Most app monetization strategies are either outdated or they ruin the app’s user experience. While they’re popular, they lead users to switch to an alternative. Thus, it increases the churn rate and user acquisition costs.

In this article, we will explore 6 app monetization strategies and how you can use them without degrading the user experience.

Best App Monetization Strategies in 2025

We’ve explored through 6 app monetization strategies that work well in 2025, which include:

Freemium
Subscription
Paid apps
In-app purchases
In-app ads
Pay-per-use

Let’s understand how they work in detail.

1. Freemium

With a freemium model, your app’s core functionality stays free while you charge for other premium features. That’s why your product’s success depends highly on your paid features.

Freemium monetization models often have low conversion rates and high acquisition costs. If not strategized well, the costs can accumulate quickly.

Start by selecting your product’s core value feature. It’s the minimum functionality that should be enough for users to ‘know’ your product. You can keep your app’s free features free forever or for a limited period of time as ‘free trial’.

Free features build trust and keep users engaged. Next, map your premium or paid features. They will scale your app and provide deeper insights. You can pick features that are used mostly by your highly-engaged users — meaning they will pay for them too.

2. Subscription

Subscriptions charge users recurring fees on a monthly or annual basis for an ongoing use of premium features. If a user cancels their subscription, their access also gets limited to the app’s free version.

The subscription model often works on a tiered basis. Here’s an example of Semrush:

In most apps, the first tier could be free or basic, offering all the features to use the app. The next tiers could have more premium features for individual or enterprise use.

3. Paid App

Paid apps work as a one-time purchase. Users pay an upfront, one-time fee to download and use the app.

While users pay just once for your app, they expect ongoing value from their purchase. You can tackle this by providing minor updates to deliver value.

Platforms like Procreate leverage this monetization model the best. The creative app regularly adds new brushes, tools, and capabilities through free updates. It charges additional fee only for major updates.

If you have your app’s ecosystem like Adobe, you can bundle your paid apps with complementary apps to increase their perceived value. This can encourage dedicated users to adopt your app’s entire suite.

4. In-App Purchases

The in-app purchases model allows you to sell digital products and features within your app at a flexible pricing. This monetization model works well with freemium, where users can buy premium features as they want.

In-app purchases can be seen as limited-time upgrades, discounted higher tiers, or extra features. They aim to create an urgency in the user to buy the ‘upgrade’.

5. In-App Ads

In-app ads refer to the text, video, and banner advertisements that you see while using an app. This monetization model is mostly kept along with the free versions of apps.

While in-app ads are free for users, irrelevant ads can hurt user experience. But there’s something you can do better: personalize your in-app ads. For instance, a journaling app can show ads related to ‘self-care’. Just be aware not to show competitor ads on your app.

An uncontrollable number of ads can still ruin the user experience. To manage this, create a rewards system with which users can choose to view ads themselves. If they watch an ad, they might get a glimpse of an app feature.

6. Pay-Per-Use

As the name suggests, the pay-per-use model charges users based on their actual usage of a premium feature. Unlike one-time purchases, the pay-per-use model works on the basis of value delivery.

Most AI-powered platforms use this monetization model as it works fairly on a ‘credit’ basis. In addition, the model makes sense for such apps with recurring costs.

To ensure users understand how many ‘credits’ they’ve users, give them a clear graph for it. For instance, Natively allows you to see your credits usage on the Pricing page.

How to Choose the Monetization Strategy for Your App?

A poor monetization strategy can cause your app to lose users’ trust and ultimately, revenue. While many apps use a hybrid monetization model that combines two or more models to generate revenue, you should consider several factors to choose for your app.

Here are three suggestions on choosing the right monetization strategy:

1. Know your target audience

The first thing you want to clarify is: your app’s value and target audience. When you know your audience, you will also understand:

Who your app’s users are
How often they engage with your app
Their spending habits on platforms like yours

A monetization strategy that works for a health app may not work for a travel app. You need to put together factors like how often your app gets used and how much users are willing to pay in your strategy.

2. Consider your app’s growth

As you grow your user base, you need to focus on creating an experience first. Users will pay for your app’s features only if they know its value.

You can expand your user base and then introduce premium tiers that add more value to the user experience. In addition, focus on maximizing lifetime value after a point of growth. Thus, your app generates revenue without alienating the users.

3. Monitor and optimize

In the beginning stages, you will need to adjust your monetization model based on user metrics. These metrics include churn rate, user behavior, retention rate, and acquisition cost. You need to make adjustments if the metrics aren’t optimal.

Scale and monetize apps with Natively

Natively’s AI app builder allows anyone — coders and non-coders — build apps and scale them at ease. You need just three things to build an app: your app idea, a prompt for it, and a Natively account.

With Natively, it takes minimum effort to scale an app. Build your app today, get user feedback, iterate, and launch by next week.