How to Make Money on a Mobile Application: Successful Monetizing Strategies and Models

How to Make Money on a Mobile Application: Successful Monetizing Strategies and Models

28 Jul 2022

10 min

Victoria Sheinina


How to Make Money on a Mobile Application: Successful Monetizing Strategies and Models

Have you ever thought about developing a mobile app and making money with it? Or you may want to learn how to earn money with mobile apps.

Nowadays, it is difficult to imagine a business without a mobile app. It improves the company’s communication with customers and offers them products and services. Of course, it adds a lot to the prospects of making more money.

However, creating a great money-making app requires some costs. You are unlikely to get such an app developed for free and work efficiently. If you don’t want to waste a lot of costs, you need a straightforward app revenue strategy. You should also define app monetization models to see whether investing costs in this development is worth it.

Without thorough preliminary research, it is impossible to get started with your profitable app. Don’t be too naive to believe that as soon as you get your app created, it will start generating money automatically. Neither new nor existing businesses can do it, and an app may be considered a part of business or a business in itself. It needs an effective strategy, models, and management.

If you want to know how all these work, you have arrived at the right destination.

How to Make Money on a Mobile Application: Successful Monetizing Strategies and Models

How Does an App Make You Money?

To earn money, apps do it via:

━ in-app buys;

━ in-app ads;

━ affiliate links;

━ different types of sponsorship.

You can offer products, services, or subscriptions via them, or use various affiliate programs and advertising on your app. Your application can be free or fee-paying. You can sell downloading options to users or offer unique user plans, updates, or make money via referrals. In all these cases, you need a consistent app monetization strategy, or all your efforts will be useless.

How Does an App Make You Money?

App Monetization Strategy

Most consumers who buy goods online prefer to use mobile apps. They usually spend 90% of their Internet time on devices because they like to be mobile and able to do something else alongside looking for the things they need at the moment.

The first question, therefore, is how to draw users’ interest and make them download your app. Moreover, a lot of downloads do not necessarily lead to buying and an increase of money sums in your purse. In addition, you may experience enormous expenses at first because the development costs can be both obvious and hidden. No one ever knows in advance how much money will be needed to pay developers for making your app perfect. That is why ensure that your new app will generate revenue for sure and define the ways in which it will be performing.

To continue our discussion of app monetization strategies, let’s look at app monetization for consumable products. If you want your strategy to be successful, start thinking as a mobile shopper. The number of people using a smartphone for purchasing something continuously grows. About 80% of customers order something via apps nowadays. Suppose you are one of them.

People love buying things from Amazon. However, you do not need to become one more Amazon. You won’t be interesting to anyone. Even smaller online retailers can be pretty successful nowadays due to very effective apps aimed at both customer acquisition and their retention.

When a customer downloads an app, they open a profile providing some personal information that should be reliably protected. When a buyer has this profile, they can purchase something whenever they open the app. It means that the app should have a user-friendly navigation screen to help customers scroll through the items they like and want to purchase. Then, they click on the item and can see more information and photos. They add the product to their shopping cart if they are impressed by what they have seen and read, and make a payment via the app. In this way, a buyer completes all the purchasing process within three steps, and it is a big advantage of such an app that brings a lot of revenue to the company.

Effective communication with customers is one more great benefit of a well-developed app and a helpful element of the overall strategy. The company can send notifications with product updates, offers, and discounts to evoke more interest, and it always works well.

While developing your monetization strategy to make money with mobile phone apps, you need to think carefully whether it should be a free or fee-paying app. If the app is paid, you can generate more revenues. On the other hand, if you are introducing your app and no one knows much about it, the need to pay for something unfamiliar may distract a lot of customers.

Consider an interesting fact - about 90% of all money-making apps on the Apple App Store are absolutely free. It means that free apps can make money quite efficiently. Also, take into account the fact that your app will have to withstand severe competition. There may be a lot of apps on the market that offer the same products or services and can be downloaded for free. So, every potential customer will think why they need to pay for the app if they can obtain another one in the same quality absolutely for free.

To earn money from app use available for free, think about other channels and methods of making revenue. These include:

━ video ads;

━ display ads;

━ native ads;

━ IAP & m-commerce;

━ installs and subscriptions;

━ affiliate deals.

On the other hand, if a user downloads the app for free, there may be a chance they will never use it. Users are less engaged and may entirely forget about the app. On the contrary, if a user pays some money for a download or buys a subscription, they are sure to do it purposefully. There is always more commitment because they know what they are doing and why they are doing that.

The advice is that, when you need to monetize your app for free or paid use, start with a free one and, after your brand and app becomes more well-known, opt for a paid app with a wide range of services and possibilities such an extended app can provide.

Even if you use a free app, you have a great source of revenue. It is via advertising. After your app becomes more popular, you can charge a higher rate from advertisers. You can start negotiating it as soon as you see the interest in your app increases.

