Maximizing Revenue: How to Monetize Mobile App in 2024

Mobile applications serve as a significant platform for businesses to reach their target audience and offer valuable services. However, the ultimate goal for most developers is to generate revenue from their applications. With the evolution of monetization models, app developers now face the challenge of choosing the most suitable method to monetize mobile app and maximize profits in the competitive digital market space.This article presents an extensive guide to mobile app monetization, exploring various strategies, their advantages and disadvantages, best practices, and answering frequently asked questions to help you make an informed decision.

Understanding Mobile App Monetization

Mobile app monetization refers to the process of converting your app into a revenue-generating platform. With the surge in the number of free applications, app users have developed a resistance towards paid applications. This resistance has necessitated the need for app developers to implement inventive strategies to monetize their apps and generate revenue.

The Significance of Mobile App Monetization

Over the past decade, the mobile app market has experienced a radical transformation. The prevalence of free apps has made mobile app monetization an essential factor for app developers worldwide. The journey from having 77% paid apps in the iOS App Store in 2009 to only 10% requiring payment at download currently, app developers have been forced to rethink their revenue generation tactics.

To ensure consistent revenue growth while maintaining an excellent user experience, app developers can adopt one or more app monetization models.

Exploring the Top 12 Mobile App Monetization Strategies in 2024

1. Boost Revenue with In-App Advertising

With the exponential growth in mobile sales since 2008, digital advertising has become a go-to monetization method for app developers. This monetization model has evolved to include various options tailored for the mobile environment, such as interstitial ads, video ads, native ads, and text ads.

Pros of In-App Advertising

1. Drives Significant Results

In-app ads have proven to be more effective than traditional banner ads, resulting in better performance and higher conversion rates.

2. Targets Specific Audience

With in-app advertisements, developers can display relevant ads to a specific audience, making the marketing more efficient.

Cons of In-App Advertising

1. Low Engagement Levels

Despite the captive audience, banner ads often experience low click-through rates (CTR), implying limited user engagement.

2. Risk of Competitors’ Promotions

There’s a chance that your competitors might end up appearing in the in-app ad, which may lead to users installing their apps instead.

2. Grow eCPM with Interstitial Ads

Interstitial ads, which cover the entire mobile screen and appear at natural transition points within the user flow, have emerged as an effective alternative to standard in-app ads. This mobile app monetization strategy works best when ads are implemented at the end of a flow.

Pros of Interstitial Ads

1. Enhanced User Engagement

Interstitial app ads offer high viewability that banner ads cannot match. Their full-screen coverage is effective and nearly impossible to ignore, resulting in increased user engagement.

2. High CTR and CPM Rates

Due to their full coverage, interstitial ads are hard to miss, increasing the chances of user engagement. This is why advertisers are willing to pay more for these ads, leading to higher CTR, more conversions, and consequently, more revenue for the publishers.

Cons of Interstitial Ads

1. Penalties for Improper Implementation

Publishers must carefully implement interstitial ads, abiding by Google’s guidelines and recommendations; otherwise, they risk facing a Google penalty or negative ranking.

2. Delayed Loading Time

Interstitial ads might cause the webpage to load slowly, which can lead to user irritation.

3. Improve CTR with Native Ads

Native ads, designed to integrate seamlessly into their host app, have become increasingly successful in the monetize mobile app in 2024 When implemented correctly, these ads create minimal disruption to the user experience and demonstrate one of the highest engagement rates.

Pros of Native Ads

1. Drives Better Campaign Performance

Native ads perform better than many other ad formats, helping advertisers drive conversions and revenue.

2. Builds Trust Among Users

Native ads help brands build trust among their audiences, allowing them to share valuable content without intrusive pop-ups or messages.

Cons of Native Ads

1. Complex Performance Measurement

Since native ads have a unique format, there is debate within the industry about which metrics should be used to measure their success. Therefore, publishers need to ensure they have the right tools and are examining relevant data.

2. Intricate Customer Targeting

As native ads help brands reach their most suitable audiences, publishers may need to rethink their strategy for customer targeting.

4. Drive Conversions with Freemium Subscriptions

Freemium is a monetize mobile app model that offers several advantages. After users download a free app, they are offered in-app purchases for exclusive access to premium features, additional content, or digital goods.

Pros of Freemium Subscriptions

1. Scalability

Freemium allows a new venture to scale up and attract a user base without the costly overheads of traditional marketing campaigns.

2. Try Before You 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.

Cons of Freemium Subscriptions

1. Limited Upsell Interest

There is a potential for decreased revenue if users do not upgrade to the paid app.

2. Affects User Experience

Users may 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 confuse users, which can lead to them unsubscribing or not using the app.

5. Deliver Stable Revenue with Premium Subscriptions

Premium mobile apps run via subscription models, requiring users to sign up for a fixed fee immediately upon download. This ties revenue directly to the number of downloads and has been shown to result in higher user engagement and customer acquisition.

