A Quick Guide to Mobile App Monetization

Qubit Labs
Qubit Labs Team

The mobile industry is thriving. There are over 3,2 billion smartphone users in the world, and this number grows every year. Mobile phones have become an indispensable part of our lives, and many people use their devices in different situations and occasions. As per recent studies, an average American checks their phone every 12 minutes

But what is everyone doing on their phones, aside from work tasks? Well, people spend 88% of their mobile time on apps. Although it might not be a great fact for the users, it’s good news for app developers, app publishers, and any people involved in the app development industry

As per Statista, Apple’s App Store has over 1,96 million apps available for download, and the Google Play Store — 2,87 million. Given that, mobile apps are expected to bring around $935 billion in revenue by 2023. 

The mobile app industry statistics

But apps can’t succeed without downloads, and the creators won’t reap the rewards of their work without mobile app monetization. So, before you gladden users with your product, you need to understand how to monetize your mobile app

To get you started, Qubit Labs has found the most interesting tidbits about app monetization, so let’s get to them.  


What is Mobile App Monetization?

Coming up with a groundbreaking idea for your app and turning it into reality is just the beginning. The real play begins when you realize that it’s time to make money from your product. Although many companies developing apps believe they’ll get revenue the moment they launch their app, it’s far from reality.  

Mobile app monetization refers to leveraging your user base to earn money from the respective app. 

There are millions of apps available on app markets. That’s why it’s crucial to launch a product that will attract users and help the company convert those users via the proper monetization strategy.  

App monetization is an excellent opportunity to reach large numbers of consumers and make money from them. But many companies are worried that if they charge users for their products, they’ll never get downloaded. 

However, they’re being mistaken. Mobile app monetization is possible even if the product is free to download from the app store. Here’s how you do it:


How to Choose a Monetization Strategy?

Companies have to think about their users during every development stage. The user journey is what helps them understand at what stage of utilizing the product it’s better to introduce app monetization. If one considers the number of paid and free apps on the Google Play Store, it’ll be apparent that the latter significantly outweighs the first option.

A paid app comes with a price from the start, and not every user would want to pay for a product they aren’t sure about. Meanwhile, monetizing a free mobile app offers various strategies and methods that help its creators get revenue from the product.

Here are some of the most notable examples you can add to your monetization strategy:  

Examples of App Monetization Strategies  


1. In-app Purchases 

Monetization Strategy: In-app Purchases

In-app purchases allow developers to provide their products for free while still making money from them. It implies that users can buy goods or services from inside their application on a mobile device. The examples of in-app purchases are extra lives in the game, custom clothes for the characters, or ads removal, to name a few. 

This monetization strategy is divided into three types:

  • Unlockables (e.g., game expansions, e-books).
  • Expendables (e.g., coins or power-ups that help users pass levels or obtain various digital elements).
  • Subscriptions (e.g., obtaining access to the app and using advanced features based on monthly or yearly billing).

When making purchases, consumers aren’t redirected to separate websites to conduct the transaction. This monetization method can be used alongside other monetization strategies. 

Around 48,2% of mobile app earnings rely on in-app purchases, while the average consumer spending on mobile apps per mobile device was $5.31 in the third quarter of 2021. 


2. Freemium Apps

When the customers download an app, they get access only to the basic features. If they want to use more features and the premium version of an app, they have to purchase a subscription or pay a one-time fee. 

This option is popular in the mobile apps market because users can try out the product for free without worrying they might get charged for something they don’t like. However, if they enjoy it, they’ll have the opportunity to upgrade. 

Examples of apps using the freemium monetization strategy are Slack, Grammarly, Youtube, and Spotify. Anybody can start using them for free, but there are paid plans that unlock multiple premium features. 


3. Advertising-based 

In-app ads are used in many apps because they offer a great source of revenue for the products that aim to remain free in the app store. There are three types of ad revenue, including:

  • Cost per Thousand Impressions (CPM)
  • Cost per Click (CPC)
  • Cost per Action (CPA)

It’s also critical to use the formats of ads that won’t harm your brand image or ruin the user experience. Around 78% of mobile app users mention they don’t mind seeing ads if they’re relevant to their interests.

That’s why there are several ad formats that help to facilitate mobile app monetization:

  • Banner ads. These are the ads that appear at the top or bottom of the screen. It’s critical to ensure quality graphics and CTA to make them work. 


  • Interstitial ads. These ads appear in between levels, pages, articles, etc. The users usually look at them for a few seconds until they can click “X” if they want to cancel the ad. However, if they’re interested in learning more, they can click through. 


  • Native ads. These ads receive 53% more views than those mentioned above and are less disruptive. They are designed to match the consumer’s experience of using an app.  


  • Video ads. This type of ad delivers high CTRs (Click-through rates) because they’re more engaging than others. The users’ time watching video ads is constantly increasing. 


  • Rewarded video ads. These ads imply that users will be rewarded after finishing a video. Actually, 77% of consumers would watch a 30-second video ad if they were rewarded with something valuable. 


  • Playable ads. This type of ad leverages the “try before you buy” method. In this way, the consumers can play the advertiser’s app for a limited time and then install the product if they enjoy it. 


4. Subscriptions 

This mobile app monetization model is similar to the freemium strategy. When downloading an app, users get access to a limited amount of content. And if they pay for a subscription, they can enjoy the rest of the content. This strategy ensures recurring revenue for the developers.  


5. Affiliate Marketing

This commission-based sales method delivers value to the consumers with coupons and season deals of other brands. When creating content for the app, the developers add custom links that will track when the users make a purchase. In this way, the app owners earn a small commission from each purchase. 


6. Pay-per-download

This model implies that the users get charged for downloading the product. Usually, this monetization strategy is combined with a freemium trial period or ads.


How to Monetize Your Android App?

1. Sell your app

That’s the most direct way to get revenue from your product, but it’s the most complicated one. It requires you to make users want to prefer your paid app over free alternatives. You need to target a specific niche and provide the most competitive solution there.  


2. Make certain features “premium”

Find a balance between free and paid items/services and make sure the latter is desirable enough to make consumers want to pay for them. 


3. Get a sponsorship deal

If you manage to find a well-known sponsor, it will help your app to get more popular. Also, it helps to increase revenues because a good sponsorship can cover many costs, including those for development, design, and marketing. 


Tips to Streamline iOS App Monetization 

Sell data-driven ad space within the platform

You can do this on your own or by finding a mobile ad partner. 


Make sure to choose the right ad type

Don’t forget that ads shouldn’t annoy consumers because they will totally disrupt the user experience. Ads should be organic and engaging. 


Focus on delivering value

You need to maintain your users’ loyalty and make sure your user experience is worth sticking around. Make sure to offer new features, leverage personalized content, and provide unique opportunities such as inviting friends. 


Consider in-app purchases

In other words, opt for creating a freemium app, and offer users to make purchases to improve their experience from using the app. Find a balance to ensure a valuable experience for all users, both those who choose not to pay for add-ons and those who do. 


Don’t overuse notifications 

Upgrades and limited offers are great as long as their number remains within reason.   


Consider Qubit Labs as Your Mobile Development Partner

The world of mobile apps grows steadily, innovating every day and requiring novel mobile app monetization strategies. That’s why it’s critical to stay up to date with all the trends and leverage different methods to deliver value to the customers.

Qubit Labs has relevant experience with building mobile app development teams and can match you with the vetted experts in the niche. With us, you’ll get access to a skilled talent pool of developers aware of the latest trends and app monetization strategies.

Contact us to get the best deal and discuss your ideas during a free consultation.    



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