6 Strategies to Monetize Your App (And When to Use Each)

So you’ve built a beautiful app, congratulations! But great design only goes so far. If you don’t have a strategy to monetize your app, it’s hard to make money. Even the most elegant apps are subject to financial failure without a successful business model.

The app market in 2025 is crowded, and investors are quicker than ever to ask: How will this product make money? For SaaS founders, especially non-technical founders, the key isn’t just building a great product and choosing a monetization model that aligns with your users, growth, and long-term vision.

In this guide, we’ll break down six of the most effective app monetization strategies, share when to use each, and highlight how to design a business model that sustains growth long after launch.

Adapting Mobile App Monetization Strategies in a Changing Marketplace

Over the past few years, the ratio of free vs. paid iOS apps has tilted heavily toward free downloads. As of May 2025, 95.41% of all iOS apps were free to install, while only 4.59% required payment. (Source: Statista)

Many companies consider these marketplace trends before development. They conduct comparative research designed to optimize monetization. Even post-launch, generating new revenue streams often provides a competitive advantage.

App Revenue Streams, Revenue Models, and Business Models

Understanding the marketplace allows you to identify possible streams of revenue. Consider a strategy that leverages your app’s functionality and target customers. Then, model how those various streams interact and establish a sustainable business model.

What is an App Revenue Stream?

A revenue stream is a particular means by which a company or individual generates revenue continuously. An app can have a single revenue stream, but some of the most successful businesses will have numerous revenue streams aligned with different ways of creating value. 

Combining Many Revenue Streams into a Revenue Model

A revenue model considers how multiple revenue streams interact and how a company manages its resources to sustain these monetization methods.  For example, you may attempt to optimize one revenue stream within an app to benefit the development of another. Or, based on the customer’s buying journey, different offerings may be released over time or bundled.

Establishing a Business Model for Your App

A business model is the vision for your app’s future growth. Strong business models incorporate an app’s revenue model and how those monetization systems interact with all the other assets, resources, and processes. It considers all factors, such as targeted traffic, customer acquisition, user retention, and monetization, to form a plan for financial sustainability and success.

Beware of the Zombie App

Apps without a clear monetization strategy often become “zombie apps.” No, they won’t eat your brains, but they will waste your time and money. These abandoned apps linger in the store with no updates, poor support, and broken features, eventually flagged by app stores as low-quality.

The antidote? Build a business model early. By understanding the marketplace, planning multiple revenue streams, and optimizing for growth, you give your app the chance to thrive long after launch.

6 Effective Strategies to Monetize Your App

You’ve done your homework: you understand your target audience, you know your competition, and you’ve developed a unique app concept. The puzzle pieces are starting to fall into place, and now you just need the financial component. These are the six most effective strategies you can use to monetize your app (and when to use each).

1 – Free Apps With In-App Ads

Free-to-download apps often rely on in-app ads as their primary revenue source. This model lowers the barrier to entry, making it easy to build a large audience quickly. Once traffic grows, ad placements can generate steady income, though if not balanced carefully, it comes at the cost of user experience.

Pros:

• Zero barrier to entry → larger user base
• Predictable revenue if traffic is high

Cons:

• Ads can clutter UX and frustrate users
• Works best only at scale

Best for: Social apps, games, or content apps with high daily use.

In-App Ads Can Clutter UX

In-app ads may disrupt the user experience. App design can feel clunky if an ad consumes a significant percentage of limited screen space, or full-screen ads that appear between actions might slow functionality. And some even, in the case of Reddit and Twitter ads, get ignored altogether.

When to Monetize Your App With Ads

Apps that capture a large audience are well-suited for in-app advertising. Social networks and mobile games are also big market segments because users tend to spend a lot of time in these spaces. If you choose to monetize with in-app advertising, consider optimizing for session duration so you can capitalize on more opportunities to offer ads to your audience.

2 – Freemium Apps

The freemium model is one of the most popular models in 2025. Users can access a basic version of your app for free, while advanced features remain behind a paywall. This approach gives people time to experience the value of your product before committing to pay, an especially effective way to onboard users who are cautious about new apps.

Pros:

• Let users “try before they buy”
• Great for complex tools or feature-rich apps

Cons:

• Requires testing to know which features convert
• Needs high traffic to balance free vs. paid

Best for: SaaS products, productivity apps, and mobile games.

When to Use Freemium?

Freemium works best when your app has multiple valuable features and enough traffic to test which ones convert behind a paywall. It’s especially effective in markets like mobile gaming, where users invest time upfront and are more likely to pay later to unlock premium content.

3 – Monetize Your App by Making People Pay to Download It

The simplest model is for users to pay once to download your app. While this approach has declined in popularity compared to free models, it can still be effective in niche markets. The key is offering enough unique value to justify the upfront cost, often through specialized tools or premium experiences.

Pros:

• Immediate revenue per user
• No ads, full functionality at install

Cons:

• Higher marketing costs (no trial period)
• Competes with free alternatives

Best for: Niche or utility apps with a loyal, targeted audience.

When to Use Paid Apps

Paid apps work best in niche markets where users are willing to pay upfront for a specific function. They require stronger marketing since there’s no free trial, but they can succeed when demand is high and the value is clear.

