There are around 2 million apps available for download from the Apple App Store, and nearly 3.3 million apps available on the Google Play Store.
With competition so fierce, app developers and publishers need to stay informed on the latest mobile app monetization strategies to stay ahead. In this post, we explore how to monetize an app effectively by looking at some proven methods developers can use to generate more revenue.
What Is Mobile App Monetization?
Mobile app monetization is the process of generating revenue from a mobile app.
There are multiple monetization methods that leverage an app’s user base to generate revenue, including in-app advertising, in-app purchases, the freemium model, and more.
Why Is Mobile App Monetization Important?
While 77% of apps in the Apple App Store were paid apps in 2009, only 4.9% currently require payment at download. Meanwhile, in the Google Play Store paid apps account for only 3.01% of all mobile apps.
This shift to free apps has meant app developers have had to think of smart ways to generate app revenue.
To ensure an app continues to grow its revenue while maintaining a stellar user experience, app developers can adopt one of the following app monetization models. Alternatively, they can implement a hybrid app monetization approach, combining two or more methods to generate revenue.
12 Best Mobile App Monetization Strategies In 2025
1. In-app Advertising
In -app ads are ads users see when using an app. These include banner ads, interstitial ads, video ads, native ads, and text ads.
In-app advertising remains one of the most effective app monetization strategies, with ad spending in this market projected to reach $390 billion worldwide by 2025. The industry is expected to maintain steady growth, with a compound annual growth rate (CAGR) of 8.17% from 2025 to 2029, resulting in a market value of approximately $533.90 billion by 2029. On average, ad spending per mobile internet user is anticipated to reach $59.23 in 2025. Globally, the United States is predicted to lead the way, contributing the highest ad spend at $147.50 billion in the same year. This upward trend highlights the growing significance of in-app advertising as a revenue driver in the digital economy.
Advantages of In-app Advertising
1. Better Results
In-app ads have been shown to perform up to 11.4 times better than banner ads on mobile websites.
2. Better Targeting Capabilities
With in-app advertisements, your viewer chooses to download the app if you advertise relevant apps with a specific targeting audience, making your marketing more effective.
Disadvantages of In-app Advertising
1. Low Engagement
Although the audience is a captive one, the number of clicks can be low. With an average of a 0.1% click-through rate (CTR) on banners, these ads are probably not going to get a great deal of engagement.
2. Competitor's Promotions
Your competitors might end up appearing in the in-app ad, so a user watching might end up clicking on the link and installing the app.
2. Use Interstitial Ads to Grow eCPM
With increasingly sophisticated analytics available to developers, app publishers now have unparalleled insight into user behavior. These insights have meant app developers have begun to pivot away from standard in-app ads such as banner ads in order to combat banner blindness and mitigate user disinterest.
One of the most effective in-app ad alternatives are interstitial ads. Unlike banner ads, which have size restrictions and are persistent and intrusive, interstitial ads cover the entire mobile screen and occur at natural transition points within the user flow.
In the United States, the eCPM for in-app Android interstitial ads is $10.45.
Advantages of Interstitial Ads
1. Powerful User Engagement
The level of viewability that interstitial app ads get cannot be matched by banner ads. A full-screen ad is effective as it is almost impossible to ignore.
2. High CTR and CPM Rates
Given their higher engagement rates and better CTR, advertisers are often willing to pay more for interstitial ads.
Disadvantages of Interstitial Ads
1. Penalties for Improper Implementation
Publishers are required to implement interstitial ads in line with Google's guidelines and recommendations. Failure to do so can result in a Google penalty.
2. Delayed Loading Time
Given their size, interstitial ads have the potential to cause slower load times. This can impact the overall user experience.
3. Use Native Ads to Improve CTR
Native ads are designed to integrate seamlessly into their host app, appearing as another post in the feed. When implemented correctly, these ads create minimal disruption to the user experience.
Native ads continue to outperform traditional display ads in terms of engagement. Recent data highlights that the click-through rate (CTR) for native ads is 0.16% on desktop and 0.38% on mobile. These figures significantly surpass the 0.11% CTR observed with traditional banner ads. Additionally, the global native advertising market is on track to reach $400 billion by 2025, with the U.S. leading the charge, accounting for $140 billion in native ad spending.
Advantages Of Native Ads
Improved User Experience
Since native ads are non-disruptive and non intrusive, they result in a better app browsing experience for the end user.
Disadvantages of Native Ads
Customer Targeting Can Be Complex
For launching targeted campaigns, advertisers need to pull more customer data, build unique audience segments, and make sure that their content is personalized to each demographic's interests and behaviors.
