6 Trusted Mobile App Monetization Strategies

Most of the application development projects are not considered successful if they do not generate revenue in the end. Today, we want to show and describe some of the most popular mobile app monetization strategies. 

A question, “How to monetize mobile app?” is one of the most important and reasonable questions for most SMB and startup entrepreneurs. As an experienced mobile application development company, we have faced this question many times and unfortunately, the ultimate answer to this simply does not exist. The reason is that the possible ways to monetize apps depend on each mobile application in particular.

There are many obvious and not-so-obvious ways to monetize apps. However, if you have not decided on the solution for your particular mobile application, you should not launch the development process. You must perfectly understand how the income will be generated by your mobile app to ensure the overall success of the efforts that you will need to put into the development process.

In this article, we have summed up the most popular mobile app monetization strategies that we have used in our development experience.

What is mobile app monetization?

Monetization of mobile apps is the process of generating revenue from a mobile application. That is, it’s how you translate app usage into dollars. This term includes any method of generating revenue from your app’s content or user base, for example: 

• Showing ads to users
• Selling paid upgrades or in-app items
• Charging for app downloads
• Subscriptions
• Transaction fees
• Affiliate commissions

Good monetization works to your app’s strengths and user base: certain apps sell functionality to users, others generate revenue indirectly (for example, through advertising or partnerships). The end result is the same: making your app economically viable by converting user engagement into revenue.

6 Mobile App Monetization Strategies

So, how to monetize an app? Below, we explain seven of the most popular app monetization strategies and their advantages and disadvantages.

Paid Apps

A paid app makes money by charging users a one-time download fee. Users pay (e.g. $0.99, $4.99, or whatever fixed price) once to download the app. This was amazingly popular among new apps when app stores just opened. But now, according to Statista, around 81% of iOS apps and nearly 97% of Android apps are free.

Nevertheless, typically, premium programs or games with no equivalent of a free variant continue to use this model effectively.

Advantages:

• Upfront revenue per user. You get paid for 100% of users when they download your app. Each user is a purchase.
• No ads or gimmicks necessary. Paid apps don’t often need to include ads or coax extra purchases, so it’s easier to give a clear, clutter-free user experience to those who paid.
• Committed user base. Early paying users are dedicated to your app – they’ve shown commitment by shelling out money, so they’re more engaged.
• Simplicity of monetization. The model is simple to monetize – track downloads and price. You don’t need to implement advanced in-app purchase logic or handle subscriptions.

Disadvantages:

• High user acquisition barrier. It’s tough to make users pay for an app when there are so many free options. 
• Fewer downloads. Paid apps tend to get significantly fewer downloads than free apps. You are sacrificing mass adoption, which can be a problem for network-effect apps or ad-based ones (since there are no free users).
• App store commissions. The app store will take a 15–30% commission of the price at which your app sells
• One-time revenue ceiling. You only make money once from every user. There isn’t an in-built mechanism to make more money per user after download (with the exception of combining this with other models like in-app purchase).

Because users can’t try a paid app prior to buying it, you need to have a quality app store copy, reviews, or an excellent brand reputation to convince them that it’s well worth the cost. You might also need to offer refunds or free trial versions in order to reduce buyer risk.

In-App Purchases

In-app purchases (IAP) allow users to buy digital goods or premium features in your app. The app itself is usually free to download, but users may pay for additional content or upgrades. These purchases can be consumable (consumed and bought repeatedly, like virtual money, extra lives, or temporary power boosts in a game) or non-consumable (one-time purchases that open content or features permanently, like a pro version upgrade or more levels)

Advantages:

