App Monetisation

When it comes to mobile app development, choosing the right monetisation strategy is a critical decision that can profoundly impact an app’s long-term success.

Mobile app monetisation goes beyond the mere act of charging users to download your app; it’s a strategic dance between satisfying your users’ needs and ensuring your company’s financial health. It’s not a one-size-fits-all scenario; your approach should be tailored to align with the nature of your app, and the expectations of your users.

Let’s explore some of the most popular monetisation models you can implement for your app to turn downloads into dollars.

Freemium Model: Balancing Free and Premium

The Freemium Model blends free and premium offerings within the same app. This offers users a free, basic version of the app, with the option to upgrade to a premium version with enhanced features or extra content at an additional cost. This approach allows users to experience the core features of the app without any initial financial commitment, enticing a broader audience to download and use the app. The goal is to convert a percentage of free users into paying customers who see value in the premium offerings.

A notable example of the Freemium Model in action is the music streaming app, Spotify. While Spotify provides free access to a vast music library with occasional advertisements, it offers a premium subscription that eliminates ads, allows offline listening, and provides additional features, enticing users to upgrade for an enhanced music experience. This model effectively balances user acquisition and revenue generation, making it a widely adopted strategy in the app industry.

This model caters to both casual users and those seeking an enhanced experience, providing flexibility and scalability.

In-App Purchases (IAP): The Art of Upselling

In-App Purchases (IAP) involve offering users the opportunity to buy additional features, virtual goods, or premium content within the app. This model leverages the freemium concept, where the app is free to download, but users can enhance their experience through purchases. This can include anything from unlocking premium levels, purchasing virtual items, or accessing exclusive content.

Think of the highly addictive puzzle game, Candy Crush Saga, which offers players a free-to-play experience with the option to purchase in-game items, power-ups, and extra lives. While the game is accessible to all users without any initial cost, players can choose to make in-app purchases to overcome challenging levels, acquire boosters, or extend their gameplay sessions.

This personalisation can make the app experience more enjoyable for users whilst allowing developers to continuously generate income over time.

Subscriptions: Creating Sustainable Revenue Streams

Subscriptions involve charging users on a recurring basis, typically monthly or annually, for access to premium features, content, or services. This model is common with media streaming apps or productivity tools.

Consider Headspace; a meditation and mindfulness app that offers users access to a variety of guided meditations, relaxation exercises, and mindfulness practices. While the app provides some content for free, the premium features, including a more extensive library of guided meditations and specialised programs, are available through a monthly subscription model. Users can subscribe to Headspace Plus to unlock the full range of meditation content and enjoy an ad-free experience.

The success of this model relies on offering users continuous value that justifies the ongoing cost of the app. 

App MonetisationIn-App Advertising: Turning Eyeballs into Revenue

In-App Advertising is a widely used model where developers display ads within the app, generating revenue based on user interactions. Ad formats can include banners, interstitials, or rewarded videos, with revenue often tied to impressions, clicks, or completed views.

A good example of an app employing the In-App Advertising model is the free version of the popular puzzle game, Words with Friends. Players encounter ads between turns, allowing the developer to generate income while providing users with a cost-free gaming experience.

This model facilitates a wider user base by eliminating upfront costs and relies on the ongoing delivery of targeted advertisements to sustain app profitability. Developers can also earn revenue from advertisers each time users engage with the ads. On the flip side, intrusive or irrelevant ads can deter users, so balancing user experience is crucial in this model. This strategy also relies on having a large user base to generate significant revenue.

Pay-Per-Download: Unlocking Revenue from the Get-Go

Pay-Per-Download is a straightforward model where users pay a one-time fee to download the app. This model is common for premium apps that offer a unique or specialised experience.

Think of a professional photography app with advanced editing tools. Users pay upfront to download the app, granting them access to the app’s full suite of features. This model ensures that developers receive compensation upfront for their app, providing a clear and immediate revenue stream.

Nowadays, this strategy is less common as users have a tendency to want to ‘try before they buy’. Pay-per-download works best when you can clearly articulate the value of your app upfront, and/or you’re a well known brand.

Choosing the Right Monetisation Strategy

With a myriad of monetisation strategies available, the key lies in understanding your app’s unique value proposition, target audience, and the nature of your content or services. For content-heavy apps like news or entertainment, ad-supported models or subscriptions might be suitable. For apps offering specialised tools or features, in-app purchases or one-time payments could be more effective.

Considerations for Choosing the Right Strategy:

  • Know Your Audience: Understand your users’ preferences and willingness to pay. Some audiences may appreciate the simplicity of one-time payments, while others might prefer subscription-based access.

  • Understand Your App Type: Different types of apps lend themselves better to specific monetisation models. Gaming apps often excel with in-app purchases, while utility apps might find success with subscriptions.

  • Value Proposition: Align your chosen strategy with the value your app provides. Users are more likely to pay if they perceive substantial value in what you offer.

  • Competitive Landscape: Analyse what monetisation models your competitors are using and consider how you can differentiate your approach.

  • User Experience: Prioritise a seamless and positive user experience. Intrusive ads or overly aggressive monetisation can drive users away.

Once you have a clear understanding of these key factors, you can choose a strategy that not only generates revenue but also enhances the overall user experience.

Final Thoughts

As you embark on your monetisation journey, remember that flexibility and adaptation are key. Regularly assess user feedback and industry trends to refine your strategy and ensure continued success in the competitive app market. Happy monetising!

DreamWalk is an award-winning Australian app development company. We pride ourselves on our ethical and transparent app development process and operate by our unique Ethical App Development Charter. To learn more about us and the work we do, head to


About the Author

Karl Graf is an award-winning app designer and Managing Director of DreamWalk. Karl has helped hundreds of businesses and startups plan, design, develop and launch successful apps.

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