Why App Monetization Strategy is important and how you should select one for your app

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With millions of apps available on Google Play Store, Apple’s App Store and various other platforms, money earning from App development is not at all easy as the users have a great deal of choice. Most importantly these applications don’t bring in the desired revenue as reveals State of The Developer Nation Q3 2015 by Vision Mobiles. 51% mobile applications generate less than $500 in a month and are considered below the app poverty line. 19% of the applications fail to earn any money while only a meager 4% earn more than $500 a month.
To earn money from mobile application development there should be a proper strategy to assure the same. This is similar to the money earning strategy of any other business. Read on to learn about the various app monetization strategies and single out the one which would be suitable for your application.


Advertising Based

In this type of approach, money is expected to come from advertising and the users are allowed free download of the app. But, sometimes this strategy is mixed with other options.


It is a wonderful option when:

  • You don’t want to earn directly from the users, or in-app-purchases can spoil the user experience of your app and the feature is not suitable to be included within the app.
  • If the application requires the users to open the app several times and they are required to spend some time in its environment, thus offering the advertiser greater ‘Opportunity to See’.
  • Your application collects behavioral or demographic data.


Pay Per Download

The monetization strategy is quite simple here. The users have to pay only once when they download the app and therefore, the money earned is directly related to the number of downloads. But even then this strategy may not be profitable. It is really difficult to convince the users to go for a paid app before allowing a trial in a scenario when a large number of similar applications are available for free.
To get maximum downloads the app searches have to be put through excellent feedbacks, listing among the top applications, and a promotional plan that can highlight the positive aspects of the app over the other free available similar apps. But, it does not provide greater lifetime value than is provided by other monetization strategies.


You can go for this option when:

  • You have excellent marketing team available or you have a great PR presence.
  • The application is actually way better than the free options available. For example it is loaded with more features and better UX.
  • The price justifies the value and the users would like to pay for it.
  • You want to ensure the amount of money earned should be directly related to the number of downloads.


Why App Monetization Strategy is important and how you should select one for your app


In-App Purchases

In-app purchases is used by majority of the apps available in the market to make money. This app enables users to make purchases as they use the application. It is the strategy which is used in games where users buy extra lives, weapons, etc. to play the game. In retail apps, the uses may buy products or services. So, in-app purchases can be both mortuary as well as physical.

It is a good strategy to adopt when:

  • Your app is a gaming app what are shopping or retail app.
  • It is possible to make profits despite the shear taken by Google or Apple.
  • The users actually benefit by making the in-app purchases.
  • Great user experience is rendered encouraging them to use the app again and again even though no purchases are made.



This strategy involves free download of the application which further requires the users to purchase premium features to access the application fully. The model would work correctly on the ability of the app developer to attract we users who will be who are interested enough to buy premium features to get better experience.

The positive aspect about this strategy is it allows the users to experience the application before they are required to pay for additional features. This is a better option than the Pay per Download strategy where users are made to pay before knowing how the app would be actually like. However, it would be difficult to decide upon a providing through many or too little free features.

It is advantageous to use when:

  • The developer aims to earn revenues both from advertising as well as uses.
  • The premium features are capable of creating additional value.
  • The free download of the app can lure the users to go for the paid features.
  • The app sessions are pretty long and the user base is fairly big.



This is somewhat similar to a freemium, where the users are allowed free access but they must spend money to enjoy the other features to get better experience. The users actually get free access to the content but not to the features. One can access only a limited number of features and as they spend more time using the app they are prompted to pay for additional features.

The developers can expect a steady flow of revenue from this type of strategy but the dilemma remains the same as in the freemium model- how much should be given for free, to tempt users to want more and eventually convince them to spend on the subscription. It is usually implemented by entertainment and news apps.

One can go for this:

  • The application has new content all the time such as news, video, music etc.
  • Users are driven to use the application repeatedly because of its nature.
  • How to settle for the best monetization and strategy for your app.


To select the right monetization strategy one has to consider several factors, but it is important to decide upon it before the launch of the application. Unarguably, in-app-purchases is most successful with retail or shopping apps which deal in physical goods. The app monetization the strategy that you should adopt will heavily depend on the objectives of your business.


Focus on the app

You need to look at the very purpose of your app. Its purpose or service, the type of problem it can solve and how it does that.

Different types of strategies work well for different types of applications. For example subscription strategy is useful and if the application offers news, music and video streaming. In-app-purchases works best for gaming applications wedding users are an out to download the game for free but then they must buy additional products to enjoy the game more. This strategy is also implemented for shopping or retail application wherein users buy products and services.


Consider the rivals

That is important to conduct a thorough research on the competitors. You have to research on the applications that are similar to yours or are in the same vertical. This will help you in product development as well as selecting the right monetization plan. You have to also see the revenue generation strategy adopted by arrivals and how well it is working for them. Try to find out any loopholes and see if you can use it for your benefit.


Study your target market

You have to understand the mind of your target users and focus on their needs. As a common practice you will have to clearly demonstrate the value your application is likely to provide them for the money they spend. For pay per download, the convincing has to be done to influence the searchers to pay for the download. In case of free download the experience of the application should be good enough to tempt the user to pay for premium features.

You have to determine your revenue generation plan well before the launch of the application. This is important because you should have the rights the right strategy at place to earn profits as you would not want to invest in something which has no promise to bring you returns.

Ready to Take the Next Step?


Gagandeep Sethi

Project Manager

With an ability to learn and apply, passion for coding and development, Gagandeep Sethi has made his way from a trainee to Tech Lead at Promatics. He stands at the forefront of the fatest moving technology industry trend: hybrid mobility solutions. He has good understanding of analyzing technical needs of clients and proposing the best solutions. Having demonstrated experience in building hybroid apps using Phonegap and Ionic, his work is well appreciated by his clients. Gagandeep holds master’s degree in Computer Application. When he is not at work, he loves to listen to music and hang out with friends.

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