Over the past decade, mobile apps have transitioned from a convenience to a necessity, deeply woven into our everyday lives. Today, mobile devices are indispensable tools for communication, entertainment, work, shopping, and more. In 2022, the global number of unique smartphone users surpassed 5 billion, and this figure is expected to grow beyond 6 billion by 2028.
The economic potential tied to mobile app engagement is equally staggering. User spending on mobile apps is projected to increase by 50% compared to 2022, fueled by greater reliance on apps across sectors like entertainment, retail, finance, and education. Furthermore, time spent in apps hit a record 5.1 trillion hours globally in 2024—a 6% year-on-year increase, with users spending an average of 4-5 hours per day on their mobile devices, signaling a highly engaged audience ripe for monetization opportunities.
What is mobile app monetization?
At its core, mobile app monetization is about converting your app’s value—its user base, engagement, and experiences—into sustainable revenue. With the right strategy, monetization not only brings in income but also funds further development, enhances user experience, and supports long-term business growth.
However, monetizing a mobile app is not one-size-fits-all. It requires understanding your audience’s behavior, preferences, and willingness to pay, and selecting the methods that align best with your app’s nature and your users’ expectations.
Popular mobile app monetization strategies
1. In-app advertising (IAA)
In-app advertising (IAA) involves displaying ads within your app and earning revenue based on user interactions like impressions, clicks, or completed views. Given the surge in mobile app usage, IAA has become the backbone of app monetization across most app categories, from casual games to utility apps.
One major driver behind the dominance of IAA is the explosion in user engagement. The longer users stay in apps, the more ad inventory becomes available, creating a virtuous cycle of growth. Global spending on in-app advertising is projected to reach $390 billion by 2025, highlighting its critical importance in the digital economy.
AA has a variety of formats, each with distinct characteristics and functionality
- Banner Ads: These are typically rectangular image or text ads displayed at the top or bottom of the app screen.
- Interstitial Ads: These are full-screen advertisements that appear at natural transition points within the app (i.e., between game levels, after completing a task, or upon app launch or closing). They can display static images, videos, or interactive content.
- Rewarded Video Ads: These are opt-in video advertisements that users choose to watch in exchange for receiving an in-app reward, usually in the form of virtual currency, extra lives in a game, access to premium content, or removal of other ads for a period.
- Native Ads: Advertisements designed to seamlessly blend with the surrounding app content, matching its visual design, layout, and function. Examples include sponsored posts in social feeds or recommended articles in news apps. They are typically marked with labels like “Sponsored” or “Ad”.
When done right, IAA can unlock stable and scalable income streams without alienating your user base.
Also read: AnyMind for Publishers: Designing Infrastructure for Modern Media
2. In-app purchases (IAP)
In-app purchases (IAP) offer users the ability to buy digital goods, such as extra lives, cosmetics, or special features, within the app itself. IAP can be extremely lucrative, but typically depends on a smaller segment of users known as “whales” who account for most of the spending.
Example: Candy Crush Saga, which has maintained its global popularity for over a decade.
- The game had over 273 million monthly active users as of mid-2024.
- Its lifetime revenue exceeded $20 billion.
- Approximately 95% of its revenue
comes from in-app purchases alone.
The key to IAP success lies in offering immediate rewards and emotional satisfaction. Players feel a strong urge to continue progress or enhance their experience, making small but frequent purchases, often without noticing how they add up over time.
3. Hybrid monetization models
72% of mobile game developers now use hybrid strategies, which is a combination of IAA and IAP or subscriptions, to maximize overall revenue.
Popular mobile games like Call of Duty: Mobile effectively combine in-game purchases with advertising. Non-paying players are given an opt-in choice to watch rewarded video ads, which then are given chances to win items through lucky draws in-game. This not only monetizes users who might never spend otherwise but also nudges them closer to making future in-app purchases by giving them a taste of premium content. Users who engage with rewarded ads are
4.5x more likely to make an in-app purchase compared to those who don’t.
Hybrid models ensure that publishers generate revenue from every type of user, balancing user experience and business performance.
4. Subscriptions
Subscriptions are another powerful monetization model, offering users continuous access to content or services for a recurring fee. Subscriptions often come in two common forms:
Freemium Subscription: This model offers users basic access to the app at no cost, while advanced features, premium content, or an ad-free experience are unlocked through a paid subscription.