• Large revenue potential. In-app purchases have the potential to generate a great deal of revenue, especially when you own an interesting catalog of items. A sub-group of enthusiastic consumers (“whales”) can spend a great deal. 2024 research by Moloco found that 70%-85% of IAP revenue comes from just 10% of users.
• Free user acquisition. Because the application is free to download, you remove barriers to user acquisition. You are able to acquire a huge base of users quickly, and even when only a small number of them turn into paying customers, the sheer size can be extremely lucrative. The free users aren’t lost – they increase app popularity, can be marketed to, and some will turn into paying customers eventually.
• Flexible pricing and offers. You can have different buy options at different price points (from $0.99 for small things to large $99 bundles). This flexibility allows you to squeeze value from different groups of users. New offerings, bundles, or promotions can drive purchases regularly.
• Scalable & recurring revenue. Unlike in the case of a one-time-paid app, well-designed IAPs can get users to pay over and over (especially consumables). This means that a single user can pay multiple times throughout their lifetime within the app.
• Improved user experience (if done correctly). If the user buys are indeed add-ons (added/extra content, personalization, convenience), they have the potential to make users more satisfied. Users enjoy being able to choose to pay for upgrades rather than facing a hard paywall.

Disadvantages:

• Low conversion rates. Typically, very few of the free users will ever pay. It’s not unusual that 95–99% don’t pay anything, so your income is dependent on an extremely tiny minority. You must make the app profitable and sustainable for non-payers, which can be challenging.
• “Pay-to-Win” or user frustration risk. Unless well-balanced, IAPs (especially on games) can infuriate users – e.g. if the game is not fair unless you pay, or pester users all the time to spend. This can lead to bad reviews and churn.
• Complex to implement and manage. You’ll need to integrate with app store billing SDKs, handle purchase validations, manage inventory of digital goods, etc. This adds development and maintenance overhead. You’ll also need to manage pricing strategy, updates with new purchasable content, and maybe even customer support for purchase issues.

As high as a large percentage of IAP revenue comes from an infinitesimal segment of users, your money might be too dependent on those “whales”. If they get bored, then revenue takes a dip. It might also be hard to accurately project revenue due to this unpredictability in user spending habits. This model perfectly works for dating applications like Tinder.

In-app ads

This mobile app monetization strategy generates revenue from your app by displaying ads to your users in their app experience. Essentially, you get paid by other companies (or more precisely, get paid an ad network that forwards to you a revenue share) for displaying their banners, videos, or sponsored content in your app. The most common are:

• Banner ads (small ads normally at the bottom or top of a screen)
• Interstitial ads (full-screen ads at appropriate break points, like between levels of a game)
• Rewarded video ads (users can choose to watch a video ad in return for an in-app reward)
• Native ads (ads that are made to resemble your app’s content feed).

According to Statista, mobile ad spend on mobile apps hit $390 billion worldwide in 2025.

Advantages:

• No cost to users. Ads allow you to make the app free to download and play. There is no cost to users, so you get to attract and retain many more users. Most users tolerate ads as a sacrifice for gratuitous content.
• Scales with user base. The more users (and the longer they’re in-app), the more ad impressions you deliver and the more revenue you generate. If your app goes viral and usage explodes, your ad revenue can scale directly with that usage.
• Fast and reliable revenue. You can start earning as soon as users look at ads – no waiting for them to decide to purchase. This is helpful for cash flow, especially in quantity apps. Even shoppers who would never pay for anything at all can contribute to bringing in revenue by looking at/clicking ads.
• Multiple ad formats & networks. It is very easy to integrate ads with SDKs from Google AdMob, Facebook Audience Network, etc. Experiment with formats (banner, video, native) and see what works best and least disrupts your UX. Ad networks also handle most of the heavy lifting (filling the ads and compensating you) once integrated.

Disadvantages:

• Demand a large number of users. Advertising tends to be a low-margin, high-volume business. You only make a small amount per ad view or click. That means you usually need tens or hundreds of thousands (or even more) of engaged users to earn a significant amount of money from advertising. A small niche app won’t earn a lot using this method.
• User experience impact. Come on – users tend not to like ads. Ads might annoy users, make the app load slower (ad media loading), or interrupt the immersive experience when done excessively. Disruptive ad formats (like unwanted pop-up interstitials at the wrong time) will lead to user annoyance and higher churn. There’s also the “banner blindness” phenomenon – users would even start ignoring static banner ads completely.
• Lower engagement & clicks. Even though ads are shown to many users, only a tiny fraction will click. For example, banner ads average around just a 0.1% click-through rate in apps. So, while ads are easy to implement, they may not get much active engagement.
• Risk of hurting the app’s reputation. If users feel your app is more about showing ads than delivering value, they’ll leave scathing reviews. Additionally, sometimes the ads served might be of poor quality or irrelevant (e.g. scammy ads or ads that don’t fit your audience well), which can reflect poorly on your app.

