Choosing Your Monetization Model
The right monetization strategy depends on your app type, target audience, and competitive landscape. The main models are:
- Free with Ads: Large user base, ad revenue
- Freemium: Free core, paid premium features
- Subscription: Recurring revenue, high LTV
- Paid: One-time purchase, lower volume
- Hybrid: Combination of models
In-App Purchases Done Right
Maximize IAP revenue ethically:
- Create real value for purchases
- Offer a range of price points
- Use consumables and non-consumables strategically
- Never create pay-to-win mechanics
- Test pricing in different markets
The best in-app purchases enhance the experience without ruining it for non-payers.
Subscription Model Success
Subscriptions provide predictable revenue:
- Offer free trials to reduce friction
- Provide clear value proposition
- Offer monthly and annual options (with annual discount)
- Focus on retention over acquisition
- Continuously add value for subscribers
Advertising Strategies
Balance revenue and user experience:
- Rewarded Video: Highest eCPM, opt-in
- Interstitial: High impact, use sparingly
- Banner: Low eCPM, non-intrusive
- Native: Integrates with content
Key ad networks: AdMob, Unity Ads, AppLovin, ironSource
Hybrid Monetization
Combine models for maximum revenue:
- Offer ad removal as a purchase
- Use ads for free users, subscriptions for power users
- Implement rewarded ads that give in-app currency
- Test combinations to find optimal mix
Pricing Psychology
Use psychology ethically:
- Anchor with a high-priced option
- Use charm pricing ($4.99 vs $5.00)
- Show savings for bundles
- Create urgency with limited offers
- Localize pricing for different markets
Metrics That Matter
Track these monetization KPIs:
- ARPU (Average Revenue Per User)
- LTV (Lifetime Value)
- Conversion Rate
- ARPDAU (Average Revenue Per Daily Active User)
- Subscription retention rate
- eCPM for ads