4. Freemium Subscriptions Can Drive Conversions
Falling under the broader umbrella of subscription apps, “freemium” is a mobile app monetization model with several advantages.
After users download a free app they are then offered in-app purchases that give them exclusive access to premium features, additional content, or digital goods.
Spotify is perhaps one of the best examples when it comes to the freemium app subscription model. Spotify, a music app that was developed in Sweden in 2006, was started as an alternative to the pay-per-song model of iTunes and the illegal pirating of downloaded music that was proliferating at the time.
Spotify offers many of its premium app features to its free users. However, for a monthly subscription fee, users are able to unlock premium features, including an ad-free version.
Spotify has set a remarkable benchmark in the freemium app model, achieving conversion rates far beyond industry norms. Typical freemium apps see visitor-to-freemium conversion rates ranging from 11.8% to 15.5%, with freemium-to-paid rates between 2.6% and 5.8%. In comparison, SaaS companies with free trials see conversion rates from 7.8% for opt-in trials to 17.8% for paid upgrades, with opt-out trials achieving much higher paid conversion rates of 49.9%. Spotify stands out with an impressive 46% of free users upgrading to premium subscriptions. As of 2024, the platform has successfully grown its premium subscriber base to 252 million. This success shows Spotify’s exceptional ability to attract free users and effectively convert them into loyal, paying customers.
By constantly experimenting, A/B testing, and focusing on their users, Spotify has been able to create a “dynamically changing user-interface, behavioral prediction algorithms, and an ever-expanding catalog of music”.
Advantages of Freemium Subscriptions
1. The Freemium Model Is Scalable
One of the greatest advantages of this monetization method is that it allows a new venture to scale up and attract a user base without the costly overheads of traditional marketing and sales campaigns.
2. Try Before They Buy
Freemium subscriptions give users the ability to try out your app before they commit to paying for it.
3. Wider User Base
Freemium subscriptions can help you generate revenue from users who would not otherwise be willing to pay for your app.
Disadvantages of Freemium Subscriptions
1. Limited User Interest in Upsell
There is a potential for decreased revenue if users do not upgrade to the paid app.
2. Affects User Experience
There is also the potential for users to become frustrated with the app if they feel like they are constantly being bombarded with ads or upsells.
3. Requires Careful Implementation
Freemium subscriptions can sometimes be confusing for users, which can lead to them unsubscribing or simply not using the app.
5. Premium Subscriptions to Deliver Stable Revenue
Premium mobile apps are paid apps that run via subscription models. As opposed to freemium models, they require users to sign up for a fixed fee immediately upon download. This means revenue is directly tied to the number of downloads.
Subscription-based services are key to consistent revenue generation. By 2027, the United States is projected to have 458 million SVOD (Subscription Video On Demand) subscriptions, reflecting the growing consumer preference for digital media platforms. Netflix is expected to maintain a strong foothold with nearly 70 million subscribers in the U.S. alone. However, Amazon is forecasted to outpace Netflix, reaching over 101 million subscriptions, solidifying its position as a leading platform. Meanwhile, Disney+, a significant player in the streaming industry, is anticipated to gather approximately 51.3 million subscribers by the same year. These figures highlight the intensifying competition and the expanding market for subscription-based services in digital media.
Advantages of Premium Subscriptions
1. Reliable Income Stream
App subscriptions offer a reliable and predictable revenue stream for app developers.
2. Ensures Longevity
Premium subscriptions can help to ensure that an app remains accessible and useful for its users over time.
Disadvantages Of Premium Subscriptions
1. Expensive
Premium subscriptions can be expensive for users, especially if they don't use the app often, leading to a decline in user numbers.
6. Use In-App Purchases to Create Repeat Customers
In-app purchases are another monetization method that is gaining momentum in the digital ecosystem, particularly in the gaming arena.
In-app purchases allow users to use real money to purchase features or items while playing a mobile game.
Depending on the game type, this can be anything from free lives, to extra coins, to the ability to unlock hidden or previously unachievable levels.
While the option of in-app purchase can be introduced at any point in the game, the smart way to monetize your app in this way is to analyze user behavior and strategically offer in-app purchases at points throughout the gaming app where users need help.
The in-app purchase market is experiencing exponential growth. Valued at $209.13 billion in 2024, it is projected to reach $257.23 billion in 2025, with a CAGR of 23.0%. By 2029, the market is expected to reach $657.18 billion, growing at a CAGR of 26.4%. This expansion is driven by smartphone penetration, subscription models, and emerging market growth. Key trends include mobile gaming dominance, AR integration, and increasing demand for digital goods and personalized services, highlighting the evolving role of in-app purchases across various app categories beyond gaming.
