Which monetization model is best suited for your app?

At KISS Software, we help startups and large companies turn ideas into stable income. In this article, together with our expert Yevhen Kasyanenko, we share our experience and proven approaches on how to make money from a mobile app without losing loyalty.

Why is app monetization more than just a way to make money?

App monetization is a very important stage in the whole process. It determines whether you will be able to:

• Finance growth. Revenue pays for servers, marketing, and new features. Without cash flow, the product quickly loses its relevance.
• Retain your audience. Users are more likely to return if the internal economy offers bonuses, discounts, and personalized offers.
• Create a competitive advantage. Advertising and ASO optimization require a budget. The sooner it appears, the harder it is for competitors to catch up with you.
• Scale up. A stable cash flow facilitates negotiations with investors and accelerates entry into new markets.

In other words, monetization is a technology that keeps the project in shape, not just a counter at the end of the month.

“If the revenue model is added as an afterthought, the app will fall apart at the seams. First, we check how we are going to make money, and only then do we write the code,” emphasizes Yevhen Kasyanenko.

Basic models of mobile app monetization

Before turning downloads into revenue, it is important to understand who will use the app, what problem it solves, and in what niche it will compete. One model is ideal for a casual game with a million-strong audience, another for a niche B2B service, and a third for a media platform where stable monthly payments are valuable.

Next, we will look at the main ways to monetize apps.

In-app advertising – earning money on Android and iOS mobile apps without charging for downloads

If the app is free, in-app advertising helps you start earning money quickly.

Formats:

• Banner advertising. A simple format: static banners at the bottom or top of the screen. They are hardly intrusive, but they also generate limited income.
• Native advertising. Embedded in the content and “disguised” as part of the interface. The user does not feel intrusive, and the CTR is higher.
• Full-screen advertising (interstitial). Displayed at transitional moments, for example, between levels. This type of monetization works well in Android games, but requires caution: overuse can easily annoy the audience.
• Rewarded video ads. The user voluntarily watches a video for a bonus – an extra life, coins, or premium access. An effective way to monetize without negativity.
• Interactive advertising. Mini-games, surveys, and demos of other products. Increases engagement and often brings in more revenue than standard formats.

Pros:

• Simple and quick integration.
• Can be used in conjunction with other models (e.g., subscriptions or purchases).
• Does not require any investment from the user.

Cons:

• When overused, it greatly spoils the impression of the development.
• Revenue depends on traffic: without an active audience, it is difficult to earn money.
• Ad blockers can reduce effectiveness.

Advertising is good for monetizing games on Android or iOS, and also works well in utilities and content services—where free access is important. The main thing is to remember that it should not interfere with the user’s enjoyment of the product.

In-App Purchases—a flexible way to monetize Google Play and App Store apps

In-App Purchases (IAP) is when the app itself is free, and you only have to pay for additional features or useful functions. It is often found in games, educational and work products – anywhere where functionality can be developed or upgraded.

What you can sell:

• Access to additional content (levels, filters, tools).
• Hints, speed-ups, in-game currency.
• Skins, designs, decorations – visual improvements that do not affect the mechanics.
• Advertisement blocking.

Pros:

• The user only pays for what they really need, which means higher loyalty.
• Flexibility – you can configure different packages, prices, and combinations.
• Potentially high profitability – “whales” (players who spend a lot) can bring in the bulk of the profits.

Cons:

• Careful balancing is required – if almost nothing is available for free, it will cause irritation.
• Unclear mechanics for some users – UX optimization and “lead-up” to purchase will be required.

In-app purchases should be a well-thought-out part of the user journey. When everything is set up correctly, people pay not out of necessity, but because they see the value and want to get more.

Subscriptions – monetization of a mobile app with regular payments

Subscription is a reliable monetization model: the user regularly pays for access to extended functionality or content. It works especially well in projects where value increases over time.

What can be monetized through subscription:

• Educational platforms (access to courses, materials, tests).
• Media and news apps (ad-free reading, exclusive content).
• Services with constant updates (music, movies, podcasts, workouts, planners).

