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October 31, 2025
What is mobile app monetization?
7 popular mobile app monetization models
7 key monetization metrics to track
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SubscribeHaving a robust and comprehensive monetization strategy can make or break your mobile app. And with so many methods to choose from, publishers must strike the perfect balance between maximizing revenue potential and mitigating churn from overly-aggressive strategies.
Thanks to increasing smartphone usage1 around the world, the potential for mobile app monetization has also grown. With models such as in-app advertising (IAA) and in-app purchases (IAP) projected to generate a whopping $400B2 and $150B3 in 2025 revenue respectively, the mobile app industry remains a strong driver of growth and innovation in the tech landscape.
Dive into our comprehensive guide on mobile app monetization to learn everything you need to know about the most common app monetization types, key metrics for measuring success, and best practices for creating your own monetization strategies to increase app revenue.
*All figures listed in this article are in USD.
Mobile app monetization is the process of generating revenue from your mobile app and its users. There are many different monetization models, and publishers will often create a comprehensive strategy that incorporates several of them, ensuring that all users can be adequately motivated, and by extension, monetized.
Some of the most common mobile app monetization models that publishers tend to leverage include:
Combining a number of these models can further strengthen the foundation of your monetization strategy. The ones you choose, however, depend greatly on the structure of your app, how your users interact with it, and the app category you are part of.
Some app verticals prefer certain models – or combinations of models – over others. For example, mobile games tend to find success with IAPs and IAA that provide instant gratification in the way they reward users for their engagement, whereas streaming apps prioritize subscription-based monetization that delivers regular content on an ongoing basis.
🔎 Overview: In-app purchases are digital goods, services, or subscriptions that can be purchased in an app. IAPs can take many forms, such as in-app consumable items, exclusive access to new features or content, as well as in-app currency.
IAP is one of the more commonly used forms of in-app monetization due to its versatility, and high return on investment (ROI). In fact, approximately 50% of non-gaming and 79% of gaming apps4 use IAP, oftentimes in combination with other models.
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In addition to IAPs, publishers can also leverage direct-to-consumer (DTC) web shops. DTC shops are external marketplaces that live outside of the core app ecosystem, in which users can purchase real-world or digital goods directly from the app publisher.
DTC shops allow publishers to bypass the 30% cut that major app stores like the Apple App Store and Google Play Store take, meaning that publishers get to keep a much larger proportion of their earned sales.
👀 Related reading: The race to web: How direct-to-consumer web shops are transforming mobile game monetization
⭐ Check out our full IAP playbook for more details on the different types of in-app purchases, examples across app categories, and best practices for implementing an IAP strategy into your app.
🔎 Overview: IAA is a form of app monetization in which advertisements are placed directly in an app ecosystem. When a publisher wishes to display ads in their app, they will sell ad inventory through a supply-side platform (SSP), which advertisers can bid on and purchase through a demand-side platform (DSP). This transaction is generally done through an ad exchange, which functions as a digital marketplace for both ad sellers and buyers to make a deal.
In-app advertising has been a long-enduring and popular form of monetization since the early days of mobile apps. In fact, mobile app ad spend is projected to reach $390.04B6 by the end of 2025, accounting for nearly 56%7 of total digital ad spend worldwide.
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⭐ Check out our guide to IAA to learn more about the ins and outs of in-app advertising, from types of ads to revenue potential, and more.
🔎 Overview: Subscription models are a type of in-app purchase in which users pay a recurring fee to gain access to exclusive content, software, or features. Subscription payments commonly occur on a monthly or yearly basis, but some publishers might opt for weekly or 6-month renewal periods.
Many subscription services offer a free trial before purchasing, giving users a limited time to test out the benefits before deciding if they wish to proceed with a purchase. Much like with the subscriptions themselves, publishers can choose how long a free trial lasts (usually three to seven days).
Subscriptions have been growing in popularity, especially in app categories like streaming and fitness. In fact, around 35%8 of apps on the market today use subscriptions in their monetization strategies.
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⭐ For even more details on in-app subscriptions, such as the different types, pricing models, and top examples across categories, dive into our full comprehensive guide.
🔎 Overview: Offerwalls are a form of in-app rewarded advertising, where users engage with a digital marketplace of tasks set by third-party advertisers. When a user selects a given task, they will have a set amount of time to complete it in order to earn an in-app reward.