The process of setting up payment for in-app purchases is also simple. When a user signs up to the Google Play store of the iOS App Store, they have the option to add a credit card to cover any in-app purchases and other app-related costs.
When a user decides to procure an in-app purchase, it is simply charged to their credit card, with app stores taking a commission.
Types of In-app Purchases
1. Consumable
The most common type of in-app purchases in mobile games, consumables refer to items such as in-game currency, bonus health, or power-ups.
As the name suggests, once these in app-purchases have been used they disappear, but can be purchased again at any time. While most games offer a certain amount of these consumables for free, consumables are a great option for users who don't like the hassle of waiting to gain these items and are happy to pay to save time.
2. Non-Consumable
Unlike consumables, when users buy non-consumable in-app purchases they have permanent access to them. Examples here include unlocking hidden levels, bonus characters or cosmetic items.
3. Auto-Renewing Subscriptions
In-app subscriptions refer to regular payments users make to access premium content (somewhat akin to the freemium model mentioned above).
In mobile gaming, subscriptions can be set up to last for varying periods of time and to unlock everything from exclusive gameplay items to premium versions of the game.
4. Non-Renewing Subscriptions
Non-renewing subscriptions act in the same way as renewable subscriptions, except that mobile users must manually renew their subscriptions.
Advantages of In-app Purchases
1. Convenience
In-app purchases are convenient for users as they can make purchases without having to leave the app.
2. Flexibility
In-app purchases allow developers to offer a wide range of content and features for users to purchase, providing a flexible monetization strategy.
3. Effectiveness
In-app purchases have become a major source of revenue for gaming and non-gaming apps alike. Indeed, one survey found that developers found in-app purchases to be the second most effective monetization strategy, behind only rewarded videos.
Disadvantages of In-app Purchases
1. May Alienate Users
Users may feel like they are being "nickel and dimed" if they are constantly being asked to make purchases. Moreover, if the developer is not careful with the types of purchases on offer, the game may be dismissed as a “pay-to-win” app.
2. May Damage the Brand
There is always the risk that users will make an in-app purchase and then be disappointed with the product, which can lead to negative reviews and decreased downloads.
7. Affiliate Marketing Offers
Many major technology companies, including Google, Apple, and Microsoft have affiliate programs open to app developers.
These affiliate programs involve promoting other mobile apps within your app. While the commissions offered in this app monetization strategy are generally not high, app developers do have the choice of which apps they wish to promote, which can encourage users to associate their app with similar brands.
The affiliate marketing industry continues its impressive growth, with a projected compound annual growth rate (CAGR) of 18.6% between 2023 and 2032. By 2027, the global market is expected to expand from $27.8 billion in 2024 to $48 billion. Mobile traffic now drives 62% of affiliate visits, and businesses earn an average of $6.50 for every $1 spent. The United States leads the market with a 38% share, followed by Europe at 27%. Key growth sectors include e-commerce, finance, health, and SaaS products.
These numbers clearly underscore the importance of affiliate revenue for app publishers.
Advantages of Affiliate Marketing
1. Inexpensive for Publishers
Affiliate marketing can be used to generate revenue from an app without having to charge for downloads or in-app purchases.
2. Build Brand Relationships
Affiliate marketing can be used to promote and sell products or services within an app. As publishers generate more sales, they develop relationships with brands that can in turn open newer avenues for revenue generation.
Disadvantages of Affiliate Marketing
1. High Competition
Affiliate marketing can be quite competitive, as companies vie for affiliates who can promote their app effectively.
2. Risks Brand Trust
Affiliate marketing can be risky, as affiliates may promote an app in a way that does not reflect the app's quality or user experience.
3. Time Consuming
Affiliate marketing can be time-consuming, as affiliates need to be constantly recruited and managed.
8. SMS Marketing
While SMS marketing may be considered a little old school, when done with style, smarts, and a touch of humor, it can be an effective way to reach out to your users and offer them discounts on in-app purchases or premium subscriptions.
According to the latest research, SMS marketing continues to grow at an annual CAGR of 1.95%, and is expected to reach a market volume of 870 million by 2029.
It is essential to ensure that the people you are reaching out to have explicitly consented to your use of their data. Think carefully about the length of the message and time you are sending it—nobody wants to read a novel about your app at dinner time.
Advantages of SMS Marketing
1. Easy to Implement
SMS marketing is easy to implement. Data can be collected via in-app prompts and messages can be sent via mobile marketing automation.
