poor placement of such an ad can lead to penalties.
Heavy interstitials can slow the app down, spoiling the product's performance.
Overall, despite some disadvantages you should consider, interstitial ads can be very useful. It is important to use them wisely at natural breakpoints in order to boost revenue.
7. Native ads
Native ads are one of the smoothest ways to app monetization. In many cases, users don't notice that they are ads at all. Usually, it goes about sections like "recommended reads" or "you might also like." Those sections can appear on e-commerce platforms, social media, and other popular websites.
Instagram, one of the most popular social media platforms globally, blends native ads into user feeds. Sponsored posts often look almost identical to regular content. If such a post is informative and well-designed, a user can engage with it without realizing it's an ad. This may translate into excellent ad conversion rates.
Advantages:
Native ads match the look and feel of your app content.
Native ads can show higher click-through rates than standard display ads. The point is that they are ads in disguise, and users often click on them to find additional information on the topic they are interested in.
Disadvantages:
The main con of native ads is that they require significant precision. Effective targeting of such ads demands detailed user segmentation, which is vital for delivering tailored messages.
In sum, native ads are great for cases where you don't want to disrupt the user journey. Such advertisements are smooth and non-intrusive. The key point here is to spend more time and effort on targeting and segmentation in order to ensure the relevance of native ads.
8. Affiliate marketing
Affiliate marketing is often viewed as one of the low-risk ways to make money with your app. In this case, companies partner with brands and recommend their offerings directly in their apps. For example, you can introduce a link to your affiliate partner's page in your app. Once a user purchases a product or service through your affiliate link, you earn a commission.
Honey, the coupon-finding browser extension has a solid experience in affiliate marketing. The company earns commissions every time a user buys something with a coupon they recommended.
Advantages:
Affiliate marketing allows companies to make money without paywalls or subscriptions.
This approach promotes strategic brand partnerships that can benefit both companies in the long run.
Disadvantages:
Affiliate marketing is associated with significant income fluctuations. The point is that earnings depend on user behavior and can be inconsistent.
This approach also brings you very limited control because pricing, shipping, partner reputation, and customer satisfaction largely depend on your partner.
While affiliate marketing can bring businesses several significant benefits, it is important to be extremely thorough when it comes to choosing the partner. The point is to work with companies that won't damage your reputation. In addition, it is important to ensure that your partner's offers are relevant to your audience. In sum, the key to success in affiliate marketing is finding reliable and relevant partnerships.
9. SMS marketing
Surprisingly, SMS messaging also has great potential in terms of digital advertising. For many businesses, this approach has become a gold mine for re-engaging app users. The point is that many customers feel much more convenient while receiving discounts and special offers via SMS than via email.
One of the key concerns here is the question of privacy. Before starting to send promotional SMS messages to your clients, get their permission. Unsolicited messages can land you in spam territory—or worse, get your number blocked. Also, make sure to keep your messages brief, personal, and well-timed. All these factors matter a lot when it comes to user engagement. In addition, remember that the younger audience is usually more receptive to such messages.
Domino's Pizza presents an excellent example of successful SMS marketing. They send timely offers with limited-time discounts just before lunch or dinner. Such messages are typically delivered to the users of the company's mobile app. A perfect combination of timing, urgency, and relevance keeps customers engaged and hungry for more.
Advantages:
This approach is associated with a quite simple setup. It is important to collect user phone numbers through the app and start sending messages with minimal overhead.
SMS advertising helps you to reach app users who've gone cold. The right message delivered at the right moment will help you bring a client back.
Disadvantages:
Without user consent and personalization, your messages can be marked as spam, damaging your brand reputation.
This approach offers very limited analytical potential because it may be hard to understand your messages' conversion.
If implemented properly, SMS marketing can become a powerful tool to drive conversions and reignite interest in your app. Meanwhile, it is essential to focus on relevance, timing, and user consent. Otherwise, your campaign may be interpreted as spamming, which is harmful to your brand's reputation.
10. Email marketing
There exists a popular misconception that email marketing is outdated and no longer efficient enough. However, in reality, email remains one of the most powerful and underrated channels for driving app engagement and sales. Just like SMS messaging, it typically works as a follow-up strategy for re-engaging app users. Email is convenient and non-intrusive, which makes it a very satisfying option for millennials using mobile apps.
So, whether you're dreaming of passive income on a beach or just want to boost revenue while sipping something fancy in your backyard, email marketing could be your secret weapon.
Just like with SMS advertising, value and relevance are vital for successful email promotions. It is critical to send well-crafted and relevant messages including exclusive app-only discounts, announcements regarding the upcoming features, and other curated content that is relevant to your audience.
Spotify presents a perfect example of a successful email marketing campaign. The company analyzes the listening habits of its app's users to deliver them personalized messages. Such emails feel useful, personal, and timely. This ensures high conversion rates for such campaigns.
