How to Choose the Right Monetization Strategy for your Mobile Application?

Mobile application development has come a long way in the last five years. When Apple opened the doors for third-party app developers to create apps for the iPhone and submit them on the iTunes Store, the only way of making money from apps was through app sales. You built a great app and expected the users to pay for using it.

However, new models of making money through apps have emerged over the years. Most people do not like to pay for app anymore: we live in the age of freemiums. Sure, some utility and productivity apps that serve an essential purpose may find buyers, but most others apps can’t make much money if they rely solely on paid app downloads.

Whether you are building apps for the iPhone or Android, you need an effective strategy for monetizing your app. If you are giving your app for free, a large number of downloads will not automatically translate into revenue. Apart from straight-up selling your app on the app store, there are mainly three other methods of monetizing your app:

1. Offering Free Lite Versions to Promote Full Paid Versions

While is it not easy for app developers to sell paid versions of their apps, there is a large number of mobile users who would happily pay for an app if they were sure that it was useful. The most successful strategy for driving paid app downloads takes its cue from the craze for freemiums.

You can allow the users to download a lite version of your app. Or, you can offer a full version of your app for a limited time period. If the user wants really benefits from the app, she will hopefully buy the paid version after the trial period.

While this method will not bring any money directly, it will increase the chances of people paying money to download your app.

2. Earning through In-App Advertisements

This is, arguably, the most popular app monetization model. Free apps have a bigger chance of getting downloads on the app stores, because the users can simply download apps and start using them. For instance, there are dozens of free games and entertainment apps on Android and iOS that get millions of downloads. Not many users would pay for such apps. But, if they can get them for free, they will happily download them.

The reason many mobile application development companies invest time and energy in creating such free apps is because they get downloads easily. Once an app has a good number of downloads, you can place advertisements within the app and earn money. Most mobile users dislike advertisements if they have paid for an app, but they accept advertisements in free apps. So, you can monetize your free app and get money through pay-per-click or ad impression models.

3. In-App Purchases or Subscriptions

Some mobile apps are created for the sole purpose of selling goods. You can create an ecommerce app that lets the users purchase your goods through an app. Similarly, you can create an app for a digital magazine, new, movies, etc. that enables the users of the app to pay and subscribe to your offering.

Having said that, it is important to mention another significant method of in-app purchases. You can create free mobile games and sell numerous add-ons to the games. You can also sell game currency and game items for real money. It is not easy to succeed with this model, but a handful of developers make piles of money using this technique.

# All right. But which is the right method for my mobile app?

For developers working on addictive or useful apps that are bound to gain popularity with time, offering a free lite version or a trial version of the app is a great idea. While you end up giving lots of apps for free, if the app provides real value to the users, it will become popular quickly. The in-app purchase model is the natural app monetization choice for e-commerce stores and branded goods. The biggest benefit is that only people who actually want to buy the goods or are interested in then will download the app. While it can be challenging to get enough people to download such apps, the people who do download the app are quite likely to make purchases from within the app.

For mobile app developers who have created an interesting and addictive app with a good number of downloads, in app advertisement is the natural method of monetization. If you have created a popular app, the simplest method of making money through it is by placing advertisements in it.

What’s your take?

Here, we have taken a quick look at the most popular and effective methods of monetizing apps. Which method do you feel works the best? Please share your thoughts and experiences in the comments!

About Mohammed Anzil

Professional Blogger, SEO, and Web Developer. Founder of and CoFounder of

View all posts by Mohammed Anzil →