Unveiling the secrets to successful monetisation of mobile apps, this article brings together expert advice and real-life examples. Discover how in-app purchases, subscriptions, and advertising can transform app revenue generation. Delve into strategies for creating multiple streams of income and learn about the efficacy of the freemium pricing model.
- Implementing In-App Purchases
- Using Subscriptions for Monetisation
- In-App Advertising for Revenue
- Multiple Revenue Streams for Sustainability
- Freemium Pricing Model
Implementing In-App Purchases
When it comes to monetising mobile apps, one of the most effective steps we’ve taken is implementing in-app purchases (IAPs). This strategy allows users to buy additional features, content, or perks directly within the app, creating a seamless revenue stream without charging upfront. It’s a win-win: users only pay for what they value, and we can cater to both free and paying customers.
The key to successful in-app purchases is identifying what users would willingly pay for without disrupting the app’s overall experience. For instance, in a gaming app, this could be access to premium levels, virtual currency, or exclusive items. In a productivity app, it might be enhanced features like unlimited file storage or advanced analytics.
Take Candy Crush Saga, a classic example in the gaming world. The app is free to download and play but offers in-app purchases like extra lives, boosters, and level skips. These microtransactions generate billions in revenue annually, largely because they’re optional but enticing to users eager for progress.
Another great example is Evernote, a productivity app. While the core app is free, Evernote offers premium features like offline access and increased storage space via in-app purchases or subscriptions. Users can upgrade as they grow more reliant on the app.
Why It Works:
- Flexibility: Users can decide when and if they want to spend money.
- Scalability: As your user base grows, so does the potential for revenue.
- Customisable Offerings: You can tailor purchase options to different user segments, maximising value.
When we introduced in-app purchases in one of our mobile projects, we found that transparency was crucial. Users are quick to drop apps they perceive as exploitative. Offering a clear value proposition-like faster progress or advanced features-ensures users feel they’re making an informed decision.
Additionally, we used A/B testing to refine what we offered as in-app purchases. For example, bundling multiple perks at a slight discount drove more sales compared to offering single features. Tools like Firebase helped us analyze user behavior and optimise our offerings.
Monetising mobile apps through in-app purchases is about balancing user satisfaction with revenue goals. By offering value-aligned options and keeping the process user-friendly, you can turn engaged users into paying customers without alienating your broader audience.
Max Shak, Founder/CEO, Nerdigital
Using Subscriptions for Monetisation
Monetisation depends on the nature of your app. The easiest and fastest way for an app to monetise is with subscriptions. RevenueCat offers a lot of tips and case studies on monetisation. Our travel friends app Fairytrail uses a freemium model so that all users get value. Power users opt for a paid version in return for a better experience. Advertising can also be a highly effective method to monetise but requires more traffic to be impactful and often hurts the user experience. That said, if ads are implemented in a natural way, it can be very effective such as how Instacart implements ads as sponsored results and discounts.
Taige Zhang, CEO, Fairytrail
In-App Advertising for Revenue
In my experience helping law firms grow their mobile presence, in-app advertising has been a reliable monetisation strategy that I’ve seen work incredibly well – just look at how apps like Wordscapes generated over $100 million through strategic ad placement that doesn’t disrupt the user experience. I usually recommend starting with banner ads at natural transition points (like between levels or articles) and then gradually testing interstitial ads, which can boost revenue by 200-300% when placed thoughtfully, though you have to be super careful not to annoy users and drive them away.
Patrick Carver, CEO, Constellation Marketing
Multiple Revenue Streams for Sustainability
In my opinion, today’s app market requires a multiple revenue stream strategy from the outset to build a sustainable and scalable business. Relying solely on ad revenue is no longer a viable strategy, especially if you intend to scale through investment. Many investors now view ad-only models as short-sighted, making diversification critical to success. With multiple monetisation avenues, if one stream underperforms, others can bridge the gap and help achieve revenue goals.
At Buddy Run, we’ve embraced this approach by integrating commission-based storefronts for both physical goods and services. For instance, our app features a pet store offering dog products and accessories, as well as partnerships with pet insurance providers. These storefronts generate revenue through affiliate commissions, offering value to users while securing a reliable income stream for us.
Another key avenue is data monetisation, provided that regulations like GDPR or CCPA are carefully followed. Aggregated and anonymised data can be valuable to brands for market research, advertising, and product development. Apps like Strava and MyFitnessPal have successfully used this strategy, leveraging user data to create partnerships with companies that target active and health-conscious consumers.
Subscription models are another strong monetisation strategy. Apps like LinkedIn and Duolingo offer free access to basic features while charging for premium options, such as advanced tools or ad-free experiences. At Buddy Run, we see similar potential with features like personalised walking routes, advanced pet health tracking, or exclusive content that users could access through a subscription plan.
Gamification can also open doors to in-app purchases. Apps like Pokemon Go have mastered this with in-game currencies and sponsored content that monetise user engagement. In our app, features like leaderboards and rewards systems drive activity and could create opportunities for microtransactions or sponsored challenges.
By combining commission-based storefronts, data monetisation, subscriptions, and in-app purchases, you create a diverse and robust revenue model that enhances scalability and investor appeal. A multi-pronged approach ensures that your app isn’t overly reliant on a single income stream, setting the foundation for long-term growth and adaptability in today’s competitive app market.
James Murray, Founder, Buddy Run
Freemium Pricing Model
One effective step in monetising a mobile app is using a freemium pricing model offering a free version with essential features while charging for premium upgrades. In our experience, this strategy lowers the barrier for new users while creating opportunities to upsell.
We’ve found the key to success is carefully balancing what’s offered in the free tier versus the paid tier. Give enough value in the free version to hook users, but reserve compelling features for premium users. For example, apps like Duolingo do this well. The free version provides core language lessons with ads, while the paid tier removes ads, adds offline access, and offers progress tracking.
When we’ve implemented freemium models for clients, we focused on identifying the feature that solves a basic need and offering that for free. Advanced tools such as customisation options or integrations become the incentive to upgrade.
This approach works because users get to experience the app’s value firsthand before committing to a purchase. The trick is to make the upgrade feel like a natural next step rather than a hard sell.
Vikrant Bhalodia, Head of Marketing & People Ops, WeblineIndia
