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The app store is a battlefield. Millions of apps are fighting for user attention, and a “build it and they will come” strategy is a guaranteed path to failure. As an app publisher, your primary goal isn’t just downloads, it’s building a sustainable business. That means monetizing user engagement effectively.
This guide cuts through the noise. We’re ditching outdated advice and giving you a direct Q&A breakdown of the seven essential in-app revenue models you need to master in 2025.
This is the most straightforward model: your app is free to download and use, and you earn revenue by displaying ads. In 2025, this isn’t just about slapping a banner at the bottom of the screen. A successful IAA strategy relies on a sophisticated mix of ad formats integrated seamlessly into the user experience.
It’s a good idea to test this out within the in-app ad framework, depending on the types of ads you are running and how regularly they are being served on the app.
Learn more about in-app ads here.
Relying on a single ad network and a legacy “waterfall” system. The modern standard is In-App Bidding (also called Unified Auction), where multiple ad networks bid on your ad space in real-time. This creates a competitive auction for every single impression, maximizing your revenue. Not using bidding is actively leaving money on the table.
Rewarded Ads are a powerful psychological tool based on a simple value exchange. The user voluntarily chooses to watch an ad in exchange for a tangible, in-app reward. It’s an opt-in experience, which users overwhelmingly prefer.
This model wins on all fronts:
What rewards actually work in 2025?
Generic rewards are dead. Your reward must be specific and valuable within the context of your app.
Related Read: https://www.monetizemore.com/blog/rewarded-ads-practices-mobile-apps/
Do rewarded video ads bring in more money?
In terms of eCPM, non-muted video ads perform better than muted video ads by $2.03.
In rewarded video ads, not allowing players to skip ads results in an eCPM boost of $4.20.
In spite of the fact that rewarded video ads are best suited for certain genres, 90% of all users do not watch a rewarded video advertisement completely.
Non-negotiable best practices for Rewarded Ads:
Playable ads are interactive video ad formats that let users get a short preview of your app before deciding to download it. They are best used for mobile game promotion, giving users a brief taste of the actual game.
These ads are mini, interactive demos of another app or game, delivered as an ad. They have an explosive Click-Through Rate (CTR), often 3x to 5x higher than standard video ads—because they engage the user’s curiosity. Instead of passively watching, users are actively participating. This leads to higher quality installs because the user already knows they enjoy the core mechanic.
Are they just for gaming apps?
Absolutely not. This is a 2025 misconception.
What’s the catch with Playables?
Development cost. Creating a high-quality playable ad is more resource-intensive than a static image or video. However, the return on investment from higher conversion rates often justifies the initial cost.
Related Read: https://www.monetizemore.com/blog/what-are-playable-ads-google
An Offerwall is a dedicated space within your app that acts as a marketplace of rewarded actions. Instead of just watching one video, users can choose from a list of “offers” to complete in exchange for larger amounts of in-app currency.
Offers can include:
The Offerwall is your secret weapon for monetizing your “power users” who will never spend real money. These engaged users are willing to trade their time and effort for the rewards needed to progress. It provides a high-revenue alternative to standard ads without cannibalizing your IAP revenue stream from paying users.
Paid Downloads are not dead, but it’s a niche, high-stakes strategy. By charging upfront, you create a massive barrier to entry. This model only works if your app provides immediate, undeniable, and unique value that cannot be found elsewhere for free.
Consider this if you are still worried about forcing ads on your users but still aren’t convinced that you can charge them a monthly, quarterly or annual subscription fee:
Subscription and Freemium models are deeply connected.
Examples are Spotify or YouTube. The free version is usable but has limitations and ads. The premium subscription removes ads, adds features (like offline downloads), and creates a superior user experience.
Why is this model so powerful?
Predictable Recurring Revenue. Unlike ad revenue which can fluctuate, subscription income provides a stable, forecastable revenue stream that investors and developers love. It also builds a direct, long-term relationship with your most valuable users.
The freemium Model is similar to the in-app ad revenue model explained above.
In addition to providing the option to remove ads by subscribing, you also provide a freemium model, in which paid users get exclusive features and a totally ad-free app. For instance: The Spotify Premium Model. For apps where users need a little extra incentive to avoid ads, the freemium model works perfectly.
Related Read: https://www.monetizemore.com/blog/make-money-mobile-app-monetization/
This is the ultimate strategy and the one used by virtually every top-grossing app. You don’t choose one model; you intelligently combine them. A hybrid model creates multiple, overlapping revenue streams by catering to different types of users within the same app.
For example: A mobile RPG game:
Why is this the undisputed future?
Since it maximizes the Lifetime Value (LTV) of every single user, it acknowledges that not all users are the same. By providing different paths to value, watching ads, making one-time purchases, or subscribing, you ensure that you are capturing revenue potential from your entire audience, not just a small segment.
Choosing the right models is only half the battle. Implementing them, optimizing your ad stack with in-app bidding, and analyzing the data to make informed decisions is where publishers either succeed or fail. Your approach cannot be set in stone; it must be a constantly evolving strategy.
The best model depends on your goals as a developer or publisher. If you’re trying to maximize your revenue, you’ll probably want to explore all options and tweak them based on what’s most effective and attracts your audience.
Need a bit of guidance on deploying the perfect in-app ad revenue model for your app?
With over ten years at the forefront of programmatic advertising, Aleesha Jacob is a renowned Ad-Tech expert, blending innovative strategies with cutting-edge technology. Her insights have reshaped programmatic advertising, leading to groundbreaking campaigns and 10X ROI increases for publishers and global brands. She believes in setting new standards in dynamic ad targeting and optimization.
10X your ad revenue with our award-winning solutions.
