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Exploring Different Monetization Models: Finding the Right Fit for Your App

Just as the mobile app industry has grown, the ways of monetizing apps have grown in recent years. There are more ways than ever to make money with apps thanks to a variety of monetization models. The catch is that not every monetization model is going to be an ideal fit for every type of app. Developers need to figure out the best method of monetizing their apps, which can actually be more difficult these days with so many possibilities. That’s why we wanted to provide an overview of several monetization models to help you find the model that is the best fit for your particular app.


The most obvious way to monetize a mobile app is to sell advertising space. The premise is no different from selling ad space on a website or even commercials on a streaming platform. Most free apps believe that by selling ads, it’ll be possible to turn a profit on the app while keeping it free for users. There are more forms of advertising on mobile apps than ever before. Of course, banner ads or video ads that pop up while someone is using the app remain common. However, native and interstitial ads have grown in popularity because they make it less obvious to the user that they are being shown advertisements. This has helped to make advertising a viable monetization model for most apps.

In-App Purchases

This isn’t going to be a monetization method that will work for every app, although it’s a possibility for most apps. If apps are able to offer features or digital content that goes beyond what competitors are offering on their apps for free, it’s worth considering making those features available for purchase. The prices don’t need to be that high; in fact, lower prices for in-app purchases can make users more likely to accept them.

This type of model has become popular with gaming apps that can offer new levels or gameplay features to users willing to pay for them. However, a majority of apps are probably capable of finding something that they can up-sell to users, allowing in-app purchases to at least be part of their monetization model.

Freemium Model

Similar to in-app purchases, a freemium model allows apps to offer a baseline product for free while also selling subscriptions to premium content or features. This model works best for apps that offer a wide array of features, some of which are more specialized and valuable than others. This makes it easier to create multiple tiers at which these features can be offered. In a way, it’s similar to creating multiple apps in one. The base level of the app can remain free, but users who want to get more out of the app can sign up for a subscription, helping to create a steady stream of income for the app.

Data Monetization

This is not necessarily a route that all mobile apps want to take, but it’s one that’s available to almost all of them. Apps inevitably collect data about those who are using the app and then have the possibility of selling that user data to marketing agencies, large corporations, and other entities. This type of data can provide valuable insight into user preferences and behavior, making it desirable information for third parties. For apps that don’t think they can sell in-app purchases or subscriptions and don’t want to annoy users with apps, selling user data is a viable monetization method.

Sponsorships and Partnerships

These days, more apps are exploring the possibility of collaborating with partners or sponsors as a way to monetize. This entails finding a well-known brand that wants to promote its products or services on your apps. It’s similar to finding advertisers, except there is a more serious and permanent relationship between your app and the brand.

The brand is essentially integrated into the app, making the connection clear to everyone using the app. The trick is finding the right partner and being able to forge a long-term relationship that’s beneficial for both parties. This isn’t necessarily easy to do, although, with the right sponsor, an app can start to generate steady revenue.

Keep Target Audience in Mind

For all of the monetization models available to mobile apps, the audience of the app can’t be ignored. Always consider the demographics, behavior, and needs of your app’s users. Are they going to be able and willing to pay for in-app purchases or subscriptions? Will they be turned off by advertisements or sponsors? If users aren’t going to be receptive to your monetization SDK, it’s easy for things to backfire and lose users, so always keep your audience in mind.

Align with App Goals

Similar to keeping your audience in mind, it’s important to align the goals of your app with your monetization model. Is it more important to bring in revenue or more important to build an audience and serve your users? Answering these types of questions can often steer you to a monetization model that’s most appropriate. Just keep in mind that goals can change over time, so when that happens, make sure your monetization model remains aligned with those goals.

Monitor Competitors

No matter the services your app provides, it’s usually a good idea to consider the competitive landscape when it comes to monetization. Do you know the monetization strategies of similar apps? Are those strategies working for them? Is there a monetization model you can follow that will make you stand out from the competition and give you a better chance of winning market share? There will be times when it makes sense to copy your competitors and times when it makes sense to go in a different direction. But you should always know what they’re doing.

Track and Adapt

Obviously, mobile apps need to find a monetization model that makes sense for them and brings in a sufficient amount of revenue. But that doesn’t mean you need to stay married to a certain method forever. It’s important to keep track of the success of your current model and remain open to adding other forms of monetization or replacing your current model completely. It’s important to be able to evaluate and adapt when it comes to mobile app monetization because things in this industry can change quickly, so staying open-minded to new possibilities is key to success.

Check out: 7 Tips to Run Booming Facebook and Instagram Ads

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