As privacy regulations increase and users become increasingly savvy, targeted advertising is hit. Apple’s App Tracking Transparency (requiring user opt-in for tracking) has significantly reduced the ability to personalize ads on iOS, which can reduce ad revenue for most apps. Furthermore, while less common on mobile than on desktop, ad-blocking browsers or VPNs can block in-app ads, which could remove a bit from your impressions.

Subscriptions

Charges the user a standard fee (monthly, yearly, or another frequency) to utilize the app or certain premium materials/features. It’s essentially “renting” the worth of the app – you get the benefits as long as you keep paying the subscription fee. This model has exploded for apps that deliver continuous value: 

• Music and video streaming
• News
• Cloud storage or productivity apps
• Exercise or meditation apps with fresh content, etc.

Apps will often offer free and premium content (freemium) and use subscriptions to deliver access to the full experience, or they may be subscription-only with perhaps a free trial. The attraction is predictable, recurring revenue rather than one-time sales. According to Statista, among the highest-grossing 250 apps (excluding games), subscriptions generated about 82% of consumer spending in 2022.

Advantages:

• Recurring revenue & predictability. Subscriptions build a recurring revenue stream. Instead of selling to a user for one time, you get paid each and every billing period until they decide to unsubscribe. This really increases the lifetime value (LTV) of a repeat user. It also adds a lot more predictability to revenue from month to month, which is great for planning and budgeting.
• Higher customer lifetime value. If you give people something that they actually like, they might subscribe for months or even years. Ultimately, you can earn a lot more money per user from a single user than you ever would have with a one-time sale. For example, a paying user of $5/month will earn you $60 in a year, whereas they might not have paid $60 upfront in the first place.
• Incentivizes continued use. Since customers are making repeated payments, they’re incentivized to actually use the app (to get their money’s worth). Likewise, you’re incentivized to keep the service fresh and valuable so they stay. That tends to create a healthier developer-to-user dynamic with a focus on long-term enjoyment. Updates, new content, and patches are the norm with subscription apps, which can lead to a better product.
• Lower upfront barrier with free trials/freemium. The majority of subscription apps utilize free trials or free base tiers to bring people in the door. That way, consumers can try the app and achieve value prior to requiring money. It’s much easier to cause someone to pay once they’ve begun to rely on your app.
• Supported by most types of apps. Subscription is a generalized method employed by various apps, ranging from entertainment (Netflix) and news (NYTimes) to utility (cloud storage) and health (fitness training apps). Any app offering ongoing content or cloud-based service can in fact apply subscriptions, making it generalized.

Disadvantages:

• Subscription fatigue. The downside to all these apps being subscription-based is that consumers are exhausted from paying for so many different things. The typical person might already subscribe to video, music, and a few app subscriptions – getting them to add another monthly fee can be tough. In leaner financial periods, consumers proactively try to cut back on subscription expenses.
• Content/value demands. To deserve a recurring fee, you need to continuously provide value. Often this means creating new content regularly (e.g., new workout classes in an exercise app, new feature drops in an SaaS platform, new courses in an e-learning app). This is work-intensive. When an app goes stale, customers will churn quickly.
• Retention and churn management. Subscriber churn (cancellation) is a critical metric. Even small monthly churn rates compound over time. You’ll need to invest in retention tactics – email reminders, loyalty discounts, win-back campaigns for canceled users, etc. It’s a challenge to maintain a high subscriber count as users naturally come and go.

