Looking for current mobile app monetization statistics for 2024?

Discover important data pinpointing the most profitable strategies, the disparity between platform revenues, and the effectiveness of advertising models. This article explains the statistics shaping app revenue today, from free-to-play successes to subscription model dynamics.

Equip yourself with crucial, number-driven insights to inform your mobile app’s own monetization model and approach in 2024.

Key takeaways

• Mobile app industry remains highly lucrative, with top apps earning an average of $82,500 and global consumer spend on mobile apps hitting $129 billion in 2022. iOS users spend significantly more than Android users, contributing to 67% of total consumer spend despite Android’s larger market share.
• In-app purchases are a dominant revenue source, projected to reach $340.76 billion by 2027, and account for 48.2% of total mobile app earnings. Subscription services and advertising, including video and interstitial ads, are key monetization strategies, with subscription apps retaining a 35% rate after 90 days and providing developers 85% revenue share after the first year.
• User engagement is critical for monetization success, with retention strategies and aligning monetization methods to user preferences being crucial. The rapidly growing segments include gaming, entertainment, education, and dating apps, each with targeted approaches to monetization, such as the freemium model and refined advertising strategies.

Exploring the 2024 mobile app revenue landscape

The mobile app industry is a gold mine of opportunities. With top mobile apps earning an average of $82,500, the potential for profitability is immense.

In 2022, iOS and Android users cumulatively spent a whopping $129 billion on mobile apps, a testament to the immense scale of the app market. The revenue distribution is equally fascinating.

Here are some key statistics:

• Despite Android’s larger market share, iOS accounted for a substantial 67% of the total consumer spend.
• Google Play trailed at 38% in 2022.
• This discrepancy can be attributed to the higher average spending of iOS users, a topic we will explore in more detail later.

The future holds promising projections for app revenue as substantial growth across different regions is expected. Europe, for instance, is expected to experience a 23% annual growth rate.

This promising outlook is a direct result of the relentless innovation and creativity in mobile app development company itself. Developers who grasp user preferences and implement strong app monetization strategies stand to benefit greatly from this expansion, generating significant revenue.

The surge in free app revenue

Even though free apps don’t charge for download, they have found lucrative ways to earn money. They make use of two potent monetization strategies: in-app purchases and advertising.

For example, on the Google Play store alone, an astonishing 98% of the revenue is generated by free apps that use in-app purchases to offer users a taste of full features before prompting them to pay for complete access or additional content.

These no-cost apps, including webview apps and hybrid apps, harness various advertisement formats as part of their revenue-generating strategy. The key to monetizing these apps is having a substantial user base, which can lead to significant ad earnings.

For webview apps, which display web content within a native app interface, and hybrid apps, which blend native and web app features, navigating the monetization landscape involves meeting specific guidelines such as the Apple App Store approval process and Google Play Store requirements.

Leveraging ads effectively for these types of apps includes overcoming hurdles — constantly tweaking and testing different placements and types due to varying effectiveness over time. When the strategy is refined, the range of ad options such as banner ads, interstitials (full-screen pop-ups), native ads that blend seamlessly within app interfaces, and video commercials can open up potential for substantial income streams.

The impact advertising has made extends across numerous app categories including entertainment platforms, social networks, and fitness trackers, where it contributes markedly towards overall consumer expenditure patterns within those domains.

Android vs. iOS: A comparative revenue analysis

The conversation around app revenue becomes particularly intriguing when considering the Android versus iOS landscape.

Though Android boasts a commanding market presence, with 70.5% compared to the 28.8% held by iOS, apps on Apple’s platform rake in approximately two-thirds of all app store earnings relative to those on Android systems.

This imbalance is rooted in the fact that users of iOS typically exhibit higher spending habits, often more than twice as much money per individual compared to their Android counterparts.

A significant portion of developers for iOS experience profitable outcomes. About one-fourth earn upwards of $5,000 from their app revenues alone.

These lucrative results are bolstered by policies within Apple’s App Store such as offering lowered commission rates — 15% rather than standard — for qualified developers, effectively boosting their profit margins.

