August 25, 2023

10 Ways You Can Make Money from Your App


So you’ve got a stellar idea for an app. You know your audience, what they need and what they want. And you’ve secured the investment needed to design and build your ingenious app. But unfortunately, the costs don’t end there.

Running an app costs money. Running the servers, paying for maintenance, analysing your user’s behaviours to enhance your app, it all adds up. And after all that investment that went into it, you’re going to want to get something out of that app.

So we’ve compiled a list of 10 ways apps can make money:

Paid Apps

An app is just like any other product, like a toaster or a jet ski. So the most obvious way to generate revenue from the app is just to sell it. On average, paid apps cost between £0.99 and £9.99, depending on the complexity or usefulness of the app.

Now getting someone to pay for an app is quite a tall order. In fact, according to Google, only 1 in 2 people have ever paid for an app. But if your app fulfils a clear market niche or has a well-established brand (or ideally both) you’ll find plenty of people willing to purchase. Games in particular is a genre of app where most people would be happy to spend a couple of pounds to try it out.

Not being able to get a feel of your app will be the biggest barrier to your potential users, especially if there are other competitor apps out there for free. But one way to compensate for this is to offer a free trial, so you can give your users a taste to tempt them to purchase.

The top paid apps are pretty much all games like Minecraft or Geometry Dash, but there are some non-gaming apps with a specific enough niche to draw in paying users, such as the Official DVSA Theory Test Kit app. 


  • Direct revenue from downloads
  • By purchasing the app, users are more likely to stick with it for longer
  • Paid apps are often in a category of their own in app stores, reducing the competition for higher ranking


  • High barrier for entry  (even if it’s only 99p)
  • Heavily dependent on user reviews -  too many negatives can sink the app, and if a user has paid for a bad app they’re much more likely to leave a negative review
  • Pretty incompatible with other monetisation methods as users will expect a full, ad-free experience if they paid
  • Both Apple and Google take a 30% fee of the app purchase transaction (However both Apple and Google will lower the fee to 15% if your earnings are under $1m - read more on Apple’s and Google’s service fees)

Freemium Apps

As of 2023, over 94% of the apps on the Apple store and over 96% of the apps on the Google Play store are free at the point of download. So obviously some people have figured out a way to make money from an app without charging upfront.

Freemium apps are free to download, use and enjoy, but have premium features that you can purchase within the app. These features enhance the way the app works and are designed to tempt free users into upgrading.

Examples of these premium features could be extra ‘super likes’ on a dating app or a more in-depth analysis of your workout routine on a fitness app. Dozens of top apps use this model, including; Spotify, YouTube and Duolingo. 

During the development of Freemium Apps, there is a temptation to hold back crucial functionality from the free version in order to pressure users to upgrade. But the best implementation of the freemium model delivers a solid and enjoyable free version of the app that gets users regularly opening the app and then offers substantial premium features to entice them. If a user has already gotten a lot of value out of the free version, the upsell to the premium version is much easier.


  • Low barrier to entry - no upfront payment means more people will download the app just to try it out
  • High volumes of free users will attract more users to the app
  • The freemium model is very compatible with other monetisation methods


  • If the free version is ‘good enough’ or the premium features don’t add enough value, your users may all just stick to the free version
  • If your users haven’t spent any money on the app, the chance of them continuing to use the app is reduced
  • Both Apple and Google take a 15-30% fee of all in-app purchases


If you want to take the paid model a step further, you can opt for the Paymium model, which charges users to download and offers premium features within the app. This is rare option apps take as it relies on users who were willing to pay multiple times during their use of the app, but some apps are able to pull this off. 

The Heads Up party game app has found enormous success despite being a paid app with additional premium features. However, Heads Up did have a bit of a head start as it came from the team behind Ellen Degeneres’ show.

If you believe your app is captivating enough (and if you have a multi-million-pound brand behind it) then the Paymium model can be a very lucrative option. But for such a high price point, high-quality design, engaging content and seamless functionality are critical.