Users in a few niches have free alternatives backed by advertising. A good example is Spotify, which provides ad-supported free, and YouTube, which is free with ads. Your paid music or video app has to compete with those free ones. That is, you might have to have a free alternative yourself or fantastically great exclusive content to win consumers. As an added bonus, users will be quick to give away logins or find ways to bypass paywalls if they can.

Banking and transactional apps

“Banking and transactional apps” is an app that is paid in monetary form rather than in the form of app direct payments. Fintech apps, payment apps, and online marketplace platforms are examples of such apps. The key idea is a transaction fee paradigm – the app facilitates some exchange of value (services, goods, cash) between users or between a service and a user, and the app collects a commission or fee per transaction. Your app is actually an intermediary matching deals, and you earn money by taking a percentage of each deal.

For example, a stock trading app or cryptocurrency exchange can levy a small transaction fee. A peer-to-peer payment app (like PayPal) can charge a percentage of the amount transferred (especially between currencies). A marketplace app like eBay or Etsy charges sellers a commission or fee per transaction. Ride-sharing and delivery apps such as Uber, DoorDash fall under this category as well – they connect buyers and sellers (or riders and drivers) and take a percentage of each transaction as profit.

Advantages:

• Aligned with core service (user pays for value). In transactional strategies, users pay while getting a concrete service – a taxi ride, a product purchased, or a swap of an investment. They’re paying for true value, and not just to use the app.
• High revenue potential with scale. While the volume of transactions on your platform grows, revenue can potentially grow exponentially. Typically, there is no cap on how much one user can generate through transactions if they keep using the service (vs. a one-time buy limit).
• No upfront cost = easy adoption. Most apps that use this design are free to download and free to use before a transaction takes place. This minimizes user acquisition hurdles – people can typically find your app and even use simple functionality without being forced to pay. They only pay when they buy something real and derive value (buying something, booking a trip, etc.). This “pay-as-you-go” experience might be more palatable than subscriptions or paywalls.
• Multiple streams of revenue. Aside from the underlying transaction fee, these apps are able to add similar streams of revenue. For example, fintech apps can earn interest on float, charge a premium account level, or add-on features for a recurring subscription, or put some ads on partner deals. Marketplaces can charge sellers for sponsored listings as well as commissions.

Disadvantages:

• Requires a specific app type. This monetization strategy isn’t for all. It will only succeed if your app inherently comprises transactions or money management. Developing such an app usually entails sophistication (you may need to implement payment processing, escrow, or bank integration). If your app is, say, a content stream or a single-player game, you can’t simply wake up and monetize by charging transaction fees – it has to be built around commerce or finance from the ground up
• Volume dependent. The upside potential is huge with scale, but there will be low volume, i.e., very low revenue, in the beginning for a new transaction app.
• Trust and safety concerns. Since money is changing hands or being stored, users need to trust your platform. You’ll likely need to invest heavily in security, fraud prevention, and compliance (especially in fintech or peer-to-peer marketplaces). Any breach or high-profile fraud incident can destroy user trust and thus your monetization. Regulatory compliance (KYC laws, payment licenses, etc.) can also be a significant hurdle and cost.

Your users and suppliers will be fee-conscious. If your commission is seen as too high, users will seek alternatives or try to work around the system (e.g., a seller taking a discussion off-platform in order to avoid fees).

There’s competition too. For instance, stock trading apps competed with each other to zero out commissions in most instances, earning money in other ways. You can anticipate downward pressure on the percentage you are able to charge, which can squeeze your margins unless you have extremely massive volume or efficiency.

Affiliate Apps

An affiliate app generates revenue by directing users to third-party products or services and earning a commission on any follow-up purchases. Your app can have partner company products or items displayed or suggested on it. When someone clicks an affiliate link or uses a referral code and then buys something, you earn a percentage of that buy (the affiliate commission).

This is common in content-centered, recommendation, or product discovery apps. For example, a shopping offer curation app can list products from Amazon or other retailers with affiliate links. When a purchase is made, the app earns a percentage. Another example would be a travel aggregator app, showing flights or hotel deals – it can redirect users to a booking site and earn a commission for each booking userpilot.com Even an app or news blog might use affiliate links in stories about products that they’re reviewing.

