With the advent of the digital age, mobile apps have become an integral part of our daily lives, which brings a tremendous opportunity for entrepreneurs and individuals to make money with apps. According to recent estimates by Statista, there are over 6 billion smartphone users worldwide. From ordering food to booking a ride, there is an app for almost everything.
In this article, we will explore ways you can monetize your app and turn it into a profitable venture in 2024. From advertising to in-app purchases, we will cover the most popular and effective monetization strategies to help you make money with mobile apps.
So, without further ado, let’s get started!
Top 5 Monetization Strategies for Apps to Make Money
The primary objective of any business is to generate revenue, and mobile apps are no exception. Although mobile apps have the potential to generate billions of dollars in revenue, only a select few become successful.
However, there is no doubt that you can make money with mobile apps, as data suggests that the top 200 most popular apps on the app store across different platforms generate approximately $82,500 daily.
So, get ready, as we will show you the 5 monetization strategies for making money with apps in 2024.
- In-App Purchases
- App Advertising
- Subscriptions
- Affiliate/Referral Marketing
- App Sponsorship
1. In-App Purchases
An in-app purchase, also known as IAP, is a way that empowers developers to offer additional paid services, content, or functionalities to the end-users within the app after a user downloads the app. This exchange between developers and users allows developers to set a price for accessing certain premium features, exclusive content, etc.
This monetization strategy utilizes the freemium model, where users can download the app for free and later choose to pay for premium features, advanced levels, or access to premium content as part of an upgrade.
Recently, this model has become quite popular among developers and entrepreneurs as it allows them to generate revenue while providing users with a free version of the app to try before they commit to purchasing the premium features.
Types of In-App Purchases
- Consumable In-App Purchases: These are virtual goods or services that users can use or consume within the app and repeatedly buy, such as extra lives in a game or additional filters in a photo editing app.
- Non-Consumable In-App Purchases: This refers to all the permanent purchases within the app, like a subscription to a streaming service.
- Subscriptions: With a subscription, users can access a service or content regularly, for instance, a monthly subscription to a magazine or a yearly subscription to a workout app.
2. App Advertising
App advertising is another excellent monetization strategy that involves displaying advertisements within an app. These ads can take various forms, such as banner ads, interstitial ads, or video ads. Advertisers pay a certain fee for displaying their ads on your app, depending on the number of impressions, clicks, or conversions.
Additionally, you can choose to display ads from various ad networks, such as Google AdMob or Apple’s iAd, or work directly with advertisers to display their ads within the app.
App advertising is undoubtedly one of the easiest monetization strategies because it helps you generate revenue without requiring users to make an in-app purchase.
Top 5 Mobile App Ad Networks
As discussed above, several ad networks provide ads to display on your app, making it difficult to decide which ad network to use. So, for your convenience, we’ve compiled a list of the top five mobile app ad networks, which are;
- AdMob: AdMob is a global mobile ad network owned by Google, allowing you to monetize your apps through in-app ads and provide insights. It supports multiple currencies, making it easy for individuals and companies to earn money worldwide.
- Audience Network by Meta: The Audience Network by Meta (Facebook) allows you to monetize your iOS or Android apps by displaying ads from Facebook’s ad network. With this ad network, you need a mobile app available on the Google Play Store or App Store and a Facebook account. The platform is available worldwide and offers a self-serve monetization approach for easy setup and earning from ads.
- Amazon Publisher Services (APS): Amazon runs an ad network called Amazon Publisher Services (APS). It offers three services: Transparent Ad Marketplace for large enterprise publishers, Unified Ad Marketplace for small and mid-level publishers, and Connections Marketplace for browsing all vendors in one marketplace.
- MoPub: MoPub by APPLOVIN is a top mobile ad network; MoPub serves app developers and publishers worldwide. It supports different types of ads, including Interstitials, Native, Rewarded, and Banners. In addition, it offers efficient troubleshooting and technical support, as well as access to various bid strategies such as Auto CPM and advanced bidding.
- Unity: Unity Ads specializes in monetizing mobile gaming apps. It supports different types of ads and optimizes LTV. It is compatible with apps on both iOS and Android platforms and supports multiple currencies.
3. Subscriptions
Subscription is one of the lucrative monetization strategies to earn money with apps. With this strategy, you charge users a subscription fee for a certain period, mostly monthly and yearly, which allows users to access your services or products accordingly.
We can further divide it into two types, which are as follows;
- Auto-Renewable Subscriptions: This type of subscription automatically renews at the end of the subscription period unless the user cancels it.
- Non-Renewing Subscriptions: With the subscription model subscription does not automatically renew at the end of the period, and the user needs to renew it manually.