The pronounced differences in how income is generated across both ecosystems highlight why it’s crucial for developers to tailor monetization strategies specifically to each platforms’ distinct audience and purchasing behaviors.

Gaming apps: The revenue champions

Gaming apps are at the forefront in terms of revenue generation, with a remarkable 72% coming from in-app purchases.

This is evidenced by top-grossing games such as Tencent’s Honor of Kings, which leverage strategies involving limited levels access, life-saving power-ups, and virtual game currency for substantial financial returns.

For many hyper-casual gaming apps advertising constitutes an essential source of income. Using various ad formats including banner ads, full-screen video interstitials, and incentives through rewarded advertisements form part of their monetization tactics for game apps. An example is Subway Surfer, which has adeptly incorporated these rewarded ads into its revenue strategy.

The year 2023 saw strategy and RPG categories — which encompass a range that includes but not limited to expansive empire-building (4X), massively multiplayer online role-playing games (MMORPG), and team battle modules — leading the pack in mobile game consumer expenditure charts.

With evolving monetization approaches that mix methods while prioritizing efficient advertisement techniques to maximize profitability. Gaming apps maintain their dominant position when it comes to earning capacity within the industry.

User engagement and monetization correlation

The success of app monetization is heavily dependent on the level of user engagement. The more an app can captivate its users, the greater the potential for earning revenue becomes.

This principle is vividly seen in media and entertainment apps which maintain a strong average retention rate of 24% at 90 days post-installation, illustrating how important it is to keep users interested and involved as this directly impacts financial outcomes.

Monetization effectiveness resonates strongly with how well strategies resonate with what users want and do within the app. Whether capitalizing through ads within the app or offering subscriptions for exclusive content, these approaches must be tailored to fit user inclinations. Enhancing monetization efforts includes activities like:

• Using benchmarks drawn from customer feedback, observed behaviors, and prevailing market trends.
• Using methods such as cross-promotion among different platforms
• Continually maintaining your application not only improves reach but also aids in driving consistent growth in earnings over time.

Developers should acknowledge that providing tangible value attracts app users. By presenting something advantageous or unique, they are essentially influencing their expenditure patterns positively within their respective app stores.

The role of in-app purchases

The generation of app revenue heavily relies on in-app purchases, with the market for these transactions valued at $76.43 billion in 2019 and forecasted to soar to a remarkable $340.76 billion by 2027.

This growth underscores the vital role that in-app purchases play within the global app market, where they make up 48.2% of all mobile app revenues. Notably, consumer spending on in-app purchases overshadows that of subscription-based apps by a factor of twenty.

A variety of options are available for users who engage with in-app purchasing features ranging from obtaining additional lives or accessing premium content offered by subscription apps to acquiring game-centric commodities such as coins or gems which enhance gameplay progression.

The average user actively buying through an app shells out approximately $9.60 monthly per app offering purchasable items. This expenditure is highest among users in Asia while users in Latin America spend less comparatively.

Leveraging techniques like push notifications can subsequently spike the volume of purchase activities within an app – brands have seen nearly tenfold increases using such strategies effectively –enhancing opportunities for monetary gain through these platforms.

Integrating payment systems into free mobile apps makes it highly convenient for customers to complete their transaction processes using credit cards linked to their respective app store accounts, thus promoting increased financial engagement amongst users.

Subscription model success stories

The subscription model has proven highly effective in generating revenue, providing services through various tiers on a weekly, monthly, or annual basis with escalating costs aligned with added functionalities.

Disney+ garnered close to 7 million new subscribers in the last quarter of 2023 alone and the leading 100 non-game apps brought in $18.3 billion — reflecting an annual surge of 41%.

Notably, after just one year developers enjoy a generous increase to an 85% share of revenue using this monetization strategy as these apps maintain robust user retention at a rate of about 35% over three months.

Despite their successes though, these models must navigate certain obstacles such as continually renewing content and staying relevant within their markets. These factors play critical roles if they’re to develop and sustain a devoted customer base.

Advertising insights: Banner ads vs. native ads

In-app advertising is a key component for earning revenue through apps. By integrating advertisements directly within apps, significant income can be achieved.

