Mobile app monetization is the process of generating revenue from mobile applications. In the ever-evolving landscape of mobile apps, staying ahead of the monetization game is a paramount challenge for B2C mobile app companies.

Many new array of ingenious strategies has emerged, reshaping the way apps generate revenue and engage users. Let's explore them!

What is mobile app monetization?

Mobile app monetization means finding ways to make money and generate revenue from your app. When users download and use your app, you turn their engagement into income. Apps usually earn money through ads, in-app purchases, subscriptions, or partnerships.

Why mobile app monetization is important?

The dramatic surge in the availability of free apps through app stores over the past 15 years has turned app monetization into a crucial consideration for app owners on a global scale.

In 2009, approximately 77% of apps in the iOS App Store were paid downloads, but today, only about 10% of apps require an upfront payment. The proportion is slightly higher on the Google Play store, where paid apps make up around 31% of the mobile app offerings.

This transition toward free apps has compelled app developers to completely rethink how they generate revenue from their creations.

To ensure a steady growth in revenue for their apps while upholding an exceptional user experience, app developers have the option to embrace one of the subsequent monetization models.

The Challenge with monetizing apps

Making money from apps can be rewarding but also tricky. Here are some common challenges:

• App users can be resistant to ads: Users often perceive advertisements as intrusive, leading to negative user experiences and potential app abandonment.
• High-value users can be hard to find: Identifying and engaging users who are willing to make significant purchases or subscriptions can be a challenging and resource-intensive task.
• Lack of visibility into user experience: Without comprehensive insights into how users interact with monetization features, optimizing user journeys and maximizing revenue becomes difficult.
• Lengthy QA processes: Ensuring monetization features integrate smoothly with existing app functionalities often involves extensive quality assurance processes, delaying feature rollout.
• Manual workflow messiness: Managing complex monetization campaigns manually can lead to errors, inefficiencies, and suboptimal revenue outcomes.

Top 6 mobile app monetization strategies

In-app messages

In-app messages emerge as a game-changing strategy to tap into your existing user base. These messages also highlight key monetization features, using tooltips, spotlights, blinkers, and coachmarks to direct user attention. For example, real-time offers via in-app messages effortlessly convert uncertain users into enthusiastic participants

But there's more – in-app messages also nurture user understanding, guiding them from casual users to loyal paying customers. They can even re-engage users at monetization crossroads with instant coupon codes and compelling offers, boosting conversion rates.

For instance, Tokopedia, a prominent e-commerce company in Indonesia, has implemented a floating action button to showcase these deals to their users while the users browse the app.

In-app advertisements

Monetizing your app through advertisements or highlighting the monetization feature through ads is often a swift and effective strategy. Various mobile app ad formats are available, each catering to different preferences:

1. Banner Ads: These ads, delivered by ad servers, appear in specific app locations. They can be personalized based on user data.
2. Video Ads: Display video ads within your app, including in-stream and out-stream options.
3. Native Ads: Designed to seamlessly integrate into your app's design, these ads resemble regular app content.
4. Interstitial Ads: Full-screen ads appear between app phases, like before the video loads.
5. Rewarded Ads: Users receive rewards (like an extra try in a game) for viewing these ads.
6. Gamified Ads: Interactive mini-game ads that engage users.

These ads can be embedded in different UI elements like tooltips, PiP videos, spotlights, and modals according to the app’s native design and theme. Ex: Spotify uses a modal to highlight the premium offering which is a type of in-app advertising.

In-app purchases

While users may not be required to initially buy your app, you can still create revenue by selling items within the app. This approach is a prevalent method of monetization, not only for brands with phsical products but also for various other contexts.

You can tap into the concept of in-app purchases by introducing fresh products, which could be connected to or carry your app's branding. Additionally, you have the option to sell virtual goods like in-app currency, additional lives, or unique in-game items, even if they are intangible.

