5 Profitable Monetization Models to Generate Income in Your App

· 8 min read
5 Profitable Monetization Models to Generate Income in Your App

Only you know the true value of your application. It's a project in which you invest time, money, and expectations. But in terms of sustainability, personal satisfaction is not enough; you also need to make a profit. If your revenue is in the red, it's time to review these 5 app monetization models to increase your earnings.

When you explore these possibilities, you'll begin to see your app as a true goldmine. You'll continue optimizing your development while strengthening your business scheme.

App Monetization Models: What They Are and Why You Should Know Them

When you design a plan to monetize your mobile application, you're implementing a scheme to generate income through specific actions within your development. Publishing an ad or offering a paid service are examples of this mechanism.

These revenue generation methods respond to the evolution of mobile applications themselves. As the use of these software became widespread, it became common to offer them as free downloads. In exchange, it was necessary to find ways to generate profits to sustain them.

For that reason, various forms of generating income emerged progressively. From subscriptions to in-app purchases, these are some of the strategies employed to make money. As you can imagine, to achieve this, you need the support of other figures in the mobile app ecosystem.

Monetization is Possible with the Help of Users

In order to monetize, it is essential to understand the role played by the users of your application. Without them, it is practically impossible to generate any profit. That's why any revenue-generating scheme must encourage user interaction and ensure the best possible experience.

A truly effective app monetization model guarantees optimal user retention rates and a suitable Customer Lifetime Value (LTV). It's simple: if your app users stick with you while you monetize, you're on the right track.

Advertisers also Help You Generate Profits

Although there are different ways to monetize, one of the most common methods is to use your development as advertising space. The shift from traditional media to digital platforms has had a key impact on promoting products and services. Today, it is unthinkable to accomplish that task without leveraging mobile apps.

For that reason, millions of advertisers include these environments in their advertising campaigns. Developers like you can generate interest in them: in 2021 alone, there were 230 billion app downloads reported. And the behavior of 2022 and 2023 indicates that this number is increasing. Today, advertising without including apps is unthinkable.

What Do You Need to Monetize Your Application?

Just as affection for your app is not enough, making money from it is not a matter of goodwill either. Understanding your advantages, your needs, and the characteristics of your audience are fundamental requirements to take advantage of any of the app monetization models.

To succeed in this task, you must view your application not only as a development but also as the foundation for a business model adapted to the realities of digital marketing. Evaluate your potential and organize yourself to make money.

#1 Clearly Identify the Main Value of Your Application

In simple terms, what is the main benefit someone obtains when using your app regularly? What sets it apart from other similar applications? What is the user traffic like? Do you offer exclusive content or features? Is there any characteristic for which your audience is willing to pay?

By answering these questions, you can determine which monetization model is most suitable for you without neglecting the nature of your app.

#2 Understand the Behavior of Apps Similar to Yours

Study the monetization models most commonly used, their advantages and disadvantages, the number of users they have, and their reputation in app stores. This data will allow you to understand the most common practices for generating profits.

At the same time, you can compare your application to its competitors. You will have a clear understanding of how you can position yourself to gain users, enjoy a good reputation, and monetize efficiently.

#3 Segment Your Audience

How can you choose a monetization model without knowing your users? That would be a recipe for immediate failure. For that reason, it is crucial to characterize your audience based on their demographic conditions, digital platform usage habits, expectations, and lifestyles.

With that thorough analysis, you can discover the real possibilities of making money through exclusive services, advertising, or in-app purchases. At the same time, you will choose monetization models for apps that guarantee the best user experience (UX).

#4 Continuously Optimize Your Application

If you want to generate income with your development, you must ensure its proper functioning. This is a sure way to retain users and have a platform suitable for any monetization model you choose.

For example, suppose you decide to display ads. Can you imagine if serving a creative slows down your application? It's something you cannot allow for even a second. So, keep your platform at its best.

In addition to technical operability, constantly evaluate the usability conditions. Your app should be intuitive, have an attractive interface that aligns with current trends, but above all, it must be useful.

#5 Design a Monetization Plan Tailored to Your Characteristics

You know your strengths, how your competition operates, and what app users expect from you. Now, let's move on to the next step: designing a monetization plan that suits your characteristics, is feasible, and sustainable over time.

To do this, set deadlines to make it a reality, define the expected results, and assess the relevance of combining various revenue streams without affecting the UX.

These are the 5 most profitable monetization models for apps

If you already know the potential of your development, it's time to evaluate which scheme is most convenient for you. Explore the advantages of these 5 profitable monetization models, choose one, and get ready to see your earnings increase.

#1 Freemium Model: A Bridge to Profits

If you're a Spotify user, you've probably explored its features for free for a month. After that period, you had to choose between using it for free or paying a monthly subscription to enjoy extra features and avoid advertising interruptions. This monetization model is known as freemium.