2. Effective in Retaining Users
SMS marketing has a click-through rate (CTR) of 18%, significantly outperforming email’s 2.5%. This higher engagement rate makes SMS a highly effective channel for directing traffic to websites or landing pages. Its strength lies in its ability to capture immediate attention, making it ideal for time-sensitive campaigns and promotions.
Disadvantages of SMS Marketing
1. May Be Perceived as Being Spammy
SMS marketing can be intrusive and disruptive, especially if people are not expecting it.
2. Reduced User Data
It can be difficult to track the effectiveness of SMS marketing campaigns, since people may delete messages without reading them.
3. Doesn't Suit All Brands
SMS marketing may not be well-suited for all brands or products, especially if the target audience is not likely to be responsive to text messages.
9. Email Marketing
Email marketing is a highly effective tool for mobile app advertising, offering an exceptional return on investment (ROI) of 3600%, or US$36 for every $1 spent. Additionally, 59% of consumers say that email marketing influences their purchasing decisions. This highlights the power of well-targeted and relevant email campaigns in shaping consumer behavior and driving sales, making email a crucial component of successful app marketing strategies.
Advantages of Email Marketing
1. Emails Speed Up the Buying Process
Email marketing outperforms all other channels, including social media and search, in driving conversions. Reports show that 66% of online consumers made a purchase following an email marketing message. The key to its high conversion rate lies in the ability to segment lists and customize messages to individual preferences, a strategy that internet marketers believe significantly increases effectiveness.
2. Easily implemented
Email marketing is relatively easy, and cheap to implement. A simple in-app subscription gives access to user email addresses, which can then be used to send a variety of marketing emails.
Disadvantages of Email Marketing
1. May Devalue the Brand
Email marketing may be considered spammy, especially if users haven't subscribed to the brand's emails.
10. Sponsorship Ads
Another overlooked, but highly beneficial, app monetization model that is available to publishers is a sponsorship arrangement. If your mobile app has a large user base with high user engagement, this model may be ideal.
It involves finding a single company to become your app's investor/sponsor and giving them exclusive access to advertising to your user base.
This can be done through your sponsor covering a more significant portion of the app's interface with its logo, via a splash screen that is visible to your app users, or via push notifications.
When considering sponsorship as a way to monetize apps, developers should think deeply about their user base, and which products and services would be the best fit for their brand to further user acquisition.
Advantages of Sponsorship Ads
1. Audience Targeting
Sponsorship ads can be targeted to a specific audience, which can result in higher conversion rates.
2. Cross-Promotion Opportunities
Sponsorship ads can be used to cross-promote other products or services, which can result in increased user acquisition and revenue.
Disadvantages of Sponsorship Ads
1. Difficult to Find Sponsors
Not only do developers need to find a sponsor willing to partner up on this strategy, it needs to be a brand that has a similar user base—otherwise this strategy can fall flat..
11. Use Licensing for More Predictable Revenue Streams
If your application sits in one of the app categories that by its very nature collects user-generated data (think geo-locations), you may want to consider licensing this data as a monetization model.
Again, it is imperative that any data you collect and license has been explicitly signed off on by the users involved.
Licensing can be a great route of app monetization, as it allows the users to access the app for free, while the app is paid for by the licensing.
An example of this app revenue method can be seen with the highly successful traffic and navigation app Waze, which licenses its community-driven data collection to businesses wanting to place location-based ads.
Advantages of Licensing
1. Consistent
It can provide a reliable and predictable stream of revenue.
2. Data Control
It can help to ensure that data is used in a way that is consistent with the company's brand and values.
Disadvantages of Licensing
1. Cost
Licensing data can be expensive for app developers, especially if they are small or independent developers.
2. Time
Licensing data can be time-consuming for app developers to find and negotiate with data providers.
3. Limits Other App Monetization Methods
Licensing data can limit the ways in which app developers can use and monetize their data, thereby impacting their ability to leverage other monetization methods. For instance, a licensing agreement may restrict a publisher from partnering with certain sponsors or running certain kinds of ads.
12. Crowdfunding
Crowdfunding can be an effective way to inject funds into a venture, especially in the early stages of a free app's development,
If done right, crowdfunding platforms such as Kickstarter, IndieGogo, GoFundMe, and Patreon can offer app developers monetization opportunities matched by few other strategies.
For instance, as of 2024, the top three most-funded apps on Kickstarter are:
Advantages of Crowdfunding
1. Provides Access to a Large Audience
Crowdfunding allows developers to tap into a larger audience of potential app users and supporters than you might be able to reach on your own.
