Most app owners earn less than they could in 2025. These 9 strategies will help you increase your income from app monetization. We also talked about how to choose the right strategy, where it is best to monetize your applications, and which trends will help you do this more effectively.
This guide will explain every proven and effective strategy that works for app monetization in 2025. You will learn what strategy works for what type of app, how to implement these strategies without making the users discontented and which platform brings the best result. You’ll have a clear roadmap and plan in place to ensure your app produces a sustainable income.
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What is Mobile App Monetization?
Mobile app monetization is the process of making money from your app through methods other than an upfront payment. Consider it as generating various income streams from a single product. Your app becomes a platform that can generate revenue through advertisements, subscriptions, purchases, or data.
Various monetization techniques are more effective for certain app categories. Gaming apps thrive with in-app purchases, while news apps often succeed with subscription models. The most important thing is to align your strategy with the objective of your application and your user’s behavior patterns.
Why Is Mobile App Monetization Important?
Free apps dominate both major app stores today. Statistics from May 2025 show that 95.41 percent of all iOS apps were available for free. Google Play Store numbers look similar, with 96.95 percent of apps being freely available. This data indicates a major shift toward free apps, which means developers can no longer rely on download fees alone.
Users like free apps, but they’re likely to pay for value in the app once they’re engaged. Use smart monetization to implement the solution that gets your users what they want. Free apps also reach larger audiences. Users are more likely to download an app and try a new app if there are no up-front costs. This helps build a relationship with users before you ask for money.
Natali
Senior Publisher Manager at HilltopAds.
One big mistake mobile app developers may have when choosing a monetization strategy for their app is copying another app’s model without considering their own audience or app type. Many also overload users with ads too early, which hurts retention. Another common issue is not testing enough, assuming one strategy will work forever instead of optimizing over time.
9 Strategies for Mobile App Monetization
This section breaks down the most effective ways to generate revenue from your app, complete with real-world performance data and practical considerations.
Freemium Model
The freemium strategy allows users to access basic features for free and charges for upgrades. A huge number of people used the freemium model of apps, which required no actual payment. A great example of this model is Spotify, which had a 46% conversion rate of users switching from free to premium in 2024.
Freemium apps have a conversion rate of 2.6% to 5.8% on average but very successful ones much more. It’s essential to provide enough value in the free version to attract users while ensuring that the premium version is compelling enough for users to upgrade.
Pros
- Large user base due to free entry;
- Multiple revenue streams from ads and subscriptions;
- Users can test before committing to payments;
- Scalable business model.
Cons
- Most users never upgrade to paid versions;
- Requires careful balance between free and premium features;
- Can frustrate users if free limitations feel too restrictive.
In-App Purchases
In-app purchases (IAPs) bring in 48.2% of mobile app revenue and are projected to hit $257.23 billion in 2025. This strategy allows users to purchase virtual items, extra features and premium in-app content. Though gaming apps were the mainstay of this genre, productivity and entertainment apps are increasingly using the same approach.
A standout example is Honor of Kings, which made over 143 million U.S. dollars primarily through in-app purchases in June 2025. The game offers cosmetic items, battle passes, and other optional features that enhance the experience without disrupting gameplay fairness.
Four main types of in-app purchases exist:
- Consumable items: Virtual currency, extra lives, power-ups that get used up
- Non-consumable items: Permanent upgrades, character unlocks, cosmetic items, etc.
- Auto-renewing subscriptions: Monthly or yearly access to premium features
- Non-renewing subscriptions: Time-limited access that requires manual renewal
Pros
- Convenient purchasing within the app;
- Flexible pricing for different user segments;
- Can generate recurring revenue;
- Works well for engaged user bases.
Cons
- Risk of “pay-to-win” perception
- Can alienate users who feel pressured to spend
- Requires ongoing content creation
- Platform fees reduce profit margins
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In-App Advertising
By 2025, in-app ads will produce $390.04 billion worldwide, making it the largest revenue driver for mobile monetization. In-app ads are simply advertisements displayed within an app that allow developers to earn revenue without charging users for the app itself.
