Blog: How to monetize your mobile application?

You are almost ready to submit your application to both the iOS App Store and Google Play Store. Now what? Odds are you’re seeking a way to make some money from your application. You definitely want to see a return on the investments into the development and promotion of your app. We at DB Best have developed quite a few mobile applications for startups. So, we can share our experience with different approaches to monetizing your app.

1. Paid application

In this scenario, you earn money from every download. So, the amount of your revenue depends directly on the number of downloads. However, you should consider that the market is overloaded with free applications. So, you will find it difficult to hit thousands of downloads with a no-name application.

You need to remember, that the user expectations for the paid applications are high. That means that you need to satisfy users with a truly high-level delivery. Otherwise, you risk getting low app rates simply because the users expect more.

Read our separate blog post to decide whether you need a free or a paid application. Below, we will discuss monetization ideas, which you might want to use in freemium applications. By the way, the freemium app users spend on average $25 per month. Let’s see how you can take a piece of that money with your app.

Freemium app revenue


2. Subscriptions

Application subscriptions are one of the latest inventions on the monetization market. And it looks like it’s the best one for the developers of regularly used applications. Simply put, you sell the unique features of your application to the same user every month.

The key thing about subscriptions is that the developer gets the revenue constantly, on a regular basis. It’s like with YouTube Premium, where the users are willing to pay a monthly subscription fee for watching videos without ads. All you need is to invent the same effective and deliberate strategy to make money from thin air.

Even if users forget about your application you’ll still get their money. Of course, if you set the subscription to auto-renew, the app proceeds to charge the user again at the end of the subscription, be it in a month or a year.

3. In-app purchases figured out that users spend 28% more money on in-app purchases (IAP) than on app downloads. So, you can earn more money with your free mobile application with wise in-app purchases rather than with a paid application. But before you start monetizing your application with in-app purchases, you really need to ensnare your users.

As the owner of a freemium application, you may sell any sort of items that the users may need in the game or in the application. You can start with the basic consumable items (like coins, power-ups, etc.) and end up selling personalization features for the game character. Depending on the type of your application, you can sell additional tutorials for an educational app or some really cool filters for an image or video editing app. Basically, you can earn money on any app feature that stands out of the crowd.

You can even consider removing adswith an in-app purchase. However, from the financial point of view, you might want to add this option to the subscription fee.
The prices of the in-app purchases start at just $0.99. However, the most popular in-app purchases cost $4.99 and $9.99. So, we recommend adding these packages into your app and give them the best value for money.

4. Advertising

Adding ads to your mobile application is probably the most popular monetization option. You can contact various ad networks and pick the one with great content and fair fees. These include Google’s AdMob and DoubleClick, Leadbolt, Tapjoy, AppLovin, InMobi, AdColony, and Chartboost. Of course, this list is not exhaustive, so you can feel free to try any other mobile ads service provider.

So, the ad networks provide the developers with the SDK to access the ads. Usually, they pay the developers some money for views or impressions, and a little bit more for clicks. And the conversions, which are actually the purchases, provide developers with really good revenue. Considering this funnel sale, you really might want to take care of matching your application’s audience with interesting ads.

Now, let’s take a look at the most popular types of ads you can use in your application.

Types of mobile ads

First of all, you can insert a native ad, which will look like a content element embedded in your application. This type of ad is good for news websites or applications.
Also, you can opt for using an interstitial banner, which appears between two content pages in an app or between two levels in a game. Usually, this approach is very frustrating for the end users.

Video ad revenue


Videos are the most popular type of ad content in mobile applications. You can earn up to $6 for 1,000 video views in your mobile app depending on your ad network.

You can use skippable videos with minimal time to watch before the user can skip the ad. Also, you can leverage rewarded videos, which bring the users some kind of benefits for watching. These benefits include additional coins, a chance to play the next level without the need to wait, or some other rewards. While users can buy the same amount of benefits with real money, however, many users prefer getting rewards for watching videos.

How to increase ad revenue

First of all, let’s discover, how do you actually get the revenue from the ads? Your revenue equals the cost of one thousand ads (eCPM) multiplied by the number of ads actually shown. All ad networks set up the demographics and desired location of users to view the ads. So, if your main audience comes from the US, you will not want to use the ads targeted to the European users, right? Basically, as the developer, you need to know your audience to select the ads, which correspond to your app users.

Mobile app ad revenue


With that said, here are our best practices to increase ad revenue.

  1. Start with a strategic app marketing and promotion campaign to get a more valuable audience.
  2. Use multiple ad networks. This is crucial if you own a global app.
  3. Try real-time bidding auctions for local ads. This approach allows for making even more money based on the user’s locations. The ad rate may increase dramatically in selected areas at a specific time, for example, during a certain event in order to target its audience. You don’t need to do something special with your app to leverage real-time bidding services. Simply embed the SDK and discover what it’s worth with your app audience.
  4. You should always review analytics on your various ad campaigns. But what’s even more important is that you can change your ad strategy depending on the analytics overview. You can entice new users to your app by decreasing the ad frequency. Paying more respect to the users can give you a bigger user base to play with. You can show fewer ads to the users who already made purchases from your ads. Try changing your tactics to grow the user base and the ad revenue as the result of that.

5. Sponsorship and white labeling

To find a sponsor, you really need to have a popular mobile application in a particular segment. Realistically, the sponsor wants to purchase access to your audience rather than anything on your particular app. So, you can provide them with native ads or various co-branding ideas.

However, there is a thin line between sponsoring or co-branding and actually selling your business. If your sponsor really likes the product, they can acquire it or quit sponsoring you in order to create their own application.

In addition to various sponsorship programs, you can consider white-labeling of your application. This means that other brands can rebrand your app and deploy it to the market as if they have created it. Many brands prefer to buy a ready-to-use app rather than develop one from scratch. So, if you’re good at coding but not at marketing promotion, we recommend considering this strategy.

6. Crowdfunding

Crowdfunding is very popular with through services like Kickstarter or Indiegogo. While there have been some successful stories of mobile application crowdfunding developers are often competing against a wide-range of different projects all vying for the same small sliver of donations. Regardless, whether you plan to manufacture goods or design a mobile application, you need time and money and crowdfunding can give you access to that. But in order to succeed with your application, you need to have a big user base or a really mindblowing application idea. Otherwise, you will struggle hard to complete the funding for your project.

7. Forbidden strategy

And the last mobile app monetization strategy is actually the one you should never ever use. It’s all about collecting and selling the user’s data, and it’s totally illegal.

However, both the App Store and Google Play have quite a lot of applications that actually do nothing except for collecting user’s data. Please, be careful with such kind of applications, and we suggest you remove them from your smartphone as soon as possible.

The best way to monetize your mobile application

This is a brief overview of the most popular application monetization strategies. You may want to leverage all of them in your application or try to find a successful combination of services to use. Wrapping the things up, we want to say that understanding your audience in the key to success in application development, promotion, and monetization.

If you are looking for a reliable application development partner, be sure to check our dedicated website. Contact DB Best to turn your idea into a mobile application within a short period of time and reasonable price.

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