Overall, this strategy is beneficial for both users and owners. It allows users to have the freedom to choose the subscription plan of their choice, and owners can generate a recurring income based on how often users subscribe.
4. Affiliate / Referral Marketing
Affiliate or referral marketing is like having a team of superheroes helping you promote your app and earn money. Imagine you partner with other businesses or individuals with a large audience, and they help you promote your app to their followers. And in return, you give them a commission for every sale or conversion from their referrals.
It’s a win-win situation, where the referral partner earns money by promoting something they believe in, and you get access to a larger audience and more downloads for your app. It’s especially useful when your app is still new and building an audience.
With this monetization strategy, you can tap into the audience of established businesses and influencers, giving your app the boost it needs to take off. You can think of it as having a secret weapon in your arsenal, ready to help you make more money and grow your user base.
5. App Sponsorship
As you grow and you have a large number of users, then you can take full advantage of the app sponsorship monetization strategy. Essentially, it’s a monetization strategy where a company or brand pays to have its name or product associated with the app. It can include having their logo or product placed within the app or sponsoring specific features or content.
App sponsorship is a great way to generate revenue without relying on in-app purchases or ads. It also allows brands to reach a targeted audience and gain visibility within the app.
With this strategy, both parties can achieve their goals. As an owner, you can earn revenue, and the sponsor can gain exposure to a specific audience.
When Monetizing Your App: Free or Paid App – Which is the Better Choice?
Deciding whether to release a free or paid app can take time and effort. On the one hand, a free app has the potential to reach a larger audience and generate more downloads. But a paid app can generate more revenue. Both approaches have pros and cons.
Before you decide how to make money with free apps, the problem with free apps is that it often relies on in-app purchases or ads to generate revenue. In some cases, this can work, but it can also lead to a poor user experience if the app is cluttered with ads or constantly asking for money. And in contrast with a paid app, the challenge is to convince people to pay for it, which can take a lot of work.
So, the best solution is to choose a monetization strategy that fits the app and the target audience. Instead of just choosing free or paid, try experimenting with different pricing models. For example, a game app may be better suited for in-app purchases, while a productivity app may be better suited for a one-time purchase.
It’s also important to consider the target audience and what they are willing to pay. For example, a business-oriented app may be more successful as a paid app, while a consumer-oriented app may be more successful as a free app.
Thus, keep experimenting with different strategies and see which works best for your app and audience.
10 Exciting Mobile App Revenue and Monetization Statistics
Here are some of the most interesting statistics about mobile app revenue and monetization;
- In 2023, the global mobile app revenue is projected to reach $935 billion, with in-app purchases and advertising being the primary revenue sources.
- In-app purchases average $1 for iPhone users compared to $0.47 for Android users.
- The most popular monetization strategy for mobile apps is in-app purchases, followed by advertising.
- In 2023, the mobile gaming industry is estimated to bring in $133.64 billion in revenue.
- In-app purchases account for 48.2% of mobile app revenue.
- In 2022, 8% of health and fitness apps, 4.8% of entertainment apps, and 4.4% of education apps offered subscriptions.
- The top 100 non-gaming apps generate 14% of mobile app revenue.
- The average mobile app revenue per user (ARPU) is $3.52.
- In terms of subscription revenue, iOS users accounted for 78%.
- The vast majority of apps, 92% on the Apple store and 96% on the Google store are free to download and use.
Frequently Asked Questions
1- How much is it cost to create an app?
The cost of creating an app can vary widely depending on the complexity of the app, the development team, and the platform. A simple app can cost as little as $5000 to $10,000, while a more complex app can cost upwards of $100,000 or more.
2- What kind of apps earns the most money?
Games and e-commerce apps tend to earn the most money. As these apps often rely on in-app purchases and advertising to generate revenue.
3- How much money can you make from an app?
The amount of money you can make from an app can vary widely depending on the app and the monetization strategy used. A successful app can earn millions of dollars in revenue, while others may need more revenue to be profitable.
4- Can I create an app without coding?
Yes, there are many tools and platforms available that allow you to create an app without coding. These include app mobile app builders, which offer drag-and-drop development tools without requiring any coding knowledge.
Final Thoughts
Monetizing and generating revenue from the mobile app is a challenging task. There is no one-size-fits-all solution to make money with apps, as different strategies work best for different industries and apps.
So, instead of focusing on creating a free or paid app, choosing a monetization model that aligns with your industry and the type of app you’re offering is important.
However, some entrepreneurs prefer to design their apps with a monetization strategy in mind rather than the other way around. Ultimately, combining the right monetization model with strategic mobile app marketing is key to maximizing visibility and revenue.
