How to Make a Mobile App That Earns Real Money

The mobile app industry is skyrocketing, with global revenue expected to surpass $585.70 billion by 2025. Apps like Instagram, Temu and TikTok have captured the world’s attention, amassing millions of downloads and generating immense profits. But have you ever wondered what makes these apps so successful – not just in gaining users but in earning revenue?

If you’re looking to build and monetize a mobile app, you’re in the right place. Whether you’re considering in-app ads, subscription models or other monetization strategies, this guide will help you how to make money from mobile apps. 

Understanding app monetization

App monetization is the process of turning your app into a revenue-generating tool. Whether through ads, subscriptions or in-app purchases, understanding how to effectively monetize ensures sustainable growth for your app. Below, we'll explore the basics of what app monetization is and the key reasons why you should monetize your app.

What is app monetization?

App monetization is the strategy of earning revenue from a mobile application. It involves using various methods, such as in-app purchases, subscriptions, advertisements and premium features, to generate income while providing value to users.

Contrary to common myths, app monetization isn't limited to ads alone. Many believe that ads are the only way to make apps profitable, but successful monetization often combines different strategies suited to the app's audience and purpose.

Why monetize your free app?

Monetizing a free app allows you to maintain accessibility while unlocking significant revenue potential. With the right approach, even free apps can drive profitability without alienating users. Let’s look at some benefits of monetizing a free app. 

1. Reach a wider audience

Free apps naturally attract more users, offering access to a larger audience. For example, social media platforms with billions of users do great by offering free access while monetizing through ads, partnerships, or premium features.

2. Flexible revenue streams

Free apps provide room to introduce premium features, subscriptions or in-app purchases, offering flexible ways to earn revenue while catering to a broad user base.

3. Increased user retention

Users are more likely to stay engaged when they’re not pressured into paying upfront. This retention can lead to higher long-term profits through subtle monetization strategies.

4. Scalability

Free apps grow their user base faster than paid apps. This rapid scaling opens opportunities for ad placements, affiliate partnerships and other monetization avenues.

5. Adaptability

With free apps, you can experiment with different app monetization methods, like varying ad placements or membership tiers, without alienating your audience. This adaptability lets you find the perfect balance between profitability and user satisfaction.

Choosing the right app business model

Selecting the ideal business model for your app is a critical decision that directly impacts its revenue potential and user experience. Below is an overview of popular app revenue models to help you figure out how to generate revenue from apps according to your goals. 

1. App freemium model

Offer basic features for free while charging users for advanced or premium features. This model allows you to attract a broad audience while monetizing through optional upgrades.

2. Paid apps

Charge users an upfront fee to download the app. While this model ensures immediate revenue, it typically requires high perceived value to convince users to pay upfront.

3. In-app purchases

Generate revenue by selling virtual goods, features, or upgrades directly within the app. This model works well for games, e-commerce apps and tools offering customizations or add-ons.

4. In-app advertising

Monetize by displaying ads to users, earning revenue from impressions or clicks. This approach works best for mobile apps with high user engagement and large audiences.

5. App subscription model

Create recurring app revenue streams by charging users a monthly or annual fee for continued access to content or services. Ideal for apps offering ongoing value, such as fitness, productivity or entertainment platforms.

6. App gamification and rewards

Incorporate engaging experiences like challenges, points, or rewards to keep users invested and willing to spend money. This approach is particularly effective for gaming apps and loyalty programs.

7. Hybrid models

Combine multiple strategies such as offering a freemium app with in-app purchases and subscription options to diversify revenue streams and appeal to different user segments.

Each model comes with unique strengths and challenges, so consider your app's purpose, target audience and market dynamics when making your choice.

Choosing the right mobile app monetization method is crucial for balancing user satisfaction and revenue generation. Below is an in-depth look at key approaches to help you optimize your app's earning potential.

App monetization methods

Choosing the right monetization method is crucial for balancing user satisfaction and revenue generation. Below is an in-depth look at key approaches to help you optimize your app's earning potential.

1. In-app advertising

Integrating ads into your app is a popular and effective way to generate revenue without charging users directly.

Types of in-app ads

• Banner ads → Small, static ads displayed at the top or bottom of the screen.

• Interstitial ads → Full-screen ads that appear at natural transition points, such as between levels in a game.

• Rewarded ads → Ads that offer users incentives like extra lives or bonuses in exchange for watching.

