02/29/2016 01:09 pm ET Updated Mar 01, 2017

4 Ways To Monetize Your Mobile App

One of the leading problems that app publishers want to solve is how to make money from their apps. There are in fact several powerful ways to monetize your apps, even if they aren't games. For example, publishers can consider implementing in-app ads, offering freemium products, enlisting their apps in affiliate & referral programs, and featuring in-app purchases.

1. In-App Ads

One of the first monetization strategies considered by app developers is in-app ads. However, you'll quickly find that they tend to add more frustration for your users than income for your app business. The few apps that do well with in-app ads spend a significant amount of time considering where to place these ads.

Trulia, for example, displays the contact information for area real estate agents as users browse listings within specific ZIP codes. This type of advertisement is seen as improving the user experience rather than intruding on the user.

2. Freemium

The basic idea of the freemium model is to offer a stripped down version of the app that still meets the needs of most users. In addition, a premium version is offered with a package of additional features. Ideally, enough users will choose to purchase the premium upgrade to offset the cost of development. One of the biggest drawbacks of this monetization strategy is that the bulk of your users, those using the free version, will have an inferior service.

3. Affiliates and Referrals

Similar to in-app ads, affiliate programs and referrals can work well if they are done right. It's important to match your offers with your users. However, keep in mind that setting up an affiliate program with a product that does not make sense for your audience may do more than just result in no revenue, it could cost you users. Matching referral offers with user profiles can transform your app into a shopping magazine that drives sales.

4. In-App Purchases

Games have pioneered the in-app purchases monetization strategy. This is very similar to the freemium model and even has a great catchphrase: "free to play, pay to win." In-app purchases can be additional resources and gear, just like they are in most games. However, it can also be sticker packs, camera filters, tool kits or other elements that modify your users' experience with the app. The key is to provide just enough free access to the app that your users can begin to see the value of making in-app purchases.

The most important thing to keep in mind when monetizing apps is to begin with the right business model. You must think about how you will acquire new users for your app, what problem the app will solve, and where your app adds value for users. Knowing these things will help you figure out the right way to monetize any app.

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