Candy Crush, a popular free-to-play game, integrates rewarded ads and banner ads in a way that feels natural. Players can watch ads to earn in-game rewards, turning ads into a feature rather than an annoyance. Similarly, Spotify’s free tier relies on in-app ads, which not only drive revenue but also encourage users to upgrade to a premium subscription, contributing to a year-over-year increase in paid subscribers.
Ad formats include:
- Banner ads: Small rectangular adverts that show at the top or bottom of your device
- Interstitial ads: Full-screen advertisements that appear in-between app activities or during expected breaks
- Video ads: Short video ads playing in the app
- Native ads: Ads that match the look and feel of an app’s regular content
- Rewarded ads: Ads that give you something in return for watching
Each format serves different purposes and generates varying revenue levels. Banner ads have low click-through rates (CTR) around 0.1%, while rewarded video ads achieve much higher engagement.
Pros
- Works with free apps to generate revenue;
- Multiple ad formats to choose from;
- Can provide value to users through rewards;
- Scales with user growth.
Cons
- Can disrupt user experience if poorly implemented;
- Revenue depends on user engagement and geography;
- Competition from other apps can appear in your ads;
- Requires significant user base for meaningful income.
Affiliate Marketing & Partnerships
Through affiliate marketing, you can earn commissions for promoting other companies’ products or services in your app. Many tech companies like Google, Apple, and Microsoft run affiliate programs for app developers. The global affiliate marketing industry grows by 18.6% every year until 2032 and will grow to $48 billion by 2027.
Two main approaches work for app developers:
- Partner with companies to sell their products through specialized tracking links
- Promote other apps through app store affiliate programs
Pros
- No upfront costs to implement;
- Can build relationships with brands for future opportunities;
- Works well with engaged audiences;
- Additional revenue stream without charging users.
Cons
- Highly competitive market;
- Requires large, engaged user base;
- Can damage brand trust if not done carefully;
- Time-consuming to recruit and manage partnerships.
Subscription Model
Subscription monetization brings in continuous revenue from users with monthly or yearly fees. Apps classified under this model provide value to consumers in a consistent and ongoing manner. Examples include news, entertainment, and productivity apps. In 2024, subscription revenue from apps reached $66.8 billion, with further growth expected.
Netflix is a perfect example of this success; it makes over $44 billion a year from subscriptions by always giving viewers something fresh that keeps them coming back.
Pros
- Predictable, recurring revenue stream;
- Higher lifetime value per user;
- Builds long-term user relationships;
- Can justify ongoing development costs.
Cons
- Requires consistent value delivery;
- Users may cancel if they don’t use the app regularly;
- Competition from other subscription services;
- Must continually add new content or features.
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Sponsorship Model
Sponsorship is when you partner with a company and give them exclusive access to your users for advertising. It is ideal for apps with large, engaged audiences that are a good fit for a sponsor’s target market. Companies pay to appear front and center within your app with a splash screen, branded content, or similar.
Pros
- Higher revenue per partnership than traditional ads;
- Less cluttered ad experience for users;
- Opportunity for long-term brand relationships;
- Can include cross-promotion benefits.
Cons
- Difficult to find suitable sponsors;
- Requires large user base to attract sponsors;
- Risk of users rejecting sponsored content;
- Limits flexibility in monetization options.
SMS Marketing
SMS marketing reaches users directly through text messages about in-app purchases, premium subscriptions, or special offers. This strategy achieves an 18% click-through rate compared to email’s 2.5%. The SMS marketing industry grows at 1.93% annually and will reach 870 million in market volume by 2029.
Pros
- High engagement rates compared to other channels;
- Direct communication with users;
- Cost-effective implementation;
- Works well for time-sensitive promotions.
Cons
- Can be perceived as spam if overused;
- Requires explicit user consent;
- Limited message length;
- Not suitable for all app types or audiences.
