The Top 5 In-App Monetization Strategies for Mobile Apps

Ever wondered how brands make money through their mobile apps that are free to install and download? Do you want to learn more about app monetization strategies? If yes, then you have come to the right page. Here you will get to know about the top 5 in-app monetization strategies and how they impact app engagement and growth.

App monetization is the process of generating business revenue through the app. There are multiple ways ranging from deploying integrated advertising methods to showing banner ads and using rewarded video ads. A well-researched app monetization method ensures that you are delivering a great user experience to retain your customers and grow profitably.

Pro Tip

You should discuss and opt for the app monetization strategy during the mobile app development phase. This is because the type of app monetization model you choose potentially impacts the app features, layout as well as user experience.

Here are the Top 5 In-App Monetization Strategies for Mobile Apps

  • In-App Purchases (IAP)
  • Subscription Model
  • In-app Advertising Model
  • Pay Per Download Model (PPD)
  • Hybrid Monetization Model

In-App Purchases (IAP)

The in-app purchases model is one of the most popular app monetization strategies. It focuses on selling a wide array of virtual products, services, and bonuses within the application. The generated revenue through in-app purchases is divided into two categories-

  • In-Store Revenue
  • Out-of-the-store Revenue

In-app purchases work for messaging apps, dating apps, and video editing apps. But it works perfectly for gaming apps to deliver an unmatched gaming experience. It can be considered a cost-savvy way to generate in-game benefits and exclusive items that ultimately help to build a loyal customer base. This is a dominant strategy for mobile app developers, where users are spending around $380 billion globally, which makes it a compelling point to adopt this strategy.

Subscription Model

A subscription model is not uncommon among users and businesses that want to deliver the top of line services. In the subscription model, the app is free to download and asks for recurring charges to unlock the rest of the features.

With a well-implemented strategy in the subscription model, it can prove to be the best advertising model that also helps to generate predictable cash flow. Apps that offer regular updates with unique content can leverage this app monetization strategy. It is ideal for dating apps, video streaming apps, productivity apps, and fitness apps.

In-app Advertising Model

In-app advertising models can prove to be the best app monetization strategy that focuses on showing to the users. It involves the ad buyers purchasing the advertising space of the app to display ads. It is the most popular model to be used for gaming apps that can help to drive revenue through a large group of users. 

Even when it looks enticing to show as multiple ads as possible,  it is vital to ensure that the user experience is not affected due to overexposure to relevant ads.

The type of In-app advertising formats are-

  • Video Ads
  • Banner Ads
  • Rewarded video Ads
  • Native Ads
  • Interstitial Ads
  • Offerwall Ads
  • Playable Ads
  • Affiliate Ads

Pay Per Download Model (PPD)

It is the most traditional app monetization strategy in which users have to pay a one-time fee to download the app. However such types of paid apps are reliant on unique content, brand recognition, and even trusted reviews. It can effectively and consistently generate revenue if you present undeniable advantages to users.

If your app consists of unique features or you are offering something unique to thrive in this competitive mobile app market, then opting for the PPD model can help in user retention. Moreover, it is a wise decision to hire an expert from one of the top app development companies to improve app store optimization. It will be helpful to improve the ranking and visibility of the app.

Hybrid Monetization Model

When it comes to custom mobile app development, many businesses opt for hybrid monetization strategies. It is the combination of two or more app monetization strategies such as in-app purchases and in-app ads. It allows the user to generate maximum revenue from the users. 

It also boosts the app experience for the users by getting engaged with the ads within the app. The hybrid app monetization model is best for gaming apps where users can enjoy watching ads after the completion of one level or make in-app purchases for a new life.

The Conclusion

The mobile app market has immensely evolved. A decade has passed when 90% of apps were paid, but now, 95% of apps are free to download. Creating a meaningful and user-friendly app monetization strategy is vital to ensure user retention and profitability. All the above app monetization strategies can be effective based on the type of app you have. To understand which strategy will fit the best to your preferences, it is important to start by understanding whether you want your app to be paid or free.

It is recommended to test multiple strategies while calculating the metrics and KPIs such as app stickiness, retention rate LTV (Lifetime Value), and ARPU (Average Revenue Per User). Choosing app monetization strategies is not only important for generating diverse revenue but also to keep your users happy.

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