The mobile applications market is rapidly growing, and developers are offered many opportunities to monetize the apps they create. Exploding Topics has reported that today’s estimated number of smartphones in the world is more than 7. 2 billion and is estimated to increase in the later years In the following years. However, identifying the right way to monetize a site and create profits with minimum bearing on the site’s usability can be challenging.

Then, some models are useful for some applications, while others might irritate users if implemented incorrectly. Mobile applications could use three well-known approaches to generate cash: in-app purchases, ads, and subscriptions. It’s now essential to dissect these, understanding the concept in which they operate and the optimum cases in which they are most applicable. So, Let us explore the mobile app monetization strategies available in detail:

In-App Purchases: A Seamless Path to Revenue

One can do mobile app monetization in various ways, although in-app purchases are the most popular. In detail, users acquire the app free of charge, although they may be charged within the app in the form of features, content, or resources, among others. One of the advantages of this method is that users of the app can test the functions of the application before parting with their cash, thus boosting its usage. 

• Consumables: These are commodities that users use and wear out and must be replaced or replenished. Examples familiar to many include gaining more lives in the games, points, or bonuses. They may be in virtual cash. Consumables are more applicable in gaming applications, in which users can be willing to spend on things that may improve their experience or gain points faster.
• Non-consumables: These products are bought once only and are not time-bound or locked, similar to the subscription-based case items. This can be unrestrained app sections, the elimination of Ad-based revenue, the access to extra content, among others. This is why most productivity or education applications employ this method to make the users pay for an upgrade instead of enrolling them in a monthly subscription model.
• Subscriptions (or hybrid models): Sometimes, in-app purchases harmonically integrate with the subscription model, where users pay to unlock certain content or services within the app they are using for an extended period.

According to Business of Apps, in Q1 2024, sales from Google Play brought in $21.5 billion, while sales from the Apple App Store brought in $24.6 billion.

Advertising: Converting Attention into Money

Advertising is one of the most influential and easy methods to make money from your mobile app monetization. It helps developers maintain the application cost-free while generating income from several advertisers who wish to access the application users. The basic premise is simple: the more time the users spend in the app, the more ads are viewed and the more the developer earns.

• Banner Ads: These are typically placed at the top or bottom of the app screen while it remains active and does not hinder the user’s experience. As much as they are non-aggressive and unobtrusive, they often yield lower returns of revenue than each of the other ad forms.
• Interstitial Ads: These are the types of Ad-based revenue that fill the entire screen, and they are usually placed when a user is transitioning from one phase to another in the app, for instance, from one level to the other in a game. It is suggested that they provide higher engagement and earnings than others, but it may annoy the users simultaneously if overused.
• Rewarded Video Ads: Very common in gaming applications, these interfere with the user by presenting them with a video ad in exchange for coins or an additional life. The essential advantage is that the user has made a conscious decision to switch to the video and is less likely to interrupt the ad and increase the viewers’ interest and click-through rates after mobile app monetization.
• Native Ads: Less intrusive as compared to interstitial ads, native ads are supposed to complement the material presented in the app. They can blend with the app’s layout or style to look more like its content than an advert.

According to WordStream, businesses get $2 in income for every $1 they invest on Google AdWords.

Subscriptions: Creating Long-Term Value

For many developers, subscriptions are now the primary mobile app monetization solution, and this is because they aim at providing users with content, services, or tools which is frequently needed. In this model, the users pay a certain amount periodically, possibly monthly or yearly, for perpetual access to content or special features. The subscription model is incredibly versatile and works well for: The subscription model is incredibly versatile and works well for:

• Content apps: Subscription services include streaming services, news platforms, or digital magazines providing subscribers exclusive or ad-free content. Examples of successful implementation of these app monetization strategies include Netflix, Spotify, and The New York Times.
• Service-based apps: A proper example of such applications includes health and fitness apps like Calm and Strava or productivity applications such as Notion, whose essential features can be used freely. However, the enhanced features often need a subscription.
• Software-as-a-Service (SaaS): These apps include social design apps like Adobe Creative Cloud, Microsoft Office, and Dropbox and working productivity apps requiring subscriptions to give out value continually.

One of the most significant benefits of the subscription or paid model for mobile app monetization is steady cash inflows. Developers can now count on regular customer revenue instead of relying on a single purchase or irregular ads. Furthermore, subscription services can foster user relationships and increase customer loyalty and engagement.

However, subscriptions have their problems. This is why users must be constantly rewarded since they can easily unsubscribe from the app if they are not benefiting as expected. The application should be updated with new content frequently or valuable features that justify the user paying for it again. In fact, according to Sticky.io (2023), 81% of customers stated that the most crucial factor in motivating them to sign up for a subscription model was convenience. 

Selecting the Proper App Strategy

These are all its advantages, but it is also essential to notice that not every model mentioned above is adequate for each application. Mobile app monetization is crucial first to define the target audience or the users, the benefits of the app, and possible usage scenarios.

The two monetization strategies are prevalent in gaming apps,, which are expected to be found in-app purchases and ads. Paid, this includes video ads, where the user is paid in-game money for watching specific videos. At the same time, to make the in-app purchases, which are non-mandatory, users can spend extra rubles to enjoy the game even more.

Most content-oriented apps, including streaming or news apps, rely on the subscription model. Making some or all the content available only behind a paywall makes the users feel that they are paying for something of great value every time they pay.

Social, photo, productivity, or fitness apps can employ the freemium strategy: the application is free but contains the paid extra option. In some app monetization strategies, non-consumable IAPs like ad removal or gaining access to particular tools are good to go with a subscription-based model.

Conclusion

As for now, in-app purchases, advertising, and subscriptions reveal themselves to be the most promising approaches to mobile app monetization. The above-discussed approaches are rather advisable to be aligned with the nature of the application and the target audience of the application. Some users will be okay with using free apps that offer in-app purchases, while others will be willing to pay for apps that do not contain ads. 

Finally, it must also be noted that the key to success is finding the right balance between revenues and fun for the users. This measure from Chapter247 will ensure that when it comes to developers constantly trying out and varying revenue generation models, changing according to the practices of users is a key to sustainable success in the context of mobile applications.