Tasks presented in an offerwall can range in complexity, from simple tasks like watching an ad, to more complex tasks like downloading and reaching a checkpoint in a new app. The rewards associated with each task are proportional in value to the effort required to complete the task, and can include incentives such as in-app currency, consumable items, or temporary access to premium features.
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⭐ Dive into our full publisher’s guide to offerwalls to learn about how this monetization method has evolved into a trusted, versatile, and lucrative way to monetize your mobile app.
🔎 Overview: Affiliate offer monetization is the process of promoting or advertising third-party apps, services, or products directly within your own app. The companies being advertised will pay commission to the publishers featuring them in their app for each successful referral obtained.
Affiliate offers have grown in recent years, with over 80%10 of brands using some form of them to drive sales and potential leads. These offers can be implemented across app categories, with mobile gaming, finance, fitness, and eCommerce apps often making use of them.
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The following payment methods are commonly used in affiliate monetization:
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🔎 Overview: A freemium app is a free-to-use app with additional paid features, such as IAP or premium offers. These apps may only be available with limited functionality for free users, with the full content or features readily available through a one-time purchase or ongoing subscription.
Freemium apps have proven popular in today’s mobile landscape, with around 90% of apps11 on the App Store and Google Play Store being free-to-use. This has marked a shift in the overall landscape, from the once dominant premium apps, to the now more popular freemium models.
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🔎 Overview: A premium app is an app that requires an upfront cost to download. This cost may be a single, one-time payment, or an ongoing subscription that gives users access to the full list of features, content, and benefits. Although it was once a more predominant form of app monetization, premium apps now only make up around 4.63%12 of total apps on the market, with categories like streaming and SaaS apps still frequently using these one-time payment or subscription monetization models.
Premium apps often target users who are seeking a more high-quality, polished experience compared to freemium apps that might cast a wider net by being free-to-use. Nonetheless, users are more than willing to invest in a premium app if the value delivered justifies the initial cost.
The price of premium apps can vary depending on a number of factors, such as:
According to Statista13, out of the roughly 58,000 paid apps on Android, the majority (64%) are priced at $2 or less. The next 31% are priced between $2–7 and the remaining 5% between $7–10 (or more).
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Ad mediation is an important part of mobile app monetization, as it empowers publishers to scale their IAA and maximize revenue potential. This is often achieved through mediation platforms that allow multiple ad networks to bid on a publisher’s inventory and purchase in-app ad space. These platforms usually equip publishers with a number of tools for support, data analysis, and performance tracking.
The following platforms are examples of some of the top mobile ad mediation platforms on the market:
🔎 Overview: LoyaltyPlay is a rising play-and-earn monetization solution created by Mistplay. With LoyaltyPlay, app publishers can integrate a mobile gaming rewards hub directly into their apps, deepening user engagement and increasing revenue through commission earned on mobile game installs.
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🔎 Overview: Applovin MAX is a mobile ad mediation platform that helps mobile publishers and developers increase their ad revenue by allowing multiple ad networks to bid on their in-app ad inventory in real time, broadening the reach and potential of your ads.
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🔎 Overview: Meta Audience Network is a platform that allows app publishers to extend the reach of their ad inventories to mobile apps that partner with Meta. Like many other ad mediation platforms, it enables multiple networks to bid on ad inventory and provides support, tracking, and reporting capabilities for app publishers.
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🔎 Overview: Unity LevelPlay is an ad mediation platform that provides publishers and developers with the tools needed to monetize their users through IAA, analyze ad campaign performance, and acquire high-value users.
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🔎 Overview: Google AdMob is one of the largest global ad mediation platforms, giving publishers and developers the power to fill ad requests for a number of different formats in their app. With a high-quality inventory of ads and partners, Google AdMob remains a staple in the mobile app monetization landscape.
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Tracking the implementation and ongoing progress of your monetization strategies is crucial, and there are many different metrics that mobile publishers incorporate to measure their app’s success. Take the following seven examples that are used across a multitude of monetization models.
1. Lifetime value (LTV): The average revenue a customer will generate over their lifetime using a given app or service
Formula: LTV = Average purchase size x Number of purchases x Lifetime period
Why it matters: LTV is a key metric for all forms of in-app monetization, as it gives publishers an idea of exactly how much they can afford to spend on UA while still remaining profitable.
2. Average revenue per daily active user (ARPDAU): The amount of revenue that a single active user will generate per day
Formula: ARPDAU = Total business revenue on X day / Total number of daily active users
Why it matters: ARPDAU is one of the most important metrics for telling publishers how much money they’re earning on average per user, per day. This information can then help identify revenue opportunities, optimize marketing efforts, and identify potential shortcomings.