2. Injection of Funds
Crowdfunding can provide a quick infusion of cash to help you get your app development project off the ground.
3. Community Building
Crowdfunding can create a built-in community of users and supporters who can provide valuable feedback and help promote your app.
Disadvantages of Crowdfunding
Competitive Marketplace
With a large pool of apps competing for funders' attention, having a strong brand voice and the resources to get this voice heard through the surrounding “digital noise” is essential. Without a clear vision, it may be difficult to get the crowdfunding ball rolling.
Three Best Practices for Mobile App Monetization
It is important to ensure that the user experience is protected when monetizing apps. No matter which popular app monetization strategy a developer decides to employ, it is essential that app monetization does not override the importance of the user experience
For example, if in-app ads are part of the strategy, the correct ad format—be it video ads or interstitials—should be chosen to ensure minimal disruption to the app's user flow. Ad revenue is great, but not at the expense of paying users.
In addition to this, developers should consider the following when looking at revenue building for their mobile apps.
1. Invest in User Acquisition
As there will always be user churn, developers should be constantly investing in user acquisition. New users are an integral part of any mobile app's ability to not just survive, but thrive in the current market.
2. Hybrid Monetization
Implementing several app monetization models can be extremely effective as it acts as an effective hedge against the drawbacks and limitations of any one strategy.
3. Analytics and Data
One of the most effective ways to optimize an app's revenue-generating abilities is through analytics. If a developer partners with an app monetization platform, they should ensure they are receiving robust insights including revenue, user behavior, and geography. This data can then be put to good use or sold to marketers for an ongoing income stream.
Which Monetization Model Is Best for Your App?
As with everything in digital marketing, there are several things to consider when deciding which of the different app monetization strategies an app owner should use for their app. Often app developers will decide to employ several of the above approaches to generate app revenue.
In 2025, the global In-App Advertising market is expected to reach US$390 billion, with the United States alone projected to contribute US$147.50 billion. This market is set to grow at an annual rate of 8.17% from 2025 to 2029, ultimately reaching US$533.90 billion by 2029. The average ad spending per mobile internet user in this sector is estimated at US$59.23 in 2025, highlighting the increasing value of in-app advertising as a key monetization strategy.
When looking to adopt an app monetization method, an app developer should consider the following:
What Does the App Do?
App owners should consider exactly what their app's function and purpose is—what problem does it solve and how does it solve it?
This in turn, will play a large role in deciding how the app should be monetized. So, for instance, where subscription models work well for news and entertainment apps, gaming apps are more suited to in-app advertising.
Who Is the Competition?
As with all product development, competitor research is an essential part of understanding where an app sits in the marketplace.
By researching apps in a similar vertical, developers can get an understanding of which monetization strategies their competitors are using, and see if the same works for them.
Who Is the Target Audience?
Finally, app publishers need to know their target audience. Who are they? What do they want? And most importantly, what are they willing to pay for?
By establishing the above, developers can work to create a strategy, or range of strategies to ensure ongoing success.
Final Thoughts
We've covered the 12 most popular app monetization strategies in this post. The strategy that best suits an app developer will ultimately depend on a host of factors including the purpose their app serves and its target audience.
App monetization is complex. If you're new to the ecosystem it is best to get expert help.
Publift has helped its clients realize an average 55% uplift since 2015, through the use of cutting-edge
If you're making more than $2,000 in monthly ad revenue, contact us today to learn more about how Publift can help increase your ad revenue and best optimize the ad space available on your website or app.
App Monetization Strategies—FAQs
How Do I Monetize My Mobile App?
There are several ways publishers and developers can monetize their apps. The most popular of these are mobile advertising, in-app purchases, and subscriptions.
Which Are The Best Mobile Ad Networks in 2025?
The five best ad networks for mobile-based publishers in 2025 are as follows:
- Publift
- Admob
- Smaato
- Unity
- InMobi
How Much Money Can an App Make?
The amount of money an app will make depends on several factors, including the user base, the ad network, and the chosen revenue model. In many cases, a successful app can earn up to thousands of dollars per month.
How Do I Choose a Monetization Strategy for My Mobile App?
There is no one hard or fast rule for how to choose the best app monetization strategy for your app.
While the in-app purchases model may work well for a gaming app, for example, in-app ads will be a more effective way to monetize your app if you are offering news content.
The user experience is also a crucial part of the decision-making process. The right app monetization strategy should suit your target audience and how they interact with your app.
Android apps and iOS apps may also require different strategies to suit the platform and audience.