  • Continuous revenue stream from both app purchases and premium features purchases
  • Stickiness is even greater than paid apps, as users may have invested a good chunk of money into the app


  • Very high barrier to both entry and continued use
  • If the initial paid version is ‘good enough’ or the premium features don’t add enough value, your users may all just stick to the base version
  • Heavily dependent on user reviews -  too many negatives can sink the app, and if a user has paid for a bad app they’re much more likely to leave a negative review
  • Pretty incompatible with other monetisation methods as users will expect a full, ad-free experience if they paid
  • Both Apple and Google take a 15-30% fee of both the original app purchase and all in-app purchases


Possibly the easiest and most common way to generate income from an app without charging your users. Ads offer a steady revenue stream and are relatively easy to set up and run. And there is a lot of flexibility in how you use them, allowing you to pick ads that work best in your app.

Banner Ads - Ads that sit at the top or bottom of the screen that are unobtrusive so as not to block the flow of the app, but which as a result have a low click-through rate

Native Ads - These ads sit within the app as if they were just another piece of content, like a sponsored post in your Instagram feed

Interstitial Ads - Full-page ads that are placed at key points in the app flow, usually after the completion of a task like after checkout on an e-commerce app or after you lose a game of Tetris

Reward Ads - Primarily used in game apps, this ad is optional but if the user chooses to watch it they are rewarded with some in-app credits, lives, or virtual goods.


  • Free for the user
  • Easy to set up and manage with only minimal running costs
  • An Ad Free version of the app can be sold as a premium feature


  • A lot of users find ads annoying and may be off put by them
  • As ad proliferation grows, fewer and fewer users are clicking on them 
  • Ads can often be low quality giving your app a cheaper feel than its design deserves
  • Some ads can interrupt the flow of an app, which can lead to a poorer user experience and drive users away

In-App Purchases

There’s a bit of overlap with the Freemium and Paymium models here, but In-App Purchases can be a very effective source of revenue for free and paid apps. 

In-App Purchases can range from new features that alter the way users interact with the app, down to much smaller changes such as a new colour scheme for the app. By far the most successful use of In-App purchases is by game publishers who sell bundles of in-game currency for a range of different prices going up to hundreds of pounds. Candy Crush Saga generated over $606 million in-app revenue during the first half of 2023, almost entirely from in-app purchases


  • A smart way to persuade free users to spend money on the app
  • In-App Purchases can often hold no real-world value so the cost of sale is zero


  • Poorly implemented In-App Purchases are one of the biggest reasons users leave negative reviews
  • Some parents may get stuck with a bill in the thousands if their kid gets onto your app on their parents' phone
  • Both Apple and Google take a 15-30% fee of all in-app purchases

Paid Subscriptions

Some apps can be considered more as an ongoing service, for which users will be willing to pay an ongoing subscription. Apps like these need to be feature and content rich in order to keep their users engaged and willing to continue payment.

However not all users are the same, and so quite often subscriptions are broken down into multiple levels at varying costs to accommodate a wide range of users. And a free trial subscription, or even a free subscription with limited access to features can be a great way to draw frugal users in.


  • Consistent and predictable revenue from your users
  • Opportunities to upsell users to higher subscription levels
  • Engaged user base


  • Content and features have to be updated regularly to justify ongoing payments
  • Users finding difficulty in cancelling subscriptions is a very common source of negative user reviews
  • Both Apple and Google take a 15-30% fee of subscriptions


Put simply, your app becomes a new platform for your online marketplace. And this isn’t just for online retailers. Any app with a strong brand and loyal users can sell merchandise through the app to generate revenue.

Rovio Entertainment, the company behind the Angry Birds game series, supplement its revenue with a range of branded swag. Other companies like Uber, Asos and Dominoes all use their apps as a platform to sell products directly to their customers.