In-app ads best practices

• Use non-intrusive placements to avoid disrupting the user experience.

• Match ad content to your target audience for better engagement and click-through rates.

2. In-app purchases

Selling items directly within the app is a lucrative way to monetize, especially for games and lifestyle apps.

Consumable vs. non-consumable items

• Consumable → Items that can be used up, such as in-game currency or health points.

• Non-consumable → Permanent purchases like ad removals or feature unlocks.

Examples of in-app purchases success

Popular games often sell power-ups, skins or tools to encourage players to spend while enhancing their experience.

3. Subscriptions

Subscriptions offer recurring income by providing ongoing access to exclusive features, content or services.

Advantages of subscription-based apps

• Creates a predictable revenue stream.

• Encourages long-term user engagement and loyalty.

Examples of subscription tools and platforms

Platforms like Stripe, RevenueCat and PayPal simplify subscription management and payment processing.

4. Paid apps

Charging users an upfront fee works best for apps with unique value or niche appeal.

How to justify the cost

• Offer a clear value proposition, such as premium features or ad-free experiences.

• Use strong user reviews and testimonials to build trust.

Examples of high-earning paid apps

Apps like “Procreate” (design) and “Pocket Casts” (podcasting) are profitable apps catering to highly targeted user needs.

Emerging trends in monetization

As user preferences evolve, new monetization strategies are gaining traction.

1. Gamification elements

Adding challenges, achievements and points keeps users engaged and willing to spend.

2. Reward-based ads

Ads that provide tangible rewards, like discounts or app credits, increase user interaction and satisfaction.

3. Subscription bundles and partnerships

Offering bundled subscriptions or collaborating with other apps/services to provide added value enhances user retention and maximizes revenue.

By understanding and implementing these methods, you can craft a monetization strategy that aligns with your app’s purpose and audience.

How to build an app designed for profitability

Building an app that stands out in today’s competitive market requires more than just an innovative idea - it demands strategic planning, execution and a focus on profitability at every stage. Here’s a step-by-step guide to ensure your app isn’t just functional but also financially rewarding.

1. Market research and validation

Before writing a single line of code, validate your app idea. Identifying your target audience and their needs is critical to ensuring your app has a paying market.

How to do it

• Conduct surveys and interviews to pinpoint user pain points.

• Analyze competitors to see what works and what doesn’t.

• Use tools like Google Trends, Statista and App Annie to assess demand for similar apps.

Why it matters for profitability

A validated idea reduces the risk of investing in a product that won’t sell, ensuring your app resonates with an audience willing to pay for it.

2. UI/UX design

A good user experience is the cornerstone of a profitable app. If users struggle to navigate your app or encounter friction, they’re unlikely to stick around or spend money.

Best practices

• Prioritize simplicity and clarity in your design to minimize confusion.

• Use intuitive navigation, fast loading times, and visually appealing elements.

• Conduct usability testing with tools like Figma, Hotjar or UserTesting to refine the user experience.

Why it matters for profitability

A well-designed app boosts retention rates and user satisfaction, increasing the likelihood of in-app purchases, subscriptions, or ad engagement.

3. Development best practices

Your app's technical foundation is crucial for long-term profitability. Building an app that performs efficiently and scales as demand grows prevents costly errors down the road.

How to do it

• Choose the right platform based on your audience - iOS for higher-paying users or Android for broader reach.

• Build a scalable backend using cloud-based solutions like AWS or Firebase.

• Incorporate analytics tools to track user behavior and app performance.

Why it matters for profitability

Efficient development minimizes maintenance costs, while scalability ensures your app can handle growth without disruptions that could drive users away.

4. Pre-launch planning

Success begins before your app even hits the market. A strategic pre-launch phase ensures your app gains visibility and builds excitement.

Key strategies

• Create a landing page to collect user emails and build anticipation.

• Use App Store Optimization (ASO) to maximize visibility on app stores.

• Partner with influencers or run targeted ads to generate buzz.

• Conduct beta testing to identify and fix issues before launch.

Why it matters for profitability

A strong pre-launch campaign builds momentum, ensuring a solid user base from day one. Early adopters are key to generating revenue and gathering feedback for improvements.

Marketing and growth strategies for app revenue

Successfully monetizing your app requires more than just a great product, it needs effective marketing strategies that drive visibility, engagement and revenue. Here’s how to accelerate your app’s growth and revenue potential. 