App Monetization Strategy

App Monetization Models

If you are an owner of a business, you are sure to have a website for it. This site is obviously optimized for mobile devices because you cannot expect too many visitors if they cannot find you online when on the go. Therefore, if your company’s website does not support mobiles, you should prioritize this development task before any others.

Consider Your Customers’ Experience

The customer experience is the first thing you should learn everything about. Primarily, it relates to their purchasing habits. What do you think? Do your clients prefer to buy something from your company via the website or a mobile app? Apps are usually the best choice because they:

━ are more convenient;

━ are faster;

━ offer rewards and perks;

━ contain a wider variety of options;

━ provide flexibility;

━ are more attractive and entertaining.

Most users prioritize convenience. Then, user satisfaction is a factor that really matters. It depends on the speed of search and all other deals. Speed can be an issue if your website is not optimized for mobiles. Navigating through an app makes the processes much faster. If your customers realize that they can find what they want quickly, they will be coming back to your site via an app.

Another thing to consider is a checkout process. It usually takes more time on the website than on a mobile app. However, nobody likes it because of the fast pace of life in the modern world. Moreover, purchases made via apps can be paid immediately there with the help of credit cards connected to app stores, for example, Google Play for Android or Apple App Store. It is also very convenient and, in addition, safe enough. Buyers do not have to reveal their financial information every time they want to make a purchase. Only one click is needed, and the payment process is completed.

Moreover, while typing all the information on the screen, there is always a risk of making errors. That can substantially slow down the process and get the buyer upset or frustrated.

Nevertheless, don’t think that your website does not need a checkout page. You should leave this opportunity to people who want to purchase something immediately from the site. Though, it must not be your priority. In-app buying is a lot better.

Based on everything highlighted above, let’s regard some app monetization models that are quite effective.

Freemium Upsell Model

We have already agreed that free apps can make money. Therefore, you can use a freemium model, especially if you are a startup or gaming website. The idea is that the app has two versions - a free and paid one. The free version has a lot of ads and pop-ups. It also shows video or banner ads, sponsorships, and other things that irritate your target audience so much.

If a customer, despite the abundance of advertisement, prefers to use a free version, it is their choice. You will continue generating revenues from ads. However, you can offer another variant to those who feel sick and tired of constant interruptions, though are absolutely interested in your app. The premium feature of every paid version is the absence of ads, and it is a great relief to users. Their experience improves, so they will be interested in subscribing to the premium version further on.

Moreover, a free app you create for your business has restrictions, such as the number of hours or traffic amount available for using, or some specific functions or bonuses that can be obtained only with the premium account. If a customer wants to use them, they are most likely to buy an app instead of using it for free.

Subscription models can also be different. They are great for generating revenues. Upgrading apps allows users to receive more functions. For example, if the customer wants to get an unlimited number of likes, they need to upgrade their app to obtain this function. The subscription upgrades also provide such options as changing the location, rewinds, and ad-free use.

Advertising Models

In-app advertisements are a great way of making money from free apps. You can start immediately after your app has been launched.

You need affiliate marketing partners. Though, if you are a startup, you may not have many of them at once. Then, you can display your ads with the help of third-party networks. These ad networks show ads automatically to your customers, and you are rewarded.

This monetization model that helps earn money with mobile apps may vary due to the type of ads and the conditions you have negotiated with the network. For example, you can discuss a fixed fee for every view. Or the other option can be a payment for every user’s click or every action the customer has performed related to this ad. You can use such types of ads as banner, native, interstitial, and in-app video ads. Each of them can be beneficial in its unique way.

Referral Marketing Model

Referral programs are another way of using mobile advertisements for third-party products and making money. They are even higher-paying than conventional ads. What you promote in your app is a referral link. The payout uses the following schemes:

━ cost per action / acquisition (involving a free trial, making a purchase, or creating an account);

━ CPV (cost per view) that is usually lower;

━ CPI (cost per installation) that ensures payment every time a user clicks on the ad to install another app.

Nevertheless, you need to find reliable and reputable partners to implement this model.

App Monetization Models

Final Thoughts

Remember that you need to understand properly how to earn money on mobile application use because not all apps can generate money. If your new app does not have an appropriate monetization model based on a relevant strategy, you won’t gain anything from it. Therefore, you have to start with research and strategy development. Your monetization model should be unique. It won’t work if you copy it from someone else.

Consider interests, needs, and online behavior of app users. In some cases, free apps for iOS can be more beneficial than paid apps for Android and vice versa. You can also use a freemium model for both platforms.

Keep in mind that most users prefer apps to sites. However, your business is sure to need a well-structured website optimized for mobile devices.

Consider the capabilities of your budget before you start to develop a money-making application. You will need upfront costs for developing and launching processes.

If your strategy and monetization model work properly, it will help your business boost, and you are going to make progress and achieve financial success.

Final Thoughts


Contact us