How to monetize a mobile app

Did you know that the Clash of Clans game had a maximum of 2.5 million dollars daily revenue? Inspiring, isn’t it? I’m sure you wouldn’t mind monetizing mobile apps as well as the Clash of Clans developers.

In this article we’ll give you 5 mobile app monetization strategies. Your task is to analyze the strengths and weaknesses of your app and find a personal answer for the question “How to monetize a mobile app?”. The strategies can work for both iOS and Android markets.

Why wait? Let’s get started!

Services Monetization

Paid apps

This is the most straightforward model ever: if you want to buy the product pay for it. It means that people need to purchase your app from the store before they can use it.

Seems like this model is the most convenient one. Think about it: once the app gets downloaded you get your money in the pocket. However, this is the hardest part too. Very few users are ready to buy paid apps.
That’s why you need to be able to showcase the very best of your app. In the best-case scenario you should present compelling screenshots, interactive videos, 5-star reviews and, of course, list the things that make your app a must-have.

TOP Paid Apps


The paid app strategy relies on your ability to convince users spend money to buy your product. Thus, you need to put much emphasis on the way you showcase your application.


  • You earn money with every new download
  • Users are more engaged (since a person paid for your app, they tend to value it more).
  • Your app can offer better user experience by not integrating ads since you’ll earn money in different way.


  • You’ll probably have a hard time selling your app due to the high level of competition. App market is oversaturated with free apps. On the other side, this gives you incentive to work harder to make your app the cream of the crop.
  • Stores will usually take part of your income (For example, App Store charges around 30% of the app’s price for each sale)

Read also: Case study: marketplace app development

In-app advertising

This strategy is by far the most popular. It is usually integrated into free apps. In this model your goal is to get as much users as possible since your revenue will depend on how many people have interacted with ads.

The most prominent example of an app using in-app advertising is Facebook. As you probably know Facebook app is free to download. However, to make money they show highly targeted ads. This mobile app monetization model has proven to be pretty profitable for the social media giant.

Facebook Ads


With in-app advertising you basically offer a free app with integrated ads. You can work either with a mobile ad partner or independently.


  • You can rapidly gain users since people don’t have to pay to download the app
  • The profits might be really good as long as you use well targeting ads. Thus you need to know as much as possible about your users needs and hobbies.


  • It’s easy to cross the line and repel users from your app. No one likes redundant ads.
  • This strategy can negatively affect your app’s user experience, since the ads might take up big part of the screen and distract or even irritate users.


Freemium model is somewhat similar to the in-app purchasing strategy. It implies that your app is free, however, some features are gated. This means that users have to pay in order to get certain premium or proprietary functions of your app.

Basically your goal is to develop a free app that would attract users and make them unlock the paid features.

The most successful app that uses freemium model is a well-known game Angry Birds. You can download the app for free. However, some features (like additional levels, playing with your bird’s looks) cost money.

Angry Birds

Angry Birds developers implemented the concept where they let people get addicted to the game and eventually make them wanna buy extra goodies.


Long story short: you offer a free app with some paid juicy features. Your goal is to get users captivated by the free version in order to make them be willing to pay for some extra fun.


  • Since the app is free you can get tons of users to download it.
  • This model can be paired up with practically any other model from the list.


  • You risk losing majority of new users by offering too few free features.
  • If you make too much goodies complimentary the profits might be extremely low.

In-app purchases

This model is exactly what the title says. It is generally used by the developers of free apps, however, it can work out to monetize mobile apps that cost money.

Basically your app has some goodies that can be purchased. It can be anything from character clothes and app plugins to in-game currency and health potions. The important thing here is to make those goods fit naturally into your app.

By no means, the most popular app that rips benefits of in-app purchases is the Clash of Clans game. In Clash of Clans you can buy gold, elixirs and other goodies for real money.

Integrating in-app purchases made it possible for Clash of Clans to make $2.5 million daily in 2013. Even though the revenue dropped down and is $1 million a day as of now, we are positive that no one would mind this kind of profit.


In a nutshell, you offer some items that can be bought for real money or in-game currency, which costs real money. The important thing here is to make in-app purchases look naturally.


  • Very flexible model. It might be used along with any other monetization strategy.
  • Users who buy items will get more engaged since they’ll value your app more.
  • You can easily add/remove items from your store. Besides, you can come up with cool ideas for different holidays, like Halloween or Christmas.


  • Stores usually get some part of the revenue for each item sold.
  • Recently in-app purchases model has been getting cracked down by the U. S. government. The reason is that some kids are making accidental purchases and their parents are forced to face music instead of their children.


This model is a newcomer in the sphere of monetization strategies. However, it’s becoming more and more popular.

The way it works is: you form a partnership with advertisers who praize your users for completing certain in-app actions. You get paid to let the advertisers be part of the incentive system.

RunKeeper is the most prominent app that makes use of this model. Its developers decided to use incentivized advertising by giving their users the possibility to unlock exclusive rewards or get promotions.


In a nutshell, this model entails having business with advertisers who fund rewards to your users. Your revenue depends on number of interactions between the users and your ad partners.


  • Flexible and can be paired up with any other app monetization strategy.
  • Everyone gets what they want. It’s a win-win-win kind of model.
  • Users are motivated to generate revenue for you and generally become more engaged by interacting with your app more.


  • Given that the model is “fresh” you take certain risks by trying it out.
  • Some of the actions are difficult to incentivize using this strategy (like downloads and social sharing – Apple is cracking down on it).



We did our best to help you figure out how to monetize your app. In order to find the most effective for you we advise to thoroughly analyze your app according to the useful tips we gave you. Once you define the best strategies go ahead and try them out!

Don’t be afraid to pair up different models for monetization of your mobile application. This might not only double but increase your revenue exponentially. But try not taking any strategy too far: balance is the key.

If you have any questions regarding your future project, feel free to contact us. We kick asses when it comes to developing apps with smart custom design!


Vadim Getman

Vadim Getman