Advantages:

• No cost to the user. Similar to advertising, affiliate monetization does not cost your users anything to use your app. This maintains the user experience pretty much “free”.
• Moderately easy to implement. There are hundreds of affiliate programs (Amazon Associates, Commission Junction, Travel affiliate networks, etc.) to sign up for. The setup may be as easy as adding affiliate tracking IDs to your outgoing links or using SDKs from affiliate platforms. You don’t have to implement complex payment systems – the transactions take place on the partner side. This renders it a moderately low overhead monetization channel, especially for content-oriented apps.
• Performance-based (Win-Win). You only get paid if a user finds the suggestion compelling enough to act upon (click and buy). It can work well – you’re selling intent. And merchants like affiliate offers because they pay only for sales. This means that it’s most likely not hard to find affiliates as long as you possess traffic, since affiliates are a low-risk kind of marketing to companies. Once your users are bigger and worth more, you can even compromise on commission rates or flat sponsorship fees.
• No interference with app stream (if done well). Affiliate links need not intrude as ads do. They can be hidden in your content (like a shopping list, or a review of a gadget on where to purchase it). The app doesn’t have to disrupt user flow with pop-ups. It earns money more invisibly. This does provide a better user experience than banner ads everywhere.

Disadvantages:

• Depends on external conversions. Your revenue depends on whether or not users actually purchase something after they leave your app. Although you might push a large quantity of traffic out, in the event that the users fail to convert on the partner site, you receive no money. Conversion rates aren’t usually stable, and you have limited influence once the user is outside your app.
• Small margins, need scale. Commission on each sale of an affiliate will typically be relatively modest (e.g., a percentage or two of the buy, or a flat fee like $5-$10 per signup). In order to generate substantial revenue, you either need to have an enormous user scale or you need to operate in a high-value referrals market (e.g., finance apps that pay out $50-$100 for credit card signup).

When a user clicks an affiliate link, typically, they are taken out of your app to an external web browser or another app to complete the action. This means you’ve essentially handed off the user – they might not come back immediately. You’ll need to design smart ways to keep users within your app or encourage them to return after completing the external action.

Different Types – Different Strategies

So, how to monetize apps in your particular case? The ideal mobile app monetization strategy tends to be dependent on the type of app and how consumers expect to engage with it. Next, we detail different types of apps and their go-to mobile app monetization strategies and specify how each type tends to make money.

Gaming Apps

Game apps tend to lead revenue by providing free-to-play access supplemented by clever in-app purchases (IAPs) and advertising. Almost every mobile game lets people download and play for free and make money selling virtual content like extra lives, power-ups, aesthetic effects, or unlocking levels. They also most often use opt-in advertisements – as an example, a rewarded video that gives the player bonus coins for watching.

The secret is to find a balance between monetization and enjoyment. Wonderful games keep users hooked on fresh content and only induce expenditure in ways that contribute to (not disrupt) the playing experience.

Social Media & Communication Apps

Social and communication apps monetize primarily by leveraging their gigantic user bases and usage rates. Advertising is the bread and butter for most social sites – consider sponsored content inside feeds or banner ads within chat apps. Some networks also include premium subscriptions or paid versions (e.g., an ad-free experience, advanced chat features, or exclusive content) for heavy users who will pay.

Most social apps also allow user-driven monetization. Creators are paid through tips, in-app coin systems, or paid live events, with the platform taking a percentage. The strategy in this case is to earn money without turning off the users, and therefore such apps focus on discreet adverts and voluntary upgrades while basic communication is free and fun.

FinTech & Banking Apps

Finance apps (budgeting software, banks, and investing websites) usually use a blend of freemium alternatives and charge for services. It is common to offer a free version for the basic requirements (budget tracking, inventory tracking, etc.) and charge additionally for more sophisticated capabilities like in-depth analysis, personalized suggestions, or advanced trading capabilities.