Pros:

• Predictable income. Subscriptions generate stable cash flow and allow you to build a long-term strategy.
• LTV growth. The longer the user stays, the more profit you make.
• Flexibility. You can offer different rates, trials, and special offers.

Cons:

• High entry threshold. Users must immediately see the value and be willing to pay.
• Need for constant updates. Subscriptions only work where there is regular content or support.

A successfully implemented subscription will not be perceived as a lock on the door to product features, but will give the feeling that you are paying for utility, comfort, and engagement. And the better that feeling is, the higher the conversion to paying users.

Freemium – a free app with paid features

Freemium is when an app works for free, but you have to pay for additional features or extended capabilities. This format is ideal for VPNs, cloud services, editors, and utilities: the user tries it out, evaluates it, and decides for themselves whether it’s worth paying for.

Pros:

• Maximum reach – people are more willing to download it because it’s free.
• There is a chance to “warm up” the audience and gradually convert them into paying customers.
• Allows you to build long-term relationships with users.

Cons:

• Many users stay on the free version.
• It is important to competently separate the base from the paid version – not to cut off the excess, but also not to give everything away for free.

The main thing in freemium is to convincingly show what is worth paying for, without alienating those who are not yet ready.

Paid product – earning money on a mobile application through one-time purchases

A paid app is simple: the user pays once when downloading and gets full access to all features. This format is suitable when regular content or internal economics are not required. It works especially well in niche solutions: professional tools, calculators, utilities, offline dictionaries, and specialized software.

Pros:

• Predictable income. Each installation immediately brings in money, which simplifies financial planning.
• Fair model. The user understands what they are paying for and gets all the functionality without restrictions or advertising.
• Ease of implementation. There is no need to build complex mechanics for subscriptions, in-game purchases, or rewards.

Cons:

• High competition. With so many free apps available, it is becoming increasingly difficult to sell something “up front.”
• Difficulty in promotion. Users must believe in the value of the app before installing it, which means you need strong marketing, high-quality reviews, and high brand recognition.
• No repeat monetization. Once a user has paid, there will be no additional sources of income unless you add new paid versions or upgrades.

Paid apps often work well in niches where the audience clearly understands what they are paying for and is ready to invest immediately, such as professional designers, lawyers, engineers, or craftsmen. The main condition for success is convincing value before purchase: high-quality screenshots, videos, ratings, and brand or expert recognition.

Affiliate programs and sponsorship – how to make money from an app without direct sales

If an app has a large active audience, brands are willing to pay for integration. This could be a branded set of stickers, a joint challenge, or a special section of the catalog.

Pros:

• Income without direct sales. The user doesn’t buy anything, but you still earn money.
• Image and trust. Collaboration with well-known companies raises the status of the development.
• Flexibility of formats. Banners, special projects, promotions – it all depends on the audience and creativity.

Cons:

• You need a large base. Without reach and engagement, partners will not come.
• Not suitable for everyone. Niche markets and “serious” topics are more difficult to monetize through brands.
• Dependence on external factors. Partners’ budgets and interests are unstable.

Partnership is a way to monetize attention without overloading the product itself.

Hybrid model – mixed methods of monetizing mobile applications

A hybrid model is when monetization comes from several sources at once: advertising, subscriptions, purchases. One user watches ads, another pays for premium features, and a third buys a one-time feature. Everyone chooses what they want, and you earn money from all of it.

Pros:

• Revenue diversification. If one revenue channel drops, another one works.
• Flexibility. You can tailor your strategy to the behavior and preferences of your audience.
• Maximum coverage. The model covers both those who pay and those who are not ready to pay directly.

Cons:

• Complexity of setup. A well-thought-out UX is required for everything to work harmoniously.
• Dependence on data. Without analytics, it is difficult to understand what brings in money and what gets in the way.
• Risk of overload. If you overdo it with formats, you can confuse or annoy users.

A hybrid model for monetizing a mobile app on Android or iOS is suitable for those who are willing to invest in analytics and testing. It’s not about a “quick launch,” but about a well-thought-out strategy in which each element of monetization works to the benefit of both you and the user.