Hybrid Monetization
Using more than one monetization strategy can maximize revenue potential and lessen dependence. Currently, around 75% of app revenue comes from ads and 25% from in-app purchases, showing how hybrid models have become the standard approach. Top apps offer in-app ads along with freemium and subscription options. This method allows you to target various user segments with different monetization methods.
Clash of Clans is a good example of this strategy because it uses both in-app payments and ads. To speed up progress, players can either buy materials for the game or watch ads. Candy Crush Saga does the same thing by letting players buy additional lives and power-ups in the app and then rewarding them with video commercials that give them bonuses.
Pros
- Multiple revenue streams reduce risk;
- Can optimize for different user behaviors;
- Flexibility to adjust strategies based on performance;
- Higher overall revenue potential.
Cons
- More complex to implement and manage;
- Can confuse users with too many options;
- Requires careful balance to avoid overwhelming users;
- Need expertise in multiple monetization areas.
Paid Apps
Charging users a one-off fee to download your app is the simplest way to monetize. Users pay in advance before they are entitled to any features. This approach works best for applications that are valuable to the users and cannot find any other substitute.
Most premium apps cost between $0.99 and $9.99. Certain specialized business apps cost more than that. A mere 4.59% of iOS apps and 3.05% of Android apps use this paid model. Developers tend to avoid using this model since users want to use an app rather than buy it first.
Pros
- Immediate revenue from each download;
- No need to implement complex ads or purchase systems;
- Users get the complete experience without restrictions.
Cons
- High barrier to entry reduces downloads;
- Difficult to compete with free alternatives;
- No ongoing revenue after the initial purchase;
- Must provide exceptional value to justify the cost.
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How to Choose the Right Strategy for Mobile App Monetization
Choosing the best monetization method requires careful analysis of your app and its target market. Key factors to consider when making the choice:
App Purpose and Category
Gaming apps benefit from in-app purchases (IAPs) and rewarded video ads, while news apps do better with subscriptions and banner ads. Many productivity applications are successful in converting users to premium versions using a freemium model.
Target Audience Demographics
People’s age, income level, and spending habits will decide the monetization method. Younger users accept ads more readily, while professionals prefer ad-free subscription experiences. Consider that personalized experiences drive 62% of customer retention and can lead to meaningful increases in sales and profit margins.
User Engagement Patterns
Apps that users engage with daily can implement several monetization layers, from ads to in-app purchases to subscriptions. Apps meant for occasional use require less complex monetization strategies. Remember that engaged users tend to spend more, with banking apps showing 37% higher revenue from engaged users.
Competition Analysis
Look at the apps in your category that have been successful. How did they make (or plan to make) money? Look for areas where your competitors fail to meet the needs of a user segment or miss out on a monetization opportunity.
Development Resources
Some monetization tactics require continuous content creation, customer support, or tech maintenance, consuming precious time of small dev teams. Setting up ads is easy but they only generate revenue when you have enough users or visitors. If you don’t have a lot of people on your team; start easy. As your app grows, you can always add more monetization strategies to earn money.
Geographic Markets
The amount of money spent on advertising varies greatly between regions. In the U.S., for example, the ad revenue generated per user is set to reach $59.23 in 2025. European markets show a greater acceptance of subscription models, in contrast to their Asian counterparts, which prefer ones focused on microtransactions.
Platform Considerations
Android users are the most suitable for ad-supported apps when compared to iOS users. This is because iOS users make more in-app purchases as compared to other platforms. Android users spend an average of $6.19 per app, while iOS users spend an average of $12.77 for each app, according to Tekrevol’s data.
Long-term Goals
Subscription models provide predictable recurring revenue but require continuous value delivery. In-app purchases may offer greater short-term spikes, although these depend on the engagement patterns. Existing customers are more valuable than new customers. In fact, acquiring new customers costs 5 to 25 times more. Engaged apps tend to drive more spending.
Natali
Senior Publisher Manager at HilltopAds.
It really depends on the type of app and your audience. Check which ad formats fit your user experience best, and always look at real feedback from similar apps. The smartest move is to test different platforms and models. Only data will show you what actually works.
