Major brands may win by being featured in alternative app stores. They have no problems with guides of popular app stores, and even attracting users and generating more traffic doesn’t make much of a difference.

For many app developers, however, the key purpose of appearing on alternative app stores is seeking new traffic sources and audience touchpoints.

Let’s get straight to it and look at nine actionable ways you can use to monetize your mobile app, whether it is on iOS or Android.

Let's not deny it—most developers don’t create apps just for fun. Mobile apps are a business, and like any other business, their goal is to generate revenue.
Here’s a couple of facts:

• According to the data.ai analysts, in 2023, users worldwide spent over $325,000 per minute in app stores. Based on this, by the time you finish reading this article, another $3,000,000 will have been spent.
• Spending on mobile advertising reached $362 billion in 2023, surpassing the economies of Czechia, Finland, and Portugal and being close to the economy of Colombia.

It sounds like a big juicy pie, doesn’t it? As a mobile app developer, you might want your chunk, but it requires putting some effort into getting it.

There are several ways to monetize mobile apps, and the success depends on various factors. These might include the type of app you’re creating, whether it’s for iOS or Android, the target audience, and which mobile app monetization models you choose. Each platform has its strengths, like different payment systems and user behaviors, which can really impact how well a particular strategy works.

As for mobile app monetization strategies—you have quite an extensive choice here. From straightforwardly taking money for using the app to earning from advertising or in-app purchasing, and more.

In-app advertising lets developers monetize free apps by displaying ads to users. Since selling apps and games is quite challenging, advertising remains one of the best (if not the only) mobile app monetization methods.

Common advertising types include:

• Banner ads
• Native ads
• Interstitial full-screen ads
• Video ads (including rewarded videos)
• Interactive and playable ads

In-app advertising can bring a steady revenue stream from a broad user base, even if only a few users make purchases. However, you need to consider the balance—too many ads can annoy users, so they just leave. Too few might not generate enough revenue. The goal is a seamless integration that doesn’t spoil the user experience.

Here, you can rely on Revenue per Thousand Impressions (RPM) as the key monetization metric. Another one is Retention Rate—the percentage of users who return to the app after their first experience. Since retaining users is typically less costly then acquiring new ones, higher retention rates mean higher profits to you.

Example: A social media app displays native ads in user feeds and video ads within video content.

One of the most popular app monetization strategies is in-app purchases (IAP). With this approach, users can download the app for free or at a minimal cost, and then buy extra features, content, or upgrades within the app. It’s especially common in games, social media, and entertainment apps, where users are encouraged to make purchases for things like virtual items, premium content, or even to remove ads.

IAP works well because it lets developers keep the app free to download while still generating ongoing revenue. It’s a strategy that works across both iOS and Android, though there are some differences in how payments are handled on each platform.

Example: In a tank battle game, players buy gold with real money to purchase premium tanks or upgrades.

The freemium model is also among the typical mobile app monetization strategies. Users can access basic features for free, while premium features require payment. This approach is effective for developers who want to attract a broad user base and then monetize mobile apps through in-app purchases or premium upgrades. It’s widely used in productivity, entertainment, and gaming apps, where users are encouraged to unlock more features as they get hooked on the app.

To successfully monetize your mobile app with the freemium model, free features need to be compelling enough to convince users to pay for premium options. The challenge lies in converting a small percentage of users into paying customers. Still, it works well when developers can offer valuable enhancements to the user experience.

Example: A to-do list app offers basic task management for free, but charges $0.99 for syncing tasks across devices.

Subscription-based mobile app monetization is growing in popularity, especially with Apple and Google promoting it. Users are charged on a recurring basis for access to premium content or features. Unlike freemium, subscriptions provide a steady, predictable revenue stream, making it a reliable mobile app monetization strategy. It's ideal for apps with regularly updated content, such as media or fitness apps, where users are willing to pay for continuous value.

To effectively monetize mobile apps using subscriptions, it’s crucial to offer content that users find valuable enough to keep paying for. A successful subscription model increases customer retention and lifetime value (LTV), but it requires premium offerings that justify the recurring fee.

Example: A streaming service offers free content but requires a monthly subscription for full access to movies and TV shows.

Paid apps are a straightforward mobile app monetization model where users pay upfront to download the app. This model is effective for high-quality apps or those offering unique features. However, marketing a paid app can be challenging because users need to be convinced of the value before they commit. It works best when developers provide a distinctive app experience that’s worth the cost.

While paid apps generate immediate revenue, they limit the monetization strategy to a one-time purchase. To maximize profits, apps need to be compelling enough to encourage users to buy upfront.

Example: A healthy recipes guide or a unique game with specialized mechanics.