App monetization mistakes that can cost you profits

App monetization affects not only revenue but also user attitudes. Mistakes here quickly hit your rating and lead to audience churn. Here are the key mistakes to avoid:

• Overly aggressive advertising. Intrusive banners, pop-ups, and videos “every two clicks” are annoying and scare people away. It is especially important to find a balance in games and free services, otherwise users will simply go to your competitors.
• Lack of analytics. Without data, you don’t know what really works. What features are in demand? What are people willing to pay for? Where do users “stumble”? Without answers to these questions, monetization becomes a game of blind man’s bluff.
• Ignoring testing. The same model can work differently for different audiences. Without A/B testing and experimentation, it’s easy to miss out on profits. Test scenarios, prices, formats, and adjust based on real numbers.
• Payment problems. Even if a user is ready to buy, they won’t do so if the payment doesn’t go through. Complex forms, errors, or the lack of popular payment methods drastically reduce conversion rates. Everything should work quickly and without unnecessary steps.
• Unsuitable model. A mass product with a subscription instead of freemium? A narrow B2B service with advertising? The wrong choice of model scares away the audience. Monetization must meet the expectations, habits, and capabilities of your users.

“Monetization is not just a checkbox on a checklist, but a real process. You need to monitor, test, and adapt. The better you know your audience, the more your app will earn,” emphasizes Evgeny Kasyanenko.

How to choose the right model to monetize your app?

The monetization model can be considered the foundation of the entire strategy. A mistake in choosing it can cost you your audience and revenue. To avoid this, it is worth answering a few important questions:

• What are you offering? If it is unique content, such as courses, analytics, or exclusive materials, then it makes the most sense to build monetization on a subscription basis. It provides a stable income and works well in educational, news, and entertainment services.
• What is your audience? Mass products with high traffic earn well from advertising. The main thing is not to overdo it. Use native formats and rewarded video ads so that monetization does not interfere with the user experience.
• Can you sell something inside? In games and products with progression, in-app purchases work great: levels, boosters, currencies, skins. Users pay for convenience or advantages, and they do so voluntarily.
• Is freemium a good fit? If the app is useful and has a clear core that can be offered for free, with “plus” features available for purchase, the freemium model will provide a good balance of reach and revenue. It is especially effective for utilities, editors, and cloud services.
• What are your competitors doing? Study similar products: how they make money, what mistakes they made, what works best for them. This will save you time and help you choose a working strategy.
• Are you ready for growth? Monetization must be scalable. If the model has hit a ceiling, add something new: a hybrid, personalized offers, or more payment methods.

Why should you entrust the monetization of your mobile app to professionals?

Monetization is not just about one button. Everything is important here: payment convenience, advertising format, audience growth. Even a good app can “flop” due to incorrect monetization:

• too much advertising – and people leave;
• subscription doesn’t work – and no one signs up for it;
• payment is complicated – and users simply abandon the purchase.

To prevent this from happening, it’s best to bring in those who do this on a regular basis right away.

What the KISS team does:

• We select the optimal model. We study the niche, audience behavior, and business goals, and choose a strategy that will actually work.
• We integrate payment systems. We set everything up so that the user can pay with just a couple of clicks.
• We set up advertising wisely. We optimize formats to make money without interfering with the user experience.
• We test constantly. A/B experiments, funnel analysis, behavioral metrics — all of this helps us adapt monetization to real-world scenarios.

Smart monetization isn’t about “making a quick buck,” it’s about “making a steady income.” At KISS, we help apps grow without losing user loyalty. Want to earn money with confidence? Let’s do it together.

Conclusion

Proper monetization is a balance between the interests of the developer and the patience of the user. Advertising provides quick cash flow, subscriptions provide predictable income, in-app purchases provide room for upsells, and hybrid models combine the best of both worlds. But any model requires analytics and testing.

If you want to know how to monetize your apps without losing your audience, let KISS Software know. We will analyze key metrics, select a strategy, implement it, and increase your revenue. Fill out the form for a free consultation right now and get a personalized analysis of your product from our experts.