Pros of Premium Subscriptions

1. Reliable Income Stream

App subscriptions offer a reliable and predictable revenue stream for app developers.

2. Increase Development Opportunities

Premium subscriptions can help fund the development and ongoing maintenance of an app.

3. Ensures Longevity

Premium subscriptions can help ensure that an app remains accessible and useful for its users over time.

Cons of Premium Subscriptions

1. Inflexibility

Premium subscriptions can be inflexible, meaning users may not be able to take advantage of special offers or discounts.

2. Expensiveness

Premium subscriptions can be expensive for users, especially if they don’t use the app often, leading to a decline in user numbers.

3. Can Alienate Users

Users may struggle to identify value prior to using the app consistently, which can create a sense of unease.

6. Create Repeat Customers with In-App Purchases

In-app purchases, particularly popular in the gaming arena, allow users to use real money to purchase features or items while playing a mobile game. This can range from free lives to extra coins to unlocking hidden levels.

Pros 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.

Cons 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.

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. Flexibility with Affiliate Marketing

Affiliate marketing involves promoting other mobile apps within your app. While the commissions offered in this monetize mobile app 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.

Pros of Affiliate Marketing

1. Cheap for the User

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.

Cons of Affiliate Marketing

1. High Competition

Affiliate marketing can be quite competitive, as companies vie for affiliates who can promote their app effectively.

2. Risk of 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. Improve Customer Retention with SMS Marketing

Though considered old school, SMS marketing, when written well, can be an effective way to reach out to your users and offer them discounts on in-app purchases or premium subscriptions.

Pros 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

Reaching out to users who haven’t recently engaged with an app via SMS can return a high click-through rate (CTR).

Cons of SMS Marketing

1. 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. Increase Engagement with Email Marketing

Email marketing can be an effective way to engage existing downloaders and turn them into paying users. With social media channels flooded with users, 75% of millennials now use email to communicate with businesses.

Pros of Email Marketing

1. Speeds Up the Buying Process

Email marketing is up to 40 times more effective than social media marketing, with the buying process being three times faster than via social channels.

2. Easily implemented

Email marketing is relatively easy and cheap to implement.

Cons of Email Marketing

1. May Devalue the Brand

Email marketing can be considered spammy if implemented incorrectly.

2. Less Effective Than Other Strategies

Email marketing can be less effective than other forms of app monetization, such as in-app purchases or advertising.

10. Leverage Large Audiences with Sponsorship Ads

If your mobile app has a large user base with high user engagement, a sponsorship arrangement may be ideal. This involves finding a single company to become your app’s investor/sponsor, giving them exclusive access to advertising to your user base.

Pros of Sponsorship Ads

1. Audience Targeting

Sponsorship ads can be targeted to a specific audience, which can result in higher conversion rates.

2. Brand Loyalty

Sponsorship ads can create a sense of brand loyalty among users.

3. Cross-Promotion Opportunities

Sponsorship ads can be used to cross-promote other products or services, which can result in increased user acquisition and revenue.

Cons of Sponsorship Ads

1. Difficult to Find Sponsors

Developers need to find a sponsor willing to partner up on this strategy and has a similar user base; otherwise, this strategy can fall flat.

2. Can Be Intrusive to User Experience

As with all in-app ad campaigns, choosing appropriate ad formats and implementing them via best practice is essential to ensure they don’t negatively impact the user experience.

11. Use Licensing for More Predictable Revenue Streams

If your application collects user-generated data, you may want to consider licensing this data as a monetization model. Licensing can be a great route of monetize mobile app, as it allows the users to access the app for free, while the app is paid for by the licensing.

Pros of Licensing

1. Consistency

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.

Cons 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.

12. Raise Capital and Build Communities with Crowdfunding

Crowdfunding can be an effective way to inject funds into a venture, particularly in the early stages of a free app’s development.

Pros 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.

Cons of Crowdfunding

1. It’s a Competitive Marketplace

With a bunch 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.

Three Best Practices for Mobile App Monetization

1. Invest in User Acquisition

To continue monetize mobile app developers should be constantly investing in user acquisition. As there will always be user churn, 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, with 1 in 4 developers stating that hybrid monetization is the best way to maximize ROI.

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 a monetize mobile app 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.

How to Choose the Best Monetization Model for Your App

Choosing the best app monetization strategy for your app depends on several factors, including the app’s function and purpose, the competition, and the target audience. Often, app developers will decide to employ several of the above approaches to generate app revenue.

However, with advertisers pouring more than $600 billion into digital advertising in 2022, in-app advertising is undoubtedly still one of the most effective, and profitable app monetization models.

Final Words

There are many different factors to consider when monetize mobile app. Key considerations include understanding what makes your app unique, whether you would be willing to pay for your app, and what your current business priority is – increasing app downloads or gaining revenue.

At Publift, our ad technology is smart, strategic, yet simple to implement for maximum return on your advertising investment. We monetize apps via a range of ad formats explicitly optimized for our clients’ needs. 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.