Mobile App Monetization

Pay Per Download: This is perhaps the most common approach to generating revenues with an app. But how do you convince a new user to pay the price you demand without letting them to try it first? If you can’t market your app as truly unique — compared to all the free apps out there — keep looking. Great marketing and PR are imperative with this model

Advertising App Monetization Model: You’ll find more people willing to download your app with no cost barrier (as in pay per download apps). The advertising model offers several “flavors.” It’s often used in mixed-model approaches. Common ad formats currently include:

  • Banner Ads
  • Native Advertising
  • Video Ads
  • Voice Ads
  • Interstitial Ads
  • Rich Media Ads
  • Location-Based Ads
  • Pop-Up Ads
  • Notification Ads

You’ll find examples of these ad types here, here, and here.

Choose the advertising app monetization model if you expect users to visit the app frequently, and stay awhile during each session. You’ll also need to collect user demographic and behavioral data to ensure ads are relevant.

In-App Purchase Monetization Model: Do you plan to sell virtual or physical goods or services from your app? This model works well for retail, gaming, or services apps. It’s been the top mobile app monetization strategy used by high-earning game apps. Be sure to include well-designed purchase incentives that don’t spoil the user experience.

Freemium App Monetization Model: This strange-sounding model replicates the subscription model used in many eCommerce businesses. If you can attract free users, and then entice them with super-unique premium features, choose the freemium app monetization model. The 30 top-grossing apps in the Apple App Store may be downloaded for free, but they all offer desirable premium content for a fee.

Subscription or Paywall Model: This app monetization model is similar to Freemium, but the content is locked, not premium app features. Users are able to view a specific amount of content for free, but then must subscribe to the app to view more. Service-oriented apps succeed with this model (think Netflix or Spotify). The Subscription or Paywall model works well when the app itself inspires repeated — and frequent — use.

The bottom line is to choose the mobile app monetization model that fits your objectives, and the analysis of your target market. In-App Purchases and Subscription models continue to be most successful at driving revenue (33% and 22% respectively), according to a recent study by Apptentive. But a hybrid approach may be best for your app. Let objectives drive the choice.