The majority of FinTech applications are paid using subscriptions (e.g., regular monthly charges for deluxe services or extended utilization limits) or usage-payment fees – i.e., charging a low fee on trades, transfers, or foreign exchanges. Trust is essential in this segment to monetize mobile apps. If they feel safe and value it, they’ll pay to upgrade or spend more in the app, which can boost revenue (e.g., interest on balances or referral fees on financial products).

E-commerce & Marketplace Apps

E-commerce and marketplace apps earn revenue directly by facilitating transactions. Sales commissions are a common tactic – the app takes a percentage whenever something is bought or sold on the site. Some marketplaces include listing charges or premium listings for sellers to be seen more. Advertising and partnerships might also be part of the apps, such as having sponsored items or promotions from brands for money.

Also, the majority use membership programs (e.g., a pay-for-premium loyalty club with free shipping or exclusive discounts) to generate repeat revenue and increase purchase volume. Ultimately, e-commerce revenue is the volume of transactions and trust from the consumer: a smooth, trusted buying experience keeps buyers and sellers loyal, generating increased fees and commissions for the platform.

Health & Wellness Apps

Health, fitness, and wellness apps mostly use freemium and subscription models. They usually provide minimal features for free – e.g., habit tracking or a sample of workout plans – and charge for the premium access to the full set of content or for personalized advice. For example, a meditation app may charge for complete access to its library and personalized programs, while a fitness app would provide premium workout plans or 1:1 coaching for a fee.

Some health apps also utilize one-time in-app purchases (like buying a new set of yoga classes or diet regimes in advance) alongside a freemium model. Monetization success within this segment hinges on performance and activity from users. If users see positive results toward enhancing their well-being, they will pay for an upgraded plan and stick with it, providing the app with steady, recurring revenue.

Media & Entertainment Apps

How to monetize your app in the media and entertainment segment? Video and music streaming apps, news, and article aggregators generally rely on a subscription-based monetization strategy for apps. The user pays a monthly or annual fee in return for a vast repository of content, an ad-free viewing experience, or special shows and features. Some of these apps also have an ad-supported free version to reach a wide audience (e.g., a streaming music app with free streaming but with the occasional advertisement, plus a paid, ad-free alternative). In-app purchases could be involved as well (e.g., paying to rent a movie or buying an e-book via an app).

The mobile app monetization strategy focuses on the value and convenience of content. By repeatedly delivering content individuals love, these apps encourage consumers to maintain their subscriptions. High usage translates to users feeling that they are getting their money’s worth, which generates regular, recurring revenue for the app.

AI-Powered Apps

AI apps (such as AI chatbots, image-making software, or smart productivity apps) are now a new category, largely generating revenue through usage-based subscriptions. The core AI functionalities are typically free in a limited volume, but users pay to raise usage caps, accelerate processing, or acquire more advanced capabilities.

For example, a writing assistant computer program might offer a free fundamental plan and require payment for business plans in case one requires generating more content or access to better templates. Other AI apps have mechanisms using credit or tokens where people purchase bundles of AI usage (e.g. a bunch of questions or picture generations).

When these apps become increasingly better and learn from increasingly more data, providing increasingly more value with the passage of time, the users who rely upon them are happy to subscribe or continue making repeat purchases. This monetizing apps strategy implies getting addicted to a useful free product and then turning heavy users into payers by providing huge boosts in efficiency or creativity, all while repeatedly demonstrating the value of the AI in solving real-world issues.

Develop your own app with OS-System and start get money

Monetizing mobile apps starts with building great apps – and that’s where OS-System can help. OS-System is a seasoned mobile app development company that specializes in turning ideas into successful, revenue-generating applications.

With over 15 years in the industry, our team of 40+ experts has seen what works and what doesn’t across various app domains. When you partner with OS-System, you’re gaining a strategic development partner that understands the business side of apps, including how to monetize mobile apps.

Conclusion

The best way to monetize an app completely depends on its specifics. To select the most suitable method for your business, you should analyze all the pros and cons of each.
If you want to make sure that your mobile app development project will be beneficial and attractive for customers, get a free quote from an experienced team.