The logic is simple: cast the bait with free services to generate interest among your users. If they find it useful and the price of your plans is reasonable, many will opt for subscribing to plans that offer additional functions.

How can you apply freemium monetization models to apps?

You have three alternatives: offer a trial version and then offer plans to continue enjoying your application, limit the functions of the free format, or incorporate advertising into the free version of your application. In all three cases, if the user wants to use your development without restrictions, they will subscribe to one of your plans.

Which applications can employ this model?

Those that are frequently used, have a high number of users, and offer valuable content. You need to provide something extra in your application: no one pays for functions or resources that don't make a difference or guarantee greater satisfaction.

If you want to reach new customers and increase the visibility of your application through extra features, this model is beneficial for you.

#2 In-App Purchases: Sell Your Added Value

In the world of video games, there are numerous examples of this monetization model for mobile applications. When users pay for lives, coins, or special functions, they are responding appropriately to this format.

What sets in-app purchases apart from the freemium model? Essentially, users have the same access to the general functions of your application. Eventually, based on their requirements, they pay for specific services or products, often consumable or available for a limited period.

Can all applications use this app monetization model?

It depends on the additional resources you can offer. If you have additional content, goods, or services that can pique the interest of your users in specific situations, you can apply this scheme.

In this regard, you need to distinguish between consumable resources, which can be used only once, and non-consumable resources, which do not have an expiration date.

#3 Paid Downloads: Clear Value from the Start

If your application meets high standards of security and functionality, this monetization model is ideal for you. Those who want to install it on their phones will have to pay to download it from app stores.

At first glance, it may seem like an unprofitable model, especially considering how the mobile app ecosystem works. Most apps are downloaded for free. However, if you offer a unique and truly valuable development with guaranteed long-term benefits, you can employ this model.

Why is it one of the most demanding app monetization models?

If you want to generate dividends with this scheme, your application must be considered premium from the beginning. It should have advantages and functionalities that have no competition in the market.

Additionally, you need to accompany this model with a promotion plan for your application that highlights its advantages and builds trust among potential users. Since there are no trial periods or free access, you must exhaust other avenues to showcase your advantages.

#4 Harness the Possibilities of M-Commerce

Making purchases through mobile applications is a common practice today, strengthened by the COVID-19 pandemic. If you have a company that offers goods and services, you can turn your application into a space for acquiring them. This model is known as M-commerce.

It is one of the most effective ways to monetize your application and add value to it. For example, you can charge special commissions for transactions, offer exclusive discounts, and provide promotions only through the platform.

Your brand will gain greater significance.

The expansion of major brands into the digital world is not without reason. Today, if you don't have a digital presence, you're practically irrelevant. For that reason, major retail chains, transportation services, banks, food companies, among others, have applications to stay in touch with their users.

By doing so, they not only enhance the services they traditionally offer but also take advantage of the benefits of the mobile app world to have a greater presence among their consumers and generate revenue through that channel.

#5 Place Advertisements in Your Application

This is one of the most in-demand app monetization models. Major brands, mobile app developers, and organizations of various types promote their services through programmatic advertising. As you can imagine, your app can become an advertising space.

To enter the programmatic advertising ecosystem, you must become a publisher. Design and offer an inventory of ads that you can offer through ad networks or online advertising platforms. There, you can connect with advertisers, who are interested in publishing ads and make offers from the demand side platforms.

How do you sell your ad inventory?

Ad Exchanges can offer your inventory to large groups of advertisers through horizontal ad networks. If you want to reach more renowned advertisers, the offer will be made through premium networks.

When you have a high reputation as a publisher, you can offer your inventory without needing to compete with other publishers. How can you do that? Through open auctions, private ad exchanges, and preferred deals.

Can I combine multiple monetization schemes in my application?

Definitely, yes. It's much more common than you think. YouTube Music Premium and Spotify do it: they combine the freemium model with ad placement. How do they apply each model? They display ads in their free services, while the freemium system applies to subscriptions.

As you can see, you can generate income through various avenues. But before choosing, carefully evaluate the conditions of your application and the characteristics of your user community.

Ready to choose among the most profitable app monetization models? At Wortise, we're ready to help you refine your strategies.

Hello, publisher! Your application can provide you with the highest profit margins if you outline an effective monetization plan. Do you know your audience? Do you know which model is most suitable for you? If you don't have answers, our team will help you devise the most suitable plans.

At Wortise, we help you increase your earnings as a publisher with our advanced ad network platform featuring over 100 Ad Networks.

We provide personalized support, the highest eCPM in the market, and guidance on tactics to maximize your earnings.