Paid features allow developers to monetize mobile apps by offering additional functionality for a one-time fee. This model works well for apps that provide core features for free and allow users to purchase upgrades, such as extra tools or content. By offering features like an ad-free experience, developers can cater to both free and paying users.

This strategy combines the benefits of free app downloads with the option to monetize mobile apps through paid upgrades. The key is ensuring that the paid features offer enough value to encourage users to make a purchase.

Example: A photo editing app provides free filters but charges for advanced tools or premium filters.

A marketplace revenue sharing model allows apps to earn revenue by facilitating transactions between users and service providers. The app takes a percentage of each transaction, generating income without creating or managing products directly. This model is popular in ride-sharing, home services, and e-commerce apps.

This mobile app monetization strategy offers automatic revenue generation as transactions occur. The app remains free for users, but it requires careful management of service providers and secure payment systems to ensure smooth transactions.

Example: A ride-sharing or home cleaning service app.

In transaction-based monetization, the app serves as an intermediary for transactions, earning a commission from each one. Unlike marketplace revenue sharing, this model doesn’t involve selling products but facilitates other types of services, like ticket booking or financial transactions. It’s effective for apps that aggregate services and connect users with providers.

To monetize mobile apps with this model, developers need to build trust with users, ensuring secure and reliable transactions. It’s a scalable model as long as users continue to make transactions through the app.

Example: A service that helps users pay traffic fines or book flight tickets.

Hybrid monetization combines multiple strategies to maximize revenue potential. For example, a game may feature in-app purchases, ads, and premium subscriptions. This approach increases opportunities for developers to monetize mobile apps by appealing to different user preferences. By combining strategies, apps can generate diverse revenue streams.

This mobile app monetization model helps developers cater to a wide audience, including users who prefer free content or incremental purchases. However, it requires balancing different monetization techniques to ensure a positive user experience without overwhelming them.

Example: A game could offer in-app purchases for extra lives while showing rewarded video ads to non-paying players.

As you can see, you can monetize your app in so many ways, and choosing the right strategy is critical to the success of your business. Still, regardless of which mobile app monetization model you choose, it's important not to bump into common pitfalls that can ruin your progress and lead to ineffective monetization or even a failure to generate sustainable revenue.

Selecting the wrong monetization strategy can severely limit your app’s earning potential. For example, what works for a streaming service like Netflix might not be effective for a simple puzzle game. It’s vital to align your mobile app monetization strategy with your app's peculiarities and your target audience. If the strategy doesn't match, it can lead to frustrated users or missed revenue opportunities.

Another common mistake is choosing a mobile app monetization model that isn’t scalable. If your monetization approach doesn’t allow recurring revenue or expansion as your user base grows, it may limit your app’s potential. For example, charging users a one-time fee for your app might work initially, but it won’t generate ongoing revenue as effectively as subscriptions or in-app purchases. At this point, you need to ensure your model supports growth and repeat transactions.

Without analytics, it might be hard to optimize your mobile app monetization strategy. Data-driven insights allow you to track user behavior, evaluate which features are driving revenue, and make informed decisions to improve your strategy. Failing to integrate analytics means missing out on opportunities to fine-tune your approach, leading to wasted resources and suboptimal user engagement. Understanding how to analyze data is crucial for adjusting your monetization models and maximizing revenue.

Wrapping it up, mobile apps are here to stay as a viable and expanding business model. It goes through a lot of shifts on the way, like the Apple vs. Epic Games lawsuit, resulting in global changes in the industry.

Take iOS and iPadOS, for example, allowing apps to use third-party payment systems or large market players gaining more control over their cash flow. This shift might not be as beneficial for smaller startups, who are more likely to stick with traditional mobile app monetization methods. But more options mean wider choices, and it's good for the industry.

Equally important in mobile app monetization is ensuring your app is easily discoverable and appealing to users from the start. App Store Optimization (ASO) plays a key role here, as a well-optimized app store page is the first step in driving users to make purchases. Without strong ASO — including proper positioning, enticing screenshots, and positive reviews — even the best monetization strategies can fall short. Your app’s success doesn’t only depend on how you monetize it but also on how effectively you attract and retain users throughout their journey.

Finally, there is no one-size-fits-all solution when it comes to how to monetize your mobile app. Depending on your app type and target audience, you can choose from various mobile app monetization models. From ads and in-app purchases to subscriptions and hybrid monetization strategies, there are plenty of options to consider. The key to success lies in selecting the right strategy that aligns with your app’s features, user needs, and long-term business goals. If you’re unsure which mobile app monetization strategy is best for you, consider working with experts who can help you navigate these complex decisions.