For instance, in the mobile app game Candy Crush Saga, a modal is displayed to buy additional gold bars to purchase power-ups required for completing difficult level

Cashback offers for premium purchases

Offering a cashback deal for in-app premium purchases might sound too good to be true, but it's a fantastic opportunity. Essentially, it's like a discount that benefits the company in the long term.

With this offer, users get back a portion of what they spend on premium purchases, either as store credit or points in their app accounts. These rewards can only be used for future purchases within the same app. This strategy creates a win-win situation: users are enticed to keep coming back for more great purchases, leading to long-term engagement.

This approach has already been adopted by major players like Paytm, Freecharge, MobiKwik, Google Pay, and PhonePe.

Partnership model

Partnering with other companies helps your app make money through shared profits or fees. Your app promotes or supports the partner's products or services, and you earn a percentage of the revenue they generate from your users.

Travel apps like Expedia or Booking.com partner with hotels and airlines. When users book through their app, these travel apps receive a commission.

Affiliate marketing

Affiliate marketing involves recommending products from other companies. When your users buy these recommended products, you earn a commission (a share of the sale). This strategy works well if your app naturally aligns with related products or services.

Apps like Amazon Associates and shopping comparison apps earn money when users buy products they recommend.

Free trial to paid

This model lets users try your app's premium features for a limited time. After the trial ends, users must pay to continue using premium services. This strategy helps users experience the value of your app before making a purchase decision.

Headspace and Spotify are popular examples that use this model successfully.

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Subscription Based

With subscriptions, users pay a monthly or yearly fee to access ongoing premium features or content. This strategy creates steady income for your app and helps build long-term relationships with users.

Amazon Prime, Apple Music, and Disney+ use subscriptions. Users pay regularly for exclusive content, discounts, and special features.

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Paid app model

In the paid app model, users must pay upfront to download and use your app. This works best if your app solves a specific problem or offers unique value that free apps do not. This strategy provides immediate revenue but can limit the number of users willing to download your app.

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Professional photo-editing apps like Procreate and PDF editor and reader apps charge a one-time download fee because they offer unique features and high value.

White labeling

White labeling involves building your app technology and then licensing it to other companies under their brand name. You earn money through licensing fees, and the partner saves development time and costs by using your existing technology.

Fitness apps like Mindbody and business tools like Shopify offer their platforms to other businesses under different brands.

SMS marketing

Though regarded as somewhat old-fashioned in 2023, SMS marketing can still be a potent tool when infused with flair, intelligence, and a hint of wit. This approach enables you to effortlessly connect with users, extending discounts on in-app purchases or premium subscriptions.

Prioritizing explicit user consent for data usage is paramount. Deliberate over the message's length and timing - nobody wishes to digest a lengthy saga about your app during dinner hours.

Email lists

Utilizing email marketing campaigns can greatly enhance customer engagement and boost your ROI. With the infrequency of email address changes, maintaining a prominent presence in a customer's inbox can lead them to think of your business first when seeking relevant products or services. Consistent email communication ensures that your content reaches users and encourages their active participation. A strategic approach includes incorporating an email subscription form within your app to gather addresses effectively.

Shown below is how Uber nudges its users through email to come back to their app and book a ride whenever a need arises.

App monetization best practices - a checklist

✅ Understand your users deeply to match their preferences

✅ Keep ads balanced and non-intrusive

✅ Personalize monetization strategies for different user segments

✅ Clearly communicate the benefits of premium features

✅ Regularly test, analyze, and improve monetization features

✅ Ensure payments are quick, simple, and secure

✅ Offer prompt and helpful customer support

✅ Respect privacy and clearly explain data use

✅ Track key metrics to make informed decisions

✅ Stay updated on industry trends and adapt quickly

Plotline helps B2C growth and marketing teams improve in-app monetization

At Plotline, we help you build and publish in-app messaging flows with zero coding, saving your developers time that can be better spent on other aspects of the product.

Using Plotline, growth and marketing teams can improve their in-app revenue metrics by creating and deploying in-app messages that match your design theme to a targeted user cohort.

Join us in our journey towards providing users with native in-app experiences and improving mobile app monetization and revenue metrics.