How Does App Monetization Work?


According to current forecasts, the market of mobile apps is going to grow and reach billions of dollars. This is a very competitive area. Therefore, it is important for marketers to use the best monetization strategy, stay up to date with the most popular ways to monetize their applications and understand how this area will develop. Today, we will look at how monetization works now and what awaits it.

In-app Advertising

Advertising in applications, such as the dating ad or something similar, is relevant, and it is one of the main ways of monetization. There are several popular ad formats worth considering in this context:

  • Video for a fee. It is built on gamification – users are motivated to view such ads as they receive certain bonuses for this. Bonuses can be in-app purchases in gaming applications and not only. According to eMarketer, this format has become the most common among other options.
  • Playable option. It assumes that the user is involved in the gameplay while watching ads. For example, among American developers, this format is named the most effective.
  • Native advertising is considered the most unobtrusive supply of advertising content. It seems to be built into the context of the page and not interfere with the user. According to the programmatic platform SmartyAds, 84% of native ads in apps are programmatic ads.

It is expected that the development of 5G technologies will affect the growth of advertising in applications.

Freemium Model

It implies that the user can use the application for free but, at the same time, with the presence of advertising in the application interface. Since almost all users are not ready to immediately pay for an application with which they are not yet familiar, this option is considered very popular.

Freemium application monetization includes several methods. The first is the user’s subscription to the paid version. Another way is the same ads in the application.

In-app Buying and Its Types

Globally, users are spending billions of dollars on in-app purchases, according to recently released data. For many developers, this kind of app monetization is still a staple.

Internal buying is divided into several types: subscriptions and purchases of consumables and non-consumable items. A subscription is understood as payment for access to content for a certain period.

As consumable items are the currencies inside game applications, coins, gems, and ‘health’ points in the game may be used. Non-consumable items include one-time purchases, for example, unlocking a level or a specific character in the game. Disabling ads can also be considered this type.

What Trends Can Be Expected?

A combination of several monetization methods is gaining popularity. By focusing on only one channel of monetization, it is very easy to lose, so it is better to combine them.

The technology of in-app bidding involves in-app ad inventory being put up for auction, where advertisers simultaneously bid to buy back the inventory. The popularity of this technology is growing, so we can consider it a trend.