Ad format plays a crucial role in the income generated with banner ads bringing in about $0.10 per impression, while interstitials yield between $1 and $3, and video ads command between $5 and $10 each.

This demonstrates that both interstitials and video ads are more lucrative than banners. Social media platforms along with video streaming services benefit immensely from in-app advertising due to their capacity to hold user attention for extended periods.

These types of apps exploit ad formats most efficiently according to research by AppSavvy.

On the other hand, advancements related to privacy such as Apple’s App Tracking Transparency initiative or Google’s Privacy Sandbox could disrupt tailored advertising strategies thus affecting revenues derived from these in-app commercials.

The freemium app model's evolution in 2024

In 2024, the freemium model has experienced significant development. This approach allows users to download and use an app for free while providing them with the option to pay for access to additional premium features or content.

It effectively merges experiences from both free and premium categories within apps. Although conversion rates from freemium to paid typically range between 2% and 6%, some outliers have seen rates as high as 8%.

This year (2024) marked a notable rise of 2.4% in key industries adopting refined tactics aimed at increasing conversions from free users into paying customers.

Nevertheless, a predominant number of individuals will refrain from making any in-app purchases — a noteworthy drawback inherent to the freemium monetization strategy — which underscores an intense focus on strategies intended for turning those who use the free version into subscribers of premium offerings.

Balancing free and premium Features

Freemium models must find the perfect balance between giving sufficient value in their free offerings and creating a compelling premium tier that encourages users to switch to paid options.

It’s essential for freemium apps looking to monetize successfully that they engage users with enough functionality at no cost while simultaneously reserving select premium features, fostering a feeling of desirability and exclusivity.

By employing this tactic, freemium models can entice users toward the premium tier, effectively enhancing the mobile application’s revenue generation capabilities.

Monetizing free users through ads

App developers using the freemium model often depend on monetizing free users, and in-app advertising is crucial to this approach.

Approximately 70% of free apps use advertising as a revenue stream and make money by charging for ads displays, clicks, or installs. For example, Spotify, a well-known free app, generates around 12% of its yearly income through advertisements within the app.

Rewarded video ads are particularly lucrative sources of revenue. In the United States alone, these types of video ads can net an average earning of $0.02 per view for app developers.

By meticulously examining user behaviors and preferences, app builders can optimize their advertising strategies to enhance their earnings from in-app advertisements — this strategic move effectively converts their base of free users into profit-generating audiences.

Diving into app categories: Which are most profitable?

The profitability of an app is heavily influenced by its category. Here's a snapshot of the most lucrative segments:

• Gaming apps - Top earners, with Honor of Kings and PUBG Mobile leading the charge in revenue.
• Entertainment and social media - Significant profits with TikTok showing strong earnings from subscriptions and in-app purchases.
• Investment, travel, and fitness apps - Also among the high earners in the non-gaming category.
• Educational apps - A growing market with potential for substantial revenue through tailored monetization strategies.

Understanding user demands and preferences is key for app developers to capitalize on these categories and maximize their revenue potential.

Target audience and revenue: Finding the sweet spot

Identifying the intersection between your target audience and revenue is crucial for app monetization success.

The platform you choose, whether Android with its larger market share or iOS with higher user spending, significantly affects revenue. In the U.S., the primary app user demographic spans ages 18 to 44, suggesting a wide target market for developers.

• iPhone users tend to spend more on apps than Android users, highlighting the importance of targeting platforms based on user spending habits.
• Lifetime Value (LTV) is a key metric indicating user spending patterns, essential for maximizing profits.
• Conversion rates are influenced by device choice and demographics, with iOS users more likely to make in-app purchases.
• Subscription-based apps face challenges in user acquisition due to upfront or recurring costs, requiring careful strategy planning.

Premium apps serve niche markets, where users are willing to pay for specialized content. Their success depends on user acceptance, marketing effectiveness, strategic pricing, and user engagement.

In the financial sector, "super apps" demonstrate the potential of premium apps to monetize niche markets by offering a range of specialized services.