Example: Spotify exemplifies this approach. Users can enjoy music streaming for free with occasional ads, or upgrade to Spotify Premium for uninterrupted listening, offline downloads, and enhanced audio quality. While most freemium apps see visitor-to-freemium conversion rates range from 11.8% to 15.5%, and only 2.6% to 5.8% of those into paying subscribers, Spotify far exceeds the norm. An impressive 46% of its free users convert to premium. As of Q4 2024, the platform boasts 263 million premium subscribers. This strong conversion rate highlights the power of freemium models to attract a broad user base and gradually turn engaged users into loyal, paying customers through clear value delivery.
Premium Subscription: Access to content is entirely locked behind a paywall, and users must subscribe to use the app.
Example: Netflix operates exclusively on a paid subscription model. In 2024 alone, Netflix added nearly 19 million new subscribers, closing the year with over 300 million global subscribers. The success is driven by Netflix’s superior user experience, including enhanced viewing quality (4K, HDR, spatial audio), the convenience of multiple simultaneous streams and offline downloads, and an ad-free environment. Most importantly, its vast library of exclusive, high-quality content provides strong justification for users willing to pay more for premium entertainment and seamless household sharing.
In-app advertising dominates the mobile app ad market
While in-app purchases and subscriptions offer substantial value, in-app advertising remains the dominant revenue driver. Here’s why:
1. Massive advertiser demand: Advertisers are pouring huge budgets into mobile, recognizing the depth of engagement and the precision targeting available within apps compared to mobile web. Global mobile advertising spend reached $402 billion in 2024, far surpassing the $150 billion generated by IAPs and subscriptions combined.
2. Unmatched reach via the free model: With over 93% of Google Play apps and 95% of iOS apps offered for free, IAA enables publishers to earn from all users, including the large segment that may never make an IAP or subscribe.
3. Hybrid model synergy: IAA blends seamlessly into hybrid monetization strategies, maximizing revenue from non-payers while potentially boosting engagement that leads to IAPs. Hybrid approaches combining IAA and IAP/subscriptions often demonstrate superior overall financial performance and higher lifetime value (LTV).
4. Technological Empowerment: Modern advertising technology like mediation platforms, Supply-Side Platforms (SSPs) and programmatic exchanges, gives publishers control over inventory quality, pricing, targeting, and optimization, ensuring that IAA doesn’t compromise user experience.
Pro tip: Avoid these 3 mistakes when implementing in-app ads
1. Overloading ads and ignoring user experience (UX)
Over-monetization (i.e., showing too many ads, placing ads at bad moments, or using intrusive formats) damages the user experience. This leads to user frustration, poor app reviews, increased churn, and shortens your app’s lifetime value. Sacrificing long-term user retention for short-term ad revenue gains is a flawed strategy.
2. Neglecting ad format optimization and relevance
Relying solely on basic ad formats like static banner ads or serving irrelevant ads wastes monetization potential. Users become “ad blind,” ignoring the ads and associating your app with low-quality experiences.
3. “Set it and forget it” mentality
Ad networks and user behavior are constantly evolving. Without regular A/B testing, data analysis, and optimization of placements, waterfall setups, and frequency caps, your app’s performance and revenue will decline. Without analyzing key metrics (eCPM, fill rate, CTR, ARPDAU, viewability, impact on retention), publishers cannot make informed decisions to improve performance.
Prioritizing in-app advertising for sustainable growth with AnyMind Group
At AnyMind Group, we help publishers tap into the full power of IAA through:
1. Unified technology integration: Our AnyManager platform and the AnyManager SDK (Software Development Kit) lets publishers connect to many ad sources—including major mobile Demand-Side Platforms (DSPs), Supply-Side Platforms (SSPs), major ad networks and partners, and AnyMind’s own demand pools—through just one integration, instead of juggling multiple SDKs. This allows seamless management and optimization of ad inventory without complicating the app development process.
2. Mediation and Optimization: AnyMind helps publishers maximize ad revenue through advanced ad mediation, including the setup and optimization of waterfall and header bidding strategies. This includes adjusting price floors based on performance data and running A/B tests to find the most effective ad setups for boosting eCPMs (Effective Cost Per Thousand Impressions) and ARPDAU (Average Revenue Per Daily Active User).
3. Data-Driven Yet Privacy-First: AnyMind utilizes data analytics through the AnyManager platform to help publishers gain deeper insights into user behavior and optimize monetization. We also support privacy-first strategies by leveraging consent-based frameworks, first-party data, and privacy-safe methods like contextual targeting.
We’ve helped countless publishers across Asia achieve stronger monetization outcomes—not just in theory, but in real results. View our case studies to see how we’ve maximized eCPMs, improved ARPDAU, and built winning monetization strategies.
Let’s take your app revenue to the next level—starting today.