3. Fill rate: The number of ad units that were served in your app out of the total number of ad requests that were sent to the server
Formula: Fill rate = (Total ad impressions / Total ad requests) x 100
Why it matters: This metric is crucial for tracking IAA revenue, as it gives publishers a clear idea of how many ads the ad network is showing to users. A higher fill rate indicates that more ads are being served to users, correlating to higher monetization potential.
4. Click-through rate (CTR): The rate at which users who see an ad click on it to follow through to the product or service
Formula: CTR = Total number of clicks / Total number of impressions
Why it matters: CTR is an important metric to track, especially for publishers who are paid by advertisers when a user takes a specific action on their ad (such as through IAA or offerwalls), as it directly impacts revenue, user engagement, and advertiser satisfaction.
5. Effective cost per mille (eCPM): The average cost paid by an advertiser per 1,000 ad impressions
Formula: eCPM = (Total ad revenue / Number of impressions) x 1,000
Why it matters: eCPM is a key metric for tracking any ad-based monetization – again, think of IAA or offerwalls. It allows mobile publishers to track revenue generated by ad interactions on their products.
6. Subscription conversion rate: The rate at which users who have the opportunity to subscribe convert to becoming paid subscribers
Formula: Subscription conversion rate = (Total number of new paid subscribers / Total number of users who had the chance to subscribe) x 100
Why it matters: Knowing how many of your users convert to becoming paid subscribers is necessary for measuring the success of your subscription service. It also provides insight on what’s going well and where your plans are potentially falling short.
7. Return on ad spend (ROAS): The amount of revenue earned for every dollar spent on advertising and UA, typically represented by a ratio
Formula: ROAS = Revenue from ad campaign / Cost of ad campaign
Why it matters: ROAS gives publishers an idea of how profitable their UA and ad campaign efforts are, which ensures more data-driven decisions when setting future budgets, allocating resources, and maximizing revenue potential.
Choosing the best monetization models for your app requires careful consideration. The first steps in building a solid monetization strategy involve identifying who your users are, what type of app you have, and how your users are expected to engage with it.
Developing the foundation of your monetization strategy lies in identifying who your users are. Look into their preferences and behaviors to help determine which models best suit their needs. This can be achieved by analyzing user data, which can give clear insights into the engagement style, spending habits, and overall engagement loop of your users.
By understanding how your users interact with your app, you can segment them into cohorts and link them to user personas, which are fictionalized representations of user archetypes. Having user personas enables you to personalize and target your monetization efforts toward the cohorts that will be most receptive to them. For example, members of a high-spending persona may be more open to subscriptions or other IAP offers, whereas casual non-spenders may respond better to ad-based forms of monetization, such as IAA or offerwalls.
Although most monetization models can be used across app verticals, some categories favor specific strategies.
Content streaming apps, for example, tend to operate primarily on a subscription plan, in which users get full access to a library of content (either with ads, or ad-free at higher tiers). This works well for streaming apps, since users can easily access new content that is regularly added without worrying about additional payments.
Mobile gaming, on the other hand, tends to primarily use IAP and IAA due to their versatility and ability to integrate well into games of any genre. And with both free and paid offers, publishers can monetize high-spending whales alongside users who will never make a single purchase in their lifetime.
Once you’ve identified who your users are, what is common in your app category, and how your users are likely to interact, you can begin building your monetization strategy. As discussed, finding a diverse balance of models is best practice across all categories, as this variety ensures that all your users (spending and non-spending alike) are adequately monetized and getting the most out of your app.
Equally important to keep in mind is that some users may be more or less receptive to overt monetization tactics. That’s why striking the right balance to prevent overly aggressive monetization – which can lead to churn – matters for the success and longevity of your app.
Monetization is a key process in the creation of any app, and building the right strategy is no easy feat. For publishers to reap the rewards of successful monetization, they must put their users first by giving them what they want, presenting opportunities for progression, and rewarding them for their time and spend.
Are you an app publisher looking to monetize your users with game-based offers? Or perhaps you’re a mobile game publisher, wanting to harness the power of play-and-earn in your games? Then check out our portfolio of game-based monetization solutions and partner with us to drive retention, foster loyalty, and boost user LTV in your app.
For app publishers:
For mobile game publishers:
Discover how publishers like Ovivo increased player LTV by 3.5% with the help of Mistplay’s AI-driven campaigns, and contact us today to unlock the true power of player loyalty.
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