Advantages:
Such advertising strategies have great conversion potential because they prove to drive more sales than social platforms.
Setting up email ad campaigns is pretty straightforward because companies can use emails collected during app sign-ups to start their campaigns.
Disadvantages:
Poorly targeted emails can land in the spam folder, which means that they won't have any conversion potential.
Too bland or pushy emails can have an adverse impact on your brand reputation.
Email campaigns can be very efficient and be easily used as follow-ups to app registration. However, you should keep them relevant, visually appealing, and user-focused in order to get a long-term revenue driver. Otherwise, there is a risk of damaging your brand's reputation.
Optimal approach towards mobile app monetization strategy
The app monetization models described can work in combination with each other. And if you think about it, the top companies use all available ways to monetize apps. But they should be implemented gradually. Below are the questions you and your team should answer before choosing and implementing a specific approach. Another hint: the engineering sharks from TeqBlaze recommend starting with in-app advertising.
Why do people choose your app?
How will your chosen strategy impact user retention?
What are the potential legal and ethical implications?
How scalable is the chosen strategy?
Who are your direct competitors?
What mobile app monetization strategies do they use? If it is monetization through advertising, be sure to analyze competitor ads!
Once you have selected a suitable monetization strategy, what other approaches can you combine it with over time?
Effective tactics for mobile app monetization from TeqBlaze
There are many effective strategies for app monetization, but choosing the one that fits your brand specifically might be a challenging task. The right approach requires more than just inserting ads or offering subscriptions. You should be also able to analyze and segment your audience, try different tactics, and establish metrics for measuring growth stages. Let's proceed with a few targeted tips that will help you maximize the revenue and conversion from your app monetization practices.
1. Align monetization with user intent
Before you pick a monetization model, you should understand why users come to your app. Different apps may thrive with distinctive approaches. For example, a meditation app may work well with a freemium subscription. Meanwhile, you may introduce in-app purchases for a photo editor application. Make sure to analyze your target audience and survey your users to understand their core motivations. Align those insights with your monetization strategy in order to maximize conversion.
2. Introduce in-app purchases strategically
As has already been mentioned, in-app purchases are the essential source of income when it comes to app monetization. However, they should be introduced strategically. The key is in the seamless integration of such purchases into the user experience. All paid upgrades should be tied to the moments of need. For example, if it goes about a mobile game, you should prompt users with a one-time power-up once they face a challenging moment. The key is to offer timely, context-aware upgrades that feel helpful, not pushy.
3. Combine and test different ad formats
To gain real conversion from mobile app monetization, try to combine different approaches. Try different ad formats - rewarded videos, interstitials, and banners to determine what your audience tolerates. Analyze your ads' view times and churn rates. For example, rewarded video ads (where users watch in exchange for in-app rewards) tend to perform well in gaming and lifestyle apps without damaging the experience.
4. Use data to personalize offers
Personalization can help you ensure more efficient ad monetization. It is important to use data on user behaviors to segment your audience. The better targeting, the better monetization results you get. The key point is to deliver relevant promotions to the right audience. Otherwise, your marketing messages can be marked as spam, which can be damaging to your brand reputation. Make sure to implement push notifications, emails, and in-app messages in order to personalize the user's journey, boosting both conversion and satisfaction.
Consider TeqBlaze as your reliable partner
Let us introduce ourselves humbly but clearly and to the point. The TeqBlaze team is interested in helping you to master in-app advertising.
We do not offer you a premade solution with ready-to-go advertisers. Instead, we offer monetization using the SSP + Ad Exchange platform and a white-label mobile SDK to enable quick application connection to the platform infrastructure. Your own platform is a standalone programmatic business, so you will be able to say that you have become a counterpart to Google AdMob.
You can connect any advertisers and manage all interaction settings flexibly. In addition, using this platform, you can connect applications of other owners for monetization with ads. They will use your infrastructure, and you will earn a commission. Such programmatic business has no income limits.
If you are interested in our offer, please get in touch with us, and we will assign an expert to discuss the details.
Final insights
Mobile app monetization offers great opportunities to businesses, but it should be organized the right way. This means that you should perfectly navigate the diversity of monetization strategies, ranging from in-app purchases to applying SMS and email marketing strategies. From our experience, the best strategy is primarily combined. Also, by following some critical tips, you can find your perfect mobile app monetization model.
From our experience, relevant approaches include:
Aligning monetization with user intent
Introducing in-app purchases strategically
Combining and testing different ad formats
Applying user data for personalized offers.
And, surely, technical support is crucial for companies aiming to implement mobile app monetization properly. In many cases, such strategies are based on monitoring, analytics, and precise control over monetization practices. In some cases, you may need a comprehensive app monetization platform. That is when TeqBlaze is ready to help you. We have a solid portfolio of successful adtech projects, involving the ones related to traffic monetization. Contact us to achieve excellence in combining different approaches to mobile application monetization.
