# Business development
How Do Mobile Apps Make Money?
Red Rocket teamApr 4, 20256 min read
In This Article
How Much Money Can You Make from an App? What is the Current Situation with App Monetization in the Market? App Monetization In-App Purchases vs. Mobile Site Freemium Apps vs. Paid Apps The Best App Monetization Methods How to Choose the Best App Monetization Model? Want to Monetize Your Mobile App? Final ThoughtsIt's no secret that building your own mobile app is an expensive and time-consuming process. However, such a decision can serve as a profitable investment that will pay off in the near future. Are you still in doubt? Take a look at how popular apps make money in recent years. According to the statistics about mobile app monetization, the total revenue worldwide was more than $171 billion. It sounds impressive, doesn't it?
This proves the fact that you can create an app that will quickly pay off and start making you a net profit. Another advantage is that in many cases, apps provide passive income with minimal interaction with the product. In fact, there are several actual ways that apps make money. In this article, we will talk more about the best app monetization strategies in 2025.
How Much Money Can You Make from an App?
You've probably already heard about the stories of the incredible earnings of mobile apps. Instagram, Uber, Badoo, Clash of Clans – all these apps bring their owners hundreds of millions of dollars a year. However, only owners of large and successful applications can count on such revenue. To achieve great popularity, you may need to make huge investments in the marketing area.
Even if your application doesn't have a huge user base, you can still expect to make a profit. You can show ads to users within the product. You can get from 8 to 15 thousand dollars for every thousand views (depending on the country). The biggest rewards for interstitial ads are in the United States. Different types of ads (images, banners, and videos) are also priced differently. Thus, with 50 thousand users per month, you can get several thousand dollars, thanks to advertising. Using other monetization strategies, you can increase app revenue several times.
What is the Current Situation with App Monetization in the Market?
You can say that this market is crowded with competitors and it is very difficult to get a loyal customer base here. In reality, the number of apps on Google Play has decreased by 55% since 2017. Here are other facts about the current situation with mobile app monetization:
- Users of Android devices download applications from the market more often than owners of iOS gadgets.
- In 3 months, on average, people from all over the world download 25 billion times.
- In the next few years, native advertising will be the most profitable tool in mobile apps.
The above described facts tell you that it is never too late to enter this market. With a quality product and the right approach to marketing campaigns, you can succeed.
App Monetization In-App Purchases vs. Mobile Site
Mobile apps tend to provide a smoother and more personalized experience when selling products than mobile sites. User data is another great way to do in app purchases that will give tailored recommendations and increase the probability of conversion. Furthermore, applications can use push notifications that the device offers to encourage the purchase at the speed of time. Mobile websites can be used on any device and don’t need to be downloaded.
However, mobile apps are also more expensive in development and maintenance. It makes them less appropriate for smaller businesses constrained by their budget. However, the cost-effective mobile site has mobile payment solutions and should also have optimized interfaces to smooth the purchasing experiences. Mobile sites may make the most sense if businesses want to widen their reach with as little investment as possible.
Freemium Apps vs. Paid Apps
The Freemium apps allow users to give the core functionality a spin for free before upgrading to access additional features or benefits. This is a model that can work quite well for apps that provide recurring services such as gaming or productivity tools and where the user can sample the product without committing. Successful freemium strategies include limited-time promotions, in-app rewards, and notable premium features. A wide user base is easy to attract, but conversion to paying customers is challenging.
On the other hand, paid apps generate up front revenue, and that is better for developers to predict. However, this model does set a limit on how many people will use the app because users are still reluctant to pay for an app without giving it a try. For high-value apps with unique functionality or services that hold true to justify their price, the paid application model is the best solution.
What Are the Best App Monetization Methods?
As we have mentioned above, there are many ways to generate revenue from mobile apps these days. All of them differ in their working principle as well as other features. Here are the best of them:
- Freemium strategy;
- Recurring SaaS revenue;
- Brand partnership;
- Community-driven financing;
- Referral marketing.
We recommend reading more about the best app monetization strategies. This will help you get a clear understanding of which methods are best to use for your product.
Freemium App Strategy
The strategy is the free version of the mobile application along with basic features, and a paid version for premium features or upgrades. This model works well for apps where value continues to be delivered, i.e., gaming or productivity tools. It’s a draw for a big crowd and testing of the app before the user commits financially. In such applications, you can also show ads and get a fixed financial reward for every thousand views.
