How Do App Developers Make Money

How Do App Developers Make Money?

3 minutes, 28 seconds Read

In a world driven by mobile technology, apps have become an integral part of our daily lives. From productivity tools to entertainment and beyond, app developers have found innovative ways to cater to users’ needs. However, while creating a successful app requires skill and creativity, understanding how to monetize it effectively is equally crucial. 

In this blog post, we’ll explore the various strategies app developers employ to generate revenue and sustain their endeavors. 

Ways App Developers Are Earning Money

1. In-App Advertising

One of the most common ways app developers make money is through in-app advertising. This involves displaying ads to users while they interact with the app. There are different types of in-app ads, including banner ads, interstitial ads, and native ads. Developers earn revenue either through impressions (views) or clicks on these ads. Even B2B marketing goes perfectly with in-app advertising. 

According to App Annie, in-app advertising is expected to generate $201 billion in revenue by 2021.

2. Freemium Model

The freemium model offers a basic version of the app for free, while more advanced features or premium content are available through in-app purchases. This approach allows users to experience the app’s core functionalities before deciding whether to invest in additional features.

Sensor Tower reported that global consumer spending on app stores reached $143 billion in 2020, with the freemium model being a significant contributor.

3. In-app purchases

In-app purchases involve users buying virtual goods or premium content directly within the app. This model is commonly seen in gaming apps, where players can purchase items, power-ups, or currency to enhance their gaming experience. Even the developers linked with make sure to use in-app purchases for effective returns. 

In a study by Statista, in-app purchases accounted for 49.6% of global mobile app revenues in 2020.

4. Subscription Model

The subscription model offers users access to the app’s features or content for a recurring fee. This model is prevalent in news, entertainment, and productivity apps, providing users with continuous value over time.

Sensor Tower reported that global subscription app revenue exceeded $13 billion in 2020, highlighting the popularity of this monetization strategy.

5. Selling Data or Insights

Some apps collect user data and then sell anonymized insights to third parties for market research or analysis purposes. This approach requires a transparent privacy policy and user consent.

A study by Deloitte found that 74% of consumers are concerned about their data privacy when using mobile apps.

6. Sponsorships and Partnerships

Apps can collaborate with brands or businesses to promote their products or services within the app. This could involve sponsored content, special offers, or co-branded experiences.

According to a study by Mobile Marketer, 69% of marketers believe influencer marketing is effective in reaching their target audience.

7. Crowdfunding

Some app developers turn to crowdfunding platforms like Kickstarter or Indiegogo to raise funds for App Development. In return, backers often receive early access or special features within the app.

In 2020, Kickstarter’s Games category alone raised over $23 million for app and game development projects.

8. Affiliate Marketing

Affiliate marketing involves promoting products or services within the app and earning a commission for each sale generated through the app’s referral links.

The affiliate marketing industry is projected to reach $8.2 billion by 2022, according to a study by Statista.

9. App Sponsorships and Brand Partnerships

Collaborating with brands for sponsorships and partnerships can be a lucrative way to monetize your app. Brands are often eager to reach your app’s user base, especially if it aligns with their target audience. This can involve sponsored content, in-app advertisements, or even creating custom branded experiences within your app.

A survey by Mobile Marketer found that 65% of marketers believe that influencer marketing helps increase brand visibility and engagement.


Creating a successful app is only the first step. App developers need to employ effective monetization strategies to ensure the sustainability of their endeavors. From in-app advertising and the freemium model to in-app purchases, subscriptions, and data sales, there’s a plethora of options available. The key lies in understanding your target audience, providing value, and choosing the monetization model that aligns with your app’s purpose and user base. As the app ecosystem continues to evolve, mastering these revenue streams becomes essential for app developers looking to thrive in the competitive digital landscape.

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