Best App Monetization Platforms
Almost 60% of app developers earn less than $500 monthly because they pick the wrong monetization platform. The difference between a struggling app and a profitable one often comes down to this single choice.
HilltopAds
HilltopAds is the best ad network for mobile apps owners since 2013 with the highest CPM rates for mobile app traffic from all over the world. We help mobile app developers monetize their apps successfully with our ad formats, without disturbing their audience.
With our built-in anti-AdBlock solutions, AI optimization tools, postback tracking, and more, we help mobile app developers maximize their revenue.
The platform keeps cash flow steady with weekly payments and offers multiple ad formats for testing various approaches. Publishers can choose from 10 convenient payment methods, including Bitcoin, PayPal, USDT, and Wire Transfer.
To learn more about mobile app monetization with HilltopAds, check out this step-by-step guide:
Pros
- Clean, pre-approved ads ensure safe content for all audiences;
- Built-in anto adblock tools;
- Weekly payouts without delay;
- Advanced API tools enable seamless integration and automation;
- Personal support for each publisher.
Cons
- Results depend on traffic quality and optimization effort;
- Performance varies with publisher customization level.
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Google AdMob
Google AdMob integrates with Google’s massive advertiser network, providing high fill rates and global reach. The platform offers comprehensive analytics powered by Google Analytics and supports multiple ad formats including banners, interstitials, native ads, and rewarded videos.
Pros
- Extensive advertiser demand worldwide;
- Advanced analytics and optimization tools;
- Multiple ad format support;
- Strong integration with Google services.
Cons
- Strict policy enforcement can result in account suspension;
- Lower eCPMs compared to premium ad networks;
- Limited control over ad content and appearance.
Unity Ads
Unity Ads specializes in mobile game monetization, offering ad formats tailored for in-game integration. They specialize in rewarded video ads that provide players with in-game benefits for watching promotional video ads.
Players choose whether or not to engage with the ads to get rewarded. Developers earn money from a retained audience and users do not suffer. Unity Ads works with the Unity game engine without any additional requirements.
Pros
- Perfect integration with Unity game engine;
- Ad formats designed for gaming experiences;
- Machine learning optimization for ad placement.
Cons
- Limited appeal for non-gaming apps;
- Revenue depends heavily on user engagement with rewards;
- Complex mediation setup when using multiple SDKs.
AppLovin
AppLovin is a platform for mobile app user acquisition and monetization. The platform lets developers grow users and maximize revenues of existing users through smart ads targeting.
AppLovin’s system utilizes machine learning and artificial intelligence for optimizing ad delivery. This method enhances UX and revenue by presenting more pertinent adverts in a more timely manner. The platform allows you to explore varied ad formats along with thorough analytics tools.
Pros
- AI-powered ad engine maximizes revenue;
- Integrated analytics, mediation, and creative support;
- Scalable for small and enterprise publishers.
Cons
- Primarily mobile-focused platform;
- Learning curve for campaign optimization;
- Competitive environment increases costs.
Smaato
Smaato provides a global advertising platform that connects app publishers with premium demand sources. The platform offers real-time bidding technology that maximizes ad revenue by creating competition among advertisers for ad space.
The platform supports programmatic advertising buying, which means ads get sold automatically to the highest bidder. This auction-based system typically generates higher eCPMs than fixed-rate advertising deals. Smaato also provides detailed analytics and optimization tools for publishers.
Pros
- Real-time bidding for maximum revenue;
- Global advertiser demand;
- Multiple ad format support;
- Advanced analytics and reporting.
Cons
- Requires technical knowledge for optimal results;
- Smaller network compared to Google;
- Fill rates vary by geographic location.
The Future of Mobile App Monetization
Apps with AI personalization features generate more revenue per subscriber than traditional apps, while augmented reality shopping has conversion rates through the roof. The future of app monetization is about not making money but creating experiences a user cannot resist paying for.
Natali
Senior Publisher Manager at HilltopAds.
