What Are the Different Ways to Make Money From Your Mobile App?

So you've developed a stellar mobile app. Congrats! But now comes the big question: How do you make money from all your hard work?

Turns out, there are quite a few options for generating revenue from a mobile app.

I’ll break down the most popular monetization models so you can pick the best money-making strategy for your app and business.

Advertising

One of the simplest ways to make money from your app is by showing ads. You’ve surely seen ads in free apps before—those little banners or full-screen ads that pop up between content.

There are a few dominant mobile ad networks you can join to put advertising in your app, including Google AdMob, Facebook Audience Network, and Apple Search Ads. You earn money every time someone clicks or views an ad shown in your app.

Pros:

• Requires minimal implementation

• Little work after setup

• Popular ad networks have a wide reach

Cons:

• Ad revenue unreliable

• Users may find ads annoying

• Typically lower revenue per user

In-App Purchases

Rather than showing ads, you can make money by selling premium content or features directly to your app users. For example, a free app may offer expanded capabilities or an ad-free experience with an in-app purchase.

Some options for in-app purchases include:

• Premium app functionality

• Virtual goods or coins

• Subscription access to gated content

• Unlocking additional app levels or features

Pros:

• Users pay for exactly what they want

• Potential for higher revenue per user

• Feels less intrusive than ads

Cons:

• Need compelling content to sell

• Complex pricing decisions

• Higher development effort

Paid Apps

Rather than offering a free app, you can simply make your mobile app a paid download for $0.99 - $9.99 per user. This monetizes your development work directly rather than relying on in-app advertisements or purchases.

Pros:

• Simple, understandable business model

• Revenue per download is predictable

• No ads required

Cons:

• Need very compelling app content

• Lose out on wider free app distribution

• Hard to stand out among the competition

Sponsorships

For apps with an engaged user base, sponsorships offer a way to monetize that audience. Brands will pay sponsorship fees to partner with apps relevant to their customers.

For example, a travel app could partner with hotels or airlines. Or a parenting app could receive sponsorship from baby food brands.

Pros:

• Lucrative deals possible

• Chance to carefully select sponsors

• Deepens user engagement

Cons:

• Need a large established audience

• Sponsor fulfillment of extra work

• Brand values must align

Freemium Upsell

A popular model is offering a "freemium" app with limited capabilities, paired with paid “pro" upgrades to enable premium functionality. For example, cloud storage or financial apps often use this tactic.

The free version draws users in, while persuasive upsells convert a percentage to paying customers. Different levels of paid access can further increase conversion.

Pros:

• Draws a wider free user base

• A natural path to paid conversion

• Flexible pricing strategy

Cons:

• Expect most to use the free version

• Risk devaluing advanced features

• Complex development requirements

As you can see, today’s app developers have an abundance of options when it comes to profiting from their hard work.

Consider your audience, capabilities, effort tolerance, and revenue goals when deciding on the best monetization path for your mobile app business.