  • Apple and Google do not take any fees for the purchase of physical items through an app
  • Direct sales to your customers, without a third-party intermediary
  • Use the app features like push notifications and location data to enhance the shopping experience


  • This obviously requires an entire business behind the app for revenue, the app itself is only supporting that revenue stream

White Labelling

New, innovative apps can hold a lot of value even if they’re not making a lot of money. Improved technology, novel features and/or a loyal user base are all highly sought after by big brands that lack the agility to innovate themselves.

Some of the biggest apps on the market were once independent, only to get bought up by one of the larger tech giants, including Instagram and WhatsApp (which are both now owned by Meta).


  • Bigger companies can inject considerable resources into the development of the app
  • Potential for integration with other massive apps which opens you up to a wider audience


  • You’ll most likely lose control of your app
  • Some purchases are only done to remove potential opposition 

Data Licensing

A decidedly more politically charged method of monetisation, but still a very popular option for apps with a large user base. Almost all apps will collect a huge amount of behavioural data on their users, primarily to help them understand their users better and improve their apps. But there are other companies that will pay top dollar for that data.

Data on users’ purchasing habits, daily activities, preference for media content and a dozen other factors that apps can track is gold dust for companies looking to understand their customers better. But those walking down this road must tread carefully. Governments around the world are clamping down on the practice of user data collection to ensure people have more privacy and control over their personal information. Clear, unambiguous user consent is required nowadays, and in the future, there may be even more regulations to adhere to.


  • As you should be collecting a lot of this information already to help improve your app, the cost of selling that data is very low


  • Growing regulations around the collection and selling of user data can make the practice a minefield to navigate
  • There are restrictions around selling the data of children - the age at which a child can give their own consent under the GDPR is 16 years, but in the UK,  the age limit has been lowered to 13 years

Transaction Fees

Some apps are the intermediary between buyer and seller. A platform where customers can browse products and services and purchase all within the app. For the facilitation of this transaction, apps like these add a fee to each transaction.

Just like any online marketplace or brick-and-mortar store, this is an accepted price for doing business and can be a lucrative revenue stream. Apps like Deliveroo and Just Eat have become massively successful purely from the small (or lately not so small) transaction fee they take from someone ordering a pizza.


  • Cost-free revenue stream 
  • A good chunk of your users will come onto your app because of advertisements from your sellers (so free for you)


  • Large or unnoticed transaction fees can generate a lot of negative user reviews
  • Sellers will shift to a platform with lower transaction fees unless your app can justify its higher costs with a bigger user base or better features

So which to choose?

Ultimately, the choice of which monetisation method is right for your app will come down to which can generate enough revenue to maintain and grow the app, without driving away users.

Here’s some valuable advice to follow:

  • The app's value should always outweigh the cost. Users will only hand over their hard-earned cash if they feel they’re getting something worthwhile
  • Understand your audience. Not every target audience can afford another monthly subscription, while others would turn their noses up at a whiff of an ad. Aligning your monetisation strategy with what works for your audience is more important than aligning it with what works for you.
  • Consider a hybrid method. Most of these options can work in conjunction with each other, and diverse revenue streams will be more stable in the long term. For instance, most apps with ads will offer an in-app purchase to remove them, so don’t feel like you have to stick to one entirely 
  • Analyse everything. The journey of creating a great app doesn’t end after you launch, and the journey of making money off that great app doesn’t end once you’ve decided on how you monetise it. Study how your users are behaving on your app. Review which users are paying more for the app and which are holding back. And take a read of your reviews (especially the bad ones), users will always be the first to tell you if you’re going wrong.
  • Plan ahead. An in-depth Discovery phase is always the best place to start when developing an app, and the learnings you take away from this phase will help you inform your choice of monetisation methods. Understanding your audience is key to determining what they will and will not pay for, and understanding what features of your app are most popular will allow you to optimise your monetisation strategy. Click here for a detailed breakdown of the Discovery process

So now you know, go out there and make some money.

10 Ways You Can Make Money from Your App