Dating apps, particularly Tinder, have shown impressive revenue figures, capitalizing on user engagement through subscription services with premium features.

These platforms have effectively monetized user activity, with Tinder alone contributing to a significant portion of industry revenue from in-app purchases.

The rise of video ads in mobile app monetization

Rewarded video ads and interstitial video ads are among the most preferred ads by users. Users particularly prefer rewarded video ads for their incentives; these types of ads are non-intrusive, drive high eCPMs, — effective Cost Per Mille, a metric used to denote the earnings of an advertisement per 1000 impressions — and are enjoyed by players.

Mobile video ads account for 31% of total app revenue, indicating its significance in the mobile app industry. Some key points to consider about mobile video ads are:

• They tend to generate higher eCPMs compared to non-video ad formats, making them more lucrative for app developers.
• By optimizing their video ad strategies, app developers can significantly boost their revenue.
• Mobile video ads also have the potential to engage users in a more compelling way.

The impact of app development on revenue generation

The quality of mobile app development directly influences revenue generation. Developers who tailor apps to meet user needs and integrate key features can drive significant income, especially in industries like retail, travel, and food delivery.

The cost of app development correlates with its complexity; more advanced apps require bigger budgets. Developers typically keep 70% of the revenue from sales in app stores, making the quality of the app a critical factor in financial success.

The future of app monetization: projections and predictions

App monetization has a promising future ahead, with a number of exciting trends looming on the horizon. Some of these trends include:

• Subscription revenue is set to experience considerable growth, with user spend on recurring subscriptions projected to reach nearly $1.26 trillion by the end of 2025.
• The influence of AI in app monetization is expected to increase significantly.
• Referral marketing is being recognized as a lucrative opportunity.

These trends reflect a highly optimistic future for apps in the monetization landscape.

Successful monetization strategies recommend that developers focus on understanding their core user base, setting clear goals, researching competitors, and developing a Minimum Viable Product (MVP) to ensure sustained financial success.

Localized content is becoming increasingly vital for app monetization, as it caters to various cultural, language, and user preferences, and is essential for engaging with non-English speaking market segments and maximizing global revenue.

Summary

To sum up, the mobile app market remains a highly lucrative arena with vast potential for developers adept in user engagement and innovative monetization strategies.

Key to success is leveraging in-app purchases, advertising models, and subscription services, all while staying attuned to the preferences of the target audience.

As the industry continues to grow, developers must stay ahead of trends such as AI integration and localized content to carve out new profit-making opportunities and transform creative ideas into profitable ventures.

Frequently asked questions

What are the most profitable app categories?

Currently, the app categories that yield most app downloads and the highest profits encompass gaming, investment services, travel-related applications, fitness tracking and guidance tools, healthcare management systems, online dating services, and video-streaming platforms.

At present games hold the position as the leading category in terms of financial performance.

How do free apps generate revenue?

Free apps generate revenue through in-app purchases and advertising, which allow them to monetize their user base.

What is the freemium model in app monetization?

Using the freemium model, this free app allows users to enjoy its core offerings at no cost while also presenting them with the option to purchase supplementary features or content in order to elevate their experience with expanded capabilities.

How does user engagement impact app monetization?

User engagement significantly impacts app monetization, as it directly influences retention and revenue through user interaction, involvement, and interest.

What are the future trends in app monetization?

Moving forward, it is expected that the landscape of app monetization will be sculpted by several emerging trends. There will probably be an uptick in earnings from subscriptions and a more significant impact made by artificial intelligence. Tailoring content to specific locales and honing in on the fundamental demographics of user bases are poised to become focal points for those looking to capitalize within this space.

How much does app development cost?

The cost of app development can vary widely and is influenced by factors such as app complexity, platform choice (iOS, Android), and whether the work is done in-house or outsourced. To navigate these options and control costs, Median.co offers a guide that breaks down the approaches and associated expenses. This resource helps you make an informed decision to avoid the common pitfalls that lead to increased costs and project failures. With Median.co, you can also explore an efficient app development platform that simplifies the process and reduces costs, even if you're not tech-savvy.