1. Pre-launch marketing

Building awareness before your app’s release is crucial for early success. Engage your target audience through social media platforms like Instagram and TikTok, sharing teasers, sneak peeks and behind-the-scenes content. Collaborating with influencers who align with your app’s niche can help amplify your reach. 

Additionally, consider offering early access campaigns to generate buzz and gather initial feedback. Implement a referral program to encourage early users to invite their network, driving further interest.

2. Post-launch growth

Once your app is live, focus on driving user acquisition and boosting engagement. Use targeted ads and partnerships to acquire new users, making use of platforms like Facebook Ads or Google Ads. 

Retargeting campaigns can help bring back users who downloaded but didn’t engage. Push notifications are a great tool for keeping users informed about updates, offers or new features, ensuring they stay engaged and continue to interact with your app.

3. App store optimization

Optimizing your app’s visibility in app stores is essential for organic growth. Make sure your app’s title and description include high-ranking keywords like "profitable apps" or "ways to make money from apps" to boost searchability. 

High-quality screenshots and videos that demonstrate your app’s features can further entice potential users. Encourage positive reviews and ratings, as these social proofs help elevate your app's credibility and rankings.

Common mistakes to avoid in monetization

Monetizing your app effectively requires careful planning and execution. To maximize revenue without alienating users, it’s crucial to steer clear of these common pitfalls. 

1. Overloading with ads and frustrating users

Bombarding users with excessive ads can quickly sour their experience. When ads overshadow the app’s core functionality, users are more likely to churn. Instead, strike a balance by integrating non-intrusive ad formats like native ads or rewarded video ads that enhance rather than disrupt the experience

2. Ignoring user feedback about pricing

While not all feedback warrants action, repeated concerns about pricing should not be ignored. When multiple users flag pricing issues, it’s a sign that adjustments may be necessary. To avoid this you can analyze recurring feedback, conduct pricing experiments and justify your pricing by highlighting the app's value proposition.

3. Failing to update and maintain the app

An outdated app with unresolved bugs and performance issues frustrates users, driving them to uninstall and leave negative reviews. Instead you should regularly update your app to fix bugs, improve performance, and introduce new features. A well-maintained app keeps users engaged and loyal.

4. Not adjusting monetization strategies

Clinging to a single monetization strategy despite poor results can hinder your app's profitability. Trends and user preferences evolve, and your strategy must evolve with them. Focus on monitoring industry trends and user behavior. Experiment with different monetization methods, such as subscriptions, freemium models, or in-app purchases, and pivot as needed.

Once a user gets disappointed there is very little to low chance he or she will download the app again and become a user. According to statistics, 90% of users have ceased using an app due to poor performance. Additionally, 88% of online consumers are less likely to return to a site after a bad experience. 

Real-life examples of profitable apps

Many successful apps have implemented various revenue models that cater to different user needs and preferences.

a. Freemium model

Candy Crush remains a prime example of the freemium model, offering free gameplay while allowing users to make in-app purchases for things like extra lives, boosters and level skips. This model has proven highly profitable, as users are drawn in by the free experience but encouraged to spend for enhancements.

b. Subscription model

Headspace thrives on a subscription model, providing users with access to premium guided meditations, sleep aids and mindfulness programs. Offering monthly or annual subscription plans, it taps into a growing demand for mental wellness and meditation, generating steady, recurring revenue.

c. Hybrid model

Duolingo stands out by using a combination of ad revenue, in-app purchases and subscriptions. By gamifying language learning, Duolingo not only keeps users engaged but also offers multiple avenues for monetization, making it one of the most successful educational apps today.

Conclusion and next steps

There are a lot of ways you can monetize your application. Nowadays the world has progressed quite a lot and there are various ways through which you can easily earn money. 

FAQs

1. How much money do apps make per download?  It depends on the app. You can have any of the various models to earn money, get more users and also earn money per every download. It all depends on how you structure it.

2. What app makes the most money? There is no right answer, but as of now social media apps are the ones turning in the most profit.

3. Are apps profitable? Yes, apps are profitable considering that you have chosen the right business model that fits perfectly.

4. How do apps make money without ads? There are various different models through which apps can make money like, freemium model, paid apps, in-app purchases, in-app advertising, subscription model, app gamification and rewards, as well as hybrid models.