App monetisation

The oldest and most upfront app monetisation model is charging a price for downloading the app. But are there other, and maybe easier, ways to monetise your app? Of course there are. Today, most apps are free to download and earn money through in-app purchases, subscriptions or advertising. This guide explains each model, its pros and cons and how to choose.

Monetise your Project

At a glance

Method	Suits	Pros	Cons
Paid apps	Apps with a clear, well-known value, such as professional tools or popular games with a strong brand.	Simple; every user pays; no ads needed.	The price stops many people from trying the app; revenue comes only once per user.
In-app purchases	Games and apps where users regularly want more.	A free download reaches more users; heavy users can spend more than any fixed price.	Usually only a small share of users ever pay; aggressive selling annoys users and can attract criticism from regulators.
Subscriptions	Apps used regularly that deliver ongoing value, such as content, productivity, fitness or cloud services.	Predictable, recurring revenue.	Users expect regular updates and new content; cancellations (churn) need constant attention.
Freemium	Tools where the free version is useful on its own and the paid version clearly adds more.	Users try before they buy.	Finding the right line between free and paid is hard: too generous and nobody upgrades, too limited and nobody stays.
In-app advertising	Free apps with many users or long sessions.	Earns from every user, not only the few who pay.	Revenue per user is low; badly placed ads hurt ratings and retention.
Sponsorship and partnerships	Apps with a well-defined audience.	Good revenue per deal; can feel less intrusive than ads.	Deals are irregular and need negotiation.

What is app monetisation?

App monetisation covers every way of earning revenue from a mobile or desktop app. The right model depends on how people use your app: how often, for how long and how much value they get from it.

One thing applies to most models: if you distribute your app through the major app stores, the store usually takes a commission on paid downloads and on digital goods and subscriptions sold inside the app. The rate depends on the store, your revenue, the type of purchase and the region, and the rules have been changing in recent years. Check the current terms of each store before you set your prices.

App monetisation models

Paid apps

Users pay once before they can download the app.

Suits: Apps with a clear, well-known value, such as professional tools or popular games with a strong brand.
Pros: Simple; every user pays; no ads needed.
Cons: The price stops many people from trying the app; revenue comes only once per user.

In-app purchases

The app is free, and users buy items or features inside it. There are two kinds:

Consumables – used up and bought again, such as in-game currency or extra lives.
Non-consumables – bought once and kept, such as removing ads or unlocking a feature.

Virtual goods are one of the most popular ways of monetising games.

Suits: Games and apps where users regularly want more.
Pros: A free download reaches more users; heavy users can spend more than any fixed price.
Cons: Usually only a small share of users ever pay; aggressive selling annoys users and can attract criticism from regulators.

Subscriptions

Users pay a recurring fee, weekly, monthly or yearly, for continued access to content or features.

Suits: Apps used regularly that deliver ongoing value, such as content, productivity, fitness or cloud services.
Pros: Predictable, recurring revenue.
Cons: Users expect regular updates and new content; cancellations (churn) need constant attention.

Freemium

The basic version is free; advanced features require a one-off upgrade or a subscription. Freemium is less a separate model than a way of combining a free tier with in-app purchases or subscriptions.

Suits: Tools where the free version is useful on its own and the paid version clearly adds more.
Pros: Users try before they buy.
Cons: Finding the right line between free and paid is hard: too generous and nobody upgrades, too limited and nobody stays.

In-app advertising

The app shows ads from an advertising network, and you earn per impression, click or completed view. Common formats:

Banners – small ads at the top or bottom of the screen.
Interstitials – full-screen ads at natural breaks, such as between levels.
Rewarded ads – users choose to watch an ad in exchange for a reward, such as an extra life.
Native ads – ads that match the look of the app’s own content.

If you need an easier way to monetise your app, consider in-app advertising: it works with free apps and does not require users to pay anything.

Suits: Free apps with many users or long sessions.
Pros: Earns from every user, not only the few who pay.
Cons: Revenue per user is low; badly placed ads hurt ratings and retention.

Hybrid models

Many apps combine ads for free users with a paid option to remove them, or offer both in-app purchases and a subscription. A hybrid model lets every user group contribute in the way that suits them.

Sponsorship and partnerships

A brand pays to be featured in the app, for example through branded content, a themed event in a game or a partnership with a related service.

Suits: Apps with a well-defined audience.
Pros: Good revenue per deal; can feel less intrusive than ads.
Cons: Deals are irregular and need negotiation.

Choosing a model

How often is the app used? Daily use suits subscriptions and ads; occasional use suits a one-off price.
Who are your users? Professionals pay for tools that save time; casual users prefer free apps with optional purchases.
What do competitors do? If similar apps are free, a paid app will struggle unless it is clearly better.
What does the user experience allow? A meditation app full of interstitials will not keep its users.

Common mistakes

Monetising before users see value. Asking for money or showing ads on the first screen drives people away.
Too many ads at the wrong time. Interrupting users in the middle of a task leads to bad ratings.
Ignoring store commissions and taxes. Base your prices on what you actually receive.
No data. Track which users pay, which ads they see and when they leave the app.
Collecting more personal data than needed. Privacy laws and app store rules restrict tracking; users increasingly decline it.

Frequently asked questions

Which app monetisation model earns the most?: There is no general answer. Many successful apps combine models, such as ads for free users and a subscription for regular users. Test what works for your audience.
Should my app be free or paid?: Free apps reach more users and can earn through ads and purchases. A paid app can work if its value is clear before download and few free alternatives exist.
What are rewarded ads?: Ads that users choose to watch in exchange for something in the app, such as extra lives or currency. Because the user decides, they are usually better accepted than ads that interrupt.
Do app stores take a share of my revenue?: For paid downloads, in-app purchases and subscriptions, usually yes. The rate and the rules differ between stores and regions, so check the current terms. Revenue from in-app advertising is paid by the ad network, not the store.

Monetise your Project