In an era where mobile apps dominate user behavior, having a monetization strategy is essential. Whether you’re building a utility tool, fitness app, marketplace, or a gaming platform, your app’s revenue model can define its sustainability. But here’s the catch: the “best” strategy depends entirely on your app type, user base, and value proposition.
At PPTS Solutions, we’ve helped businesses across industries design, build, and launch mobile apps that solve problems and generate meaningful revenue.
In this guide, we walk you through the most effective monetization strategies for mobile apps in 2025, when to use them, and how to avoid common pitfalls.
Why Monetization Strategy Matters in Mobile App Development?
Monetization should be one that should be planned at the initial stages. A well-structured strategy aligns your app’s user experience with its revenue goals. Neglecting this step often results in:
- Poor user retention due to intrusive ads
- Difficulty in scaling the product
- Missed opportunities to upsell or cross-sell features
A robust monetization plan is also a sign of strong business modeling, which enhances investor confidence and long-term viability.
If you’re considering app modernization to revive a legacy system or transform an underperforming application into a revenue-driving platform, a clear monetization strategy becomes even more critical.
One of our clients at PPTS was struggling to monetise their app, and we used all the strategies and found that the basic structure of the app wasn’t utilised by users, and was addressed at a later stage. We saw many users after that process, and their ad revenue was exceptional.
In the upcoming sections, we will first publish the best of the strategies for monetising your app, and for further clarification, we have explained each strategy.
1. In-App Advertising
Best for: Free-to-download apps with high daily active users (DAUs), such as gaming, news, and entertainment apps.
Advertising is one of the most widely adopted monetization models. It allows you to offer the app for free, drive massive downloads, and generate income through impressions and clicks. Ad formats include:
- Banner ads (least disruptive but often ignored)
- Interstitial ads (appear between content; best for pauses in gameplay)
- Rewarded ads (offer users in-app perks for viewing)
- Native ads (blend into app content for better UX)
Caution: Too many ads can lead to churn. It’s essential to balance frequency and format.
2. In-App Purchases (IAPs)
Best for: Gaming apps, productivity tools, customization platforms.
This model allows users to buy virtual goods, upgrades, or additional features within the app. It’s flexible, scalable, and works well with a freemium model.
Examples:
- Unlocking advanced features (e.g., filters in a photo editing app)
- Buying virtual currency (in gaming apps)
- Accessing one-time content (e.g., reports, templates)
Tips for Success:
- Clearly communicate value before prompting a purchase
- Limit friction by integrating seamless payment options
3. Subscription-Based Model
Best for: Apps offering ongoing value like fitness, learning, finance, productivity, and content streaming.
The subscription model provides recurring revenue and builds a predictable business structure. Options include:
- Monthly/yearly subscriptions
- Tiered access levels (e.g., Basic, Pro, Premium)
- Free trials to encourage onboarding
Benefits:
- Higher customer lifetime value (CLV)
- Encourages continuous improvement and content updates
Challenges: Requires consistent value delivery to reduce churn.
4. Freemium Model
Best for: SaaS-style apps, utility tools, social platforms.
Freemium models allow users to access basic features for free while locking premium capabilities behind a paywall. It helps build trust and lets users test the product before investing.
Best Practices:
- Ensure your free version delivers real value
- Create clear upgrade incentives (speed, features, support)
5. Sponsorships & Partnerships
Best for: Niche audience apps, influencer-driven platforms, local guide or lifestyle apps.
Rather than ads, some apps form direct sponsorship deals with brands that want access to a specific user demographic. This model works well when you have a defined and engaged audience.
Example: A meditation app partnering with a wellness brand for co-branded content.
6. Transaction Fees (Commission-Based)
Best for: Marketplaces, booking apps, delivery services, gig platforms.
Apps that facilitate transactions can take a small percentage of each completed sale or booking. Think of Uber, Airbnb, or food delivery services.
Key Considerations:
- Transparency in fees is crucial to retain users
- Ensure platform reliability and dispute resolution mechanisms
7. Selling Physical Products or Services
Best for: E-commerce, hybrid apps, retail brands.
Your mobile app can act as a direct channel for product sales. This approach is effective for brands that already have inventory and fulfillment infrastructure.
Example: A fashion app selling exclusive drops only through the mobile platform.
Added Value: Integrate loyalty programs or gamification to boost repeat purchases.
Choosing the Right Model: What PPTS Recommends
At PPTS Solutions, our approach to mobile app development and application modernization always starts with understanding your business goals, target audience, and app category. Whether you’re building from scratch or embarking on a legacy application modernization initiative, we don’t just build apps, we build revenue-generating platforms.
We help you:
- Identify the ideal monetization path based on user behavior and app lifecycle
- Integrate payment gateways, ad SDKs, and analytics tools seamlessly
- Prioritize user experience while optimizing for ROI
- Remain compliant with in-app purchase policies across Apple, Google, and other stores
