A young woman pictured at home in her living room uses her smartphone.
The possibilities for ensuring a steady income stream for your app include a one-time purchase, in-app advertising, and affiliate marketing. — Getty Images/Milko

Creating a functional, well-designed app is only half the battle — now you have to figure out how the app will make money. Here are the seven best app monetization strategies for small businesses.

Charge a subscription fee

One way to monetize your app is by offering it via a monthly or annual subscription. Users can download the app for free for a period of time (usually seven to 14 days), but once the trial period is up, they have to pay to continue using the app.

Subscriptions can be a predictable source of revenue for businesses. But you must ensure your app offers high-quality content to justify this revenue model. If users don’t see your app as valuable enough, they won’t pay the monthly or yearly fee.

Paid apps

Another option is to make your app available to new users for a one-time fee. For example, someone might pay $4.99 once to download your app and then receive lifetime access to the content.

However, charging users upfront for an app can be difficult when roughly 97% of apps in the Google Play Store are free. And you’ll have to determine the right price for your app to ensure it’s enticing for users while still being profitable for your business.

[Read more: How to Monetize a Blog]

Freemium business model

If you choose a freemium business model, users won’t have to pay anything to download your app. Then you can offer a separate version of your app with more advanced features that users can pay to use.

The freemium model removes the financial barrier for users since anyone can access the app. Once they’ve seen what the app can do for them, they may pay to upgrade.

In-app purchases are a popular monetization strategy, with 34% of small businesses charging in-app fees.

In-app advertising

You can allow your app to display advertisements through different formats to earn money. There are several different ad formats you can choose from:

  • Banner ads: Banner ads usually appear as a banner at the top or bottom of the screen. They are effective without interrupting the user experience.
  • Video ads: Interstitial video ads are commonly used in mobile games and tend to create better impressions and conversions. However, many app users find them annoying since it breaks their engagement with the app.
  • Native ads: Native ads blend seamlessly into the content of the app and tend to be the least intrusive. These ads often feel like extensions of the app’s content.

[Read more: Understanding YouTube Ads and How to Monetize Content]

In-app purchases

Another way to monetize your app is by offering in-app purchases. It’s a popular monetization strategy, with 34% of small businesses charging in-app fees.

Users download the app for free, and once they begin using it, they have the option to make purchases to upgrade the app experience. In-app purchases are frequently used in mobile games — someone can download and play the game for free with the option to pay for additional gated features.


Another option is to partner with brands that will pay to promote their products or services within your app. You’ll negotiate a sponsorship deal in exchange for promoting that company to your audience. The amount you can earn from sponsorship deals will vary depending on the size of your audience and how engaged they are.

[Read more: How to Monetize a Podcast]

Affiliate marketing

If you choose affiliate marketing, you’ll promote products and services within your app and receive a commission on any sales that are made. Affiliate marketing is a strategy frequently implemented by bloggers and website owners.

You’ll start by signing up as an affiliate for companies selling products or services you think your audience could benefit from. From there, you add your affiliate links within the app. Affiliate marketing can often be effective and doesn’t come with the same negative connotations as paid ads.

CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.

CO—is committed to helping you start, run and grow your small business. Learn more about the benefits of small business membership in the U.S. Chamber of Commerce, here.

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