4 – In-App Purchases (IAPs)

IAPs allow users to buy virtual goods, premium features, or physical products inside the app. From power-ups in mobile games to premium dating features or e-commerce upsells, this model provides flexibility and allows you to align revenue with engagement. The challenge lies in setting price points and avoiding over-reliance on purchases that may frustrate users.

Pros:

• Flexible revenue stream
• Works across gaming, e-commerce, and services

Cons:

• Needs a thoughtful pricing strategy
• Can cause “pay-to-win” backlash in gaming

Best for: Games, dating apps, commerce apps.

For Dating Apps  

In-app purchases power features like boosted visibility or time-saving tools, demonstrating that users are willing to pay for convenience.

For Mobile Gaming

Players buy upgrades, power-ups, or advantages, but over-reliance can hurt user trust if the game feels “pay-to-win.”

When Should You Monetize Your App with in-App Purchases?

In-app purchases are a highly reliable revenue stream for monetizing almost any app. Success depends on smart pricing and enough user traffic.

5 – Subscriptions

Thanks to their recurring revenue potential, subscriptions are now the dominant app monetization model. Apps charge users monthly or annually to access premium services or content. The challenge is maintaining engagement; if your app doesn’t continue to provide clear value, users will churn.

Pros:

• Predictable recurring revenue
• Scales with user adoption

Cons:

• Content or value must stay fresh
• Churn risk if retention is weak

Best for: SaaS platforms, media/streaming apps, health & wellness apps.

The Smartest Subscription-Based Tactic: “The 14 Day Free-Trial”

Platforms like Netflix, Hulu, MAX, etc., hook users with a free trial and convert them into recurring subscribers.

This generates steady revenue, even from inactive users, but it only succeeds if ongoing content or value keeps people engaged.

When to use Subscriptions?

Subscription-based apps offer very appealing recurring revenue; however, this model requires sufficient resources to maintain value.

6 – Blended Models

Many of today’s most successful apps use blended models, combining multiple revenue streams. For example, an app may offer free access with ads, allow users to upgrade to an ad-free subscription, and also provide in-app purchases. This diversification helps stabilize revenue and reach different user types without locking into a single approach.

Pros:

• Diversifies revenue streams
• Captures both free and paying users

Cons:

• Complex to design and balance
• Risk of confusing users without clear tiers

Best for: Apps with broad audiences—Spotify remains the go-to example.

Spotify’s Successful Monetization Strategy: Blended to Perfection

Spotify combines free access with ads, optional subscriptions for an ad-free experience, and extra revenue through merchandise and ticket sales, showing how diverse streams work together. A blended model balances free and paid users, diversifies revenue, and creates multiple growth levers if one stream slows down.

When to Use Blended Models?

Blended models are best for apps with broad audiences. Pairing ads, subscriptions, and purchases can stabilize revenue and maximize reach. Tools like Adapty help test different paywalls, pricing, and monetization flows so you can refine your model based on real user data.

But First… Build an App Worth Paying For

Early (or pre) development is when most consider building revenue streams. You can most naturally implement multiple monetization channels into the design and functionality of your app, without having to backtrack. You won’t lose development progress or release significant updates that might interfere with existing UX. However, if you build a large and dedicated user base, you can always find ways to monetize it.

Designli’s Approach to Monetization

For non-technical founders, deciding how to monetize an app can feel like guesswork. That’s why we’ve built a process to give clarity before you commit to a strategy.

SolutionLab

In just a few weeks, we will create an interactive prototype and pair it with a revenue model plan. This will help you visualize how your app will look and how it can generate sustainable revenue from day one.

Hypothesis-Driven Development (HDD)

Instead of building features based on assumptions, HDD lets us test revenue models and feature ideas in small, measurable iterations. Before investing heavily, you’ll see what users respond to, whether freemium upgrades, subscriptions, or in-app purchases. This approach gives you a clear monetization roadmap aligned with your users and long-term business goals.

FAQs

How do I choose the right monetization strategy for my app?

Start with your business goals, audience behavior, and product type. Research, prototyping, and testing different revenue models (ads, subscriptions, freemium, or blended) will show which strategy aligns best.

What’s the most profitable way to monetize an app in 2025?

It depends on your audience and product type, but subscription models remain the most predictable and profitable for long-term growth. Many SaaS founders also layer in freemium or blended approaches to increase conversion and retention.

Should I use in-app ads or subscriptions?

Ads work best for apps with massive traffic, while subscriptions are stronger for SaaS and content-driven apps that deliver recurring value. For most founders, subscriptions provide steadier revenue.

As Always, Designli Is Here to Help.

Great design is only the start; long-term success comes from pairing a well-built app with the right monetization model. As a non-technical founder, you don’t need to have all the answers up front. You need a process that helps you validate assumptions, test revenue strategies, determine the best tech stack, and align your app’s growth with your business goals.

That’s where Designli comes in. For many founders, the journey starts with Impact Week, a focused process that reveals hidden risks, uncovers opportunities, and clarifies the next steps. Building on that foundation, SolutionLab transforms early ideas into interactive prototypes and revenue models, giving you the confidence to move forward before investing in full development.

 Ready to turn your app idea into a revenue-generating business? Schedule a consultation to meet your new team.

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