How to Monetize an App and Make Your Application Profitable
Tags: monetize, mobile, development, application
Published: 2023-12-06 07:06:21

You have defined your buyer personal, all the functionalities of your app and you may even have already developed it and are ready to launch it on the market. However, before this step, you need to know how to monetize an app to ensure that your app is profitable.

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Choosing a business model for your app will be key to the success or failure of your application and will largely define your user acquisition strategy. For this reason, it must be defined in the early stages of the project with the guidance of a reputable **[mobile app development company](https://www.sparkouttech.com/mobile-application-development/)** to ensure that it is in line with the target audience. We tell you the main strategies to monetize your app and the keys to choosing the most appropriate one.

**Ways to Monetize an App: How to Choose?**
When we think about the different ways to monetize an app, we find two great business models: free downloads and paid downloads. Currently, most applications choose the first option. According to the latest app monetization data, 97% of Android apps and 94% of iOS apps are free. For this reason, it is usually recommended that most applications offer free downloads and combine this model with other monetization strategies.

**When you think about monetizing your app, you should keep the following in mind:**

Target audience: If you are targeting a young audience, they won't mind viewing ads in exchange for free features. But if your audience is varied, it is better to choose to combine monetization models that adapt to different targets.
Adjust to your type of app: not all monetization strategies work the same for all types of applications. In the case of mobile games, the favorite methods to make them profitable are purchases and in-app advertising.
Keep an eye on your competition: you must adapt to what already exists on the market. Do not charge for functions that other applications already offer for free, but for those that really differentiate you and are worth it.

**How to Monetize an App**
**1) Freemium Model**
As we have mentioned, it is the most used model currently. This strategy consists of offering a free download of the app. Once inside, some type of limitation is usually imposed on the user with the aim of unlocking them by paying or viewing advertising. Therefore, within the freemium model we can find:

**Limited Functions or Use**
It consists of offering the functionalities of the app, but in a limited way. If the user wants to enjoy the full experience, they must pay for it. An example of this model would be Dropbox. In principle, you can use their storage, which is very limited and if you want to expand it, you must buy one of their plans.

**Free Trial or Free Trial**
In the free trial, all the functionalities of the application are offered for a specific period of time. Amazon Prime Video is a clear example with its 30-day free trial. It allows access to the content to new users and after the trial period, they must subscribe to continue accessing. This strategy was used by other streaming apps such as Netflix and HBO a few years ago.

**Free Access with Advertising**
One of the most common strategies in the freemium model is paying to remove advertising. It is common in video or music applications, such as the famous Spotify. In the free account, we listen to music along with advertisements. With one of their payment plans, you can enjoy the service without advertising. In this case, it also combines the free trial model with paid plans. As you can see, there is no single way to monetize an application.

**2) Pay per Download Model**
With the pay-per-download model, the user directly accesses all the features of the app. This form of monetization represents a small percentage in the app markets due to the entry barrier it represents for attracting users, who have a wide range of free applications.

If you choose this model, we advise you to include good video previews in your app's file in which you can see how it works and highlight your app. These will have a double functionality: for the user, to validate if they are interested and for the app, to persuade the purchase.

**3) Paidmium**
Very similar to the download model. Paidmium combines payment per download and in-app purchases. Once the user has paid for the download, certain extra functionalities or improvements are offered. An example would be mobile games. Users can pay for their download and, once inside, buy additional lives, outfits to customize their characters... The Minecraft game has this paidmium model.

**4) Subscription**
The subscription monetization method requires the user to make a recurring payment, either monthly or annually, to have access to your app's features. The ideal is to offer the free download with limited use or free trial in the first instance, and then have users move to a subscription plan.

Netflix and Disney + use this strategy, which, as you can see, is hybrid, since the freemium model is combined with the subscription model.

**5) In-App Purchases**
In this model we find two types of applications: ecommerce ones (with the sale of products and services) and those that offer purchases for improvements in the application. The first correspond to large brands that already had an online store and use their application as an additional channel with which to improve communication and the experience of their users. For example, Zara or marketplaces like Amazon.

On the other hand, in-app purchases, as we have seen, are very common in mobile games, where improvements are usually offered or levels unlocked by purchasing within the application.

**6) In-App Advertising**
Investment in in-app advertising does not stop growing and, therefore, has become a very interesting monetization strategy for developers. It is about monetizing your application through the inclusion of advertising in it. In fact, 50% of gamers prefer free mobile games in exchange for advertising. It is also common to combine this model with in-app purchases, as the Trivia game does, showcasing the strategic expertise provided by a leading **[mobile application development company](https://www.sparkouttech.com/mobile-application-development/)**.

**7) Affiliate Marketing**
This way of monetizing an app consists of promoting third-party products or services in your application in exchange for receiving a commission for each download or sale.

There is a wide variety of mobile affiliate programs Apple App Store Affiliates, Mobvista or Yeahmobi.

**8) Sponsored Apps**
Sponsorships consist of obtaining financing in exchange for promotion. Normally, this is about offering free advertising within the app. You can have several sponsors in your app and offer different spaces within it. For example, appearing on the application's home screen (which would have a higher cost) or according to the categories of your app based on the thematic affinity with each of them.

**9) User Loyalty and Activation**
User loyalty and activation is a key factor when it comes to making your app profitable. This strategy consists of segmenting communication with your users based on the stage they are in and their needs, so that we guide them towards their interests and our business objectives.

This is achieved through fluid communication with users through push notifications, in-app messages or native ads. Fluid communication will convert your users into recurring users who trust the brand and, therefore, increase their purchasing frequency (and your income).

Choosing how to monetize your app can be complicated. But the basis of everything is to know your audience and your competition well. Each application is different and one strategy or another will work better for you. We recommend combining several monetization models to avoid depending on a single source of income and exploit the potential of your **[mobile app development services](https://www.sparkouttech.com/mobile-application-development/)**.