We’re seeing a clear shift away from intrusive ads toward integrated, contextual, and personalized formats that feel natural in the user flow. AI-driven optimization is becoming standard, helping maximize revenue while protecting UX. And hybrid models: mixing in-app ads, subscriptions, and microtransactions, are increasingly the go-to strategy for long-term growth.
AI Optimizes Everything
These days, apps are using AI to show users ads they actually want to see. 88% of marketers use AI every day, and 69% of those use it as part of their core processes. This means that AI is now important for making money in a competitive market.
Apps now understand what each user is interested in and provide relevant offers at the appropriate moment rather than random banner ads. AI also handles a large number of complicated monetization choices that people take longer to complete.
Real-world examples show AI’s impact: HP Tronic’s website personalization led to a 136% rise in conversion rates, while Benefit Cosmetics experienced a 50% rise in click-through rates and a 40% increase in revenue in six months through AI email marketing.
If AI detects a customer losing interest in a free product, it may present them with a deal on paid features or offer them an advertisement for their preferred type of content. This offers an infinite number of ways to keep users interested and generate revenue without taking any time from the developers.
Ads That Feel Like App Features
New advertising formats fit into your app instead of disrupting your experience. Rewarded video ads are those where a user can make a choice to view a 30-second video in exchange for extra life, coins, or premium features. Native video ads, on the other hand, are fit for all app categories. Users love this format as they get something for their time.
Native ads mimic regular app content rather than obvious advertisements. They match your app’s design and feel natural to users. Ads that don’t scream ‘ad’ are famously successful.
Blockchain and Web3 Integration
Blockchain technology is making mobile app monetization faster, more cost-effective, and more transparent. Layer 2 scaling solutions such as Polygon and Optimism can help Web3 businesses. They enable greater transaction throughput and lower costs.
Apps can feature NFT marketplaces where users purchase unique digital items and skins for characters and other exclusive content. With the help of smart contracts, creators may automatically track clicks, conversions, and payouts without the help of affiliate networks. It leads to increased margins, speedier payments, and reduced friction.
Privacy Rules and Compliance Challenges
As privacy regulations become stricter, apps must ensure transparent and ethical data practices to retain user trust and revenue. The financial risks for non-compliance are steep. If you violate the CCPA, you could incur fines of up to $7,988 per violation.
Recent enforcement actions highlight the stakes. TikTok, the video-sharing app, was fined €530 million for GDPR violations. A Norwegian regulator hit a mobile app with a €6.5 million penalty for sharing user data without proper consent.
Apps must ask in a clear way for user’s permission to collect their data, especially for analytics, ad targeting, and profiling. The transparency of privacy policies shall help in decoding how data is actually collected, used, and shared while also informing the people about their rights.
New Platforms Create New Opportunities
More ways to monetize are emerging due to technologies like voice assistants, augmented reality, and smart TVs. Voice applications are capable of selling premium voice packs or ad-free experiences. AR apps sell virtual items that users can place in the real world.
Newer platforms tend to have lower competition and more active users. This makes them a valuable opportunity for early developers. The secret is adapting old monetization techniques to the new style of interaction and user behavior.
To Summarize
Mobile app monetization possibilities in 2025 can be beneficial for the developer if you know the needs of your user and use the right method. With the sizable mobile app revenue market having a valuation of $613 billion, there are various ways to earn via ads, in-app purchases, subscriptions, and hybrid models.
You need to select the most appropriate strategy to earn from your app depending on your app type and the user type you intend to reach. Many gaming apps have in-app purchases or rewarded ads, while the freemium model and subscriptions are chosen by productivity apps. Observe your competitors, learn how users generally interact with products similar to yours, and experiment in order to determine the best route to take for your app monetization strategy.
Look no further than HilltopAds — the ultimate platform for monetizing your traffic. Our self-serve system supports a variety of high-performing ad formats and gives you control over placement and targeting to match your audience perfectly. With CPM rates of up to $2.50 in premium GEOs, you can maximize your earnings with every impression.
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