Recurring SaaS Revenue
Subscription-based services are offered within the app, and it generates recurring SaaS revenue. Specifically, this model provides steady, predictable income over time and usually applies to business, productivity, or entertainment-style apps. These subscriptions are monthly, annual, or continuous access to valuable content and features. This is a sustainable revenue model that builds long-term customer relationships and allows for continuous updates.
Brand Partnership Funding
Brand partnership funding involves collaborating with other businesses or brands for them to have their products or services integrated into the app. This can include advertisements within the app, such as sponsored content and in-app ads, or co-branded experiences. Through partnerships with solid brands, app developers can actualize income without counting only on consumers.
Community-Driven Financing
Since crowdfunding platforms or in-app donation options are community-driven, app creators can receive financial support from their user base. Such a method works well for apps with a loyal or passionate community that’ll pay you financially for special perks, early access, and unique content. This allows app developers to gauge interest, reduce the financial risk involved when developing a mobile application, and create a sort of shared ownership among users.
Referral Marketing Income
Referral marketing encourages users to share the app with other people to give them rewards or incentives. Such a strategy helps with user acquisition and app visibility and generates revenue. Many referral programs provide some benefit to the referrer and the referred: discounts, premium features, or cash rewards. App developers can get new audiences with little upfront costs to promote by leveraging users as promoters and turning satisfied customers into effective brand ambassadors.
How to Choose the Best App Monetization Model?
Above, we have already talked about the most popular and profitable monetization models. However, there are quite a few options for generating revenue, which makes it difficult for beginners to choose. If you want to choose the best app monetization, you should take a professional approach and do some research. Below, we will share detailed tips with you.
Analyze Your Audience
Selecting the best app monetization model is dependent on your audience. You should look at demographics, user behavior, and spending habits. Are they more inclined to pay for premium features, or would they settle for a free app with free, advertised ads? By analyzing your target audience you are actually tailoring the monetization strategy with the preferences of your audience relating to higher engagement and more revenue.
Analyze Your Competitors
Competitor analysis allows you to understand which monetization model will work in your app’s niche. Study similar applications and attempt to understand the money they make. Do they sell in-app purchases, subscriptions, or ads? They help you know which are struggling in the market and which are almost doing well.
Experiment with App Revenue Models
By testing different revenue models for your app, you can find the best. Try a marketplace, freemium, subscriptions, or ads to pick the one that resounds with your audience the most. A/B testing can show you exactly how your users behave with your product and gives you valuable feedback about what to do to optimize your monetization approach.
Want to Monetize Your Mobile App?
There are many examples in the world that can inspire you to create your own mobile app to generate revenue. For example, TikTok earns more than 500 million dollars a year, according to unofficial information. If you want to create an app and monetize it, you've come to the right place.
At Red Rocket, we specialize in high-performance mobile app development. If you have an app idea, we are ready to bring it to life, regardless of the field. Our team can help build mobile apps for healthcare, dating, eCommerce, education, and more. We will also help to ensure that you get the desired app revenue in the future. For this task, our experts will develop a custom business strategy and help with choosing the monetization model that best suits your case. Start making money from apps with Red Rocket!
Final Thoughts
As you may have already realized, apps can be a powerful tool for generating revenue in 2025. The larger your user base, the more you can make money from mobile apps. That's why we recommend focusing on the requirements of your target audience and don't skimp on advertising campaigns. Also, don't forget to analyze the best strategies for monetization to choose the best option for your case.Frequently asked questions
What is the business model of a mobile app?
There are several variations of business models for a mobile app. Among the most popular models are advertising, in-app purchases, and subscriptions. So you can choose for yourself how to generate revenue through the app.
How do free apps make money without ads?
Such apps use other strategies for monetization. For example, they are free to download but have paid subscriptions. Another way to earn money from free apps is to add the possibility of internal purchases for users.
How much money do Android apps make?
The potential profit depends on the type of app monetization and the number of users. For example, average Android apps with downloads over 100 thousand views can earn around $20 thousand dollars per month. The way you are involved in marketing campaigns also affects the amount of money earned from apps.
