How to monetize an app: ads, subscriptions, or both

There are four main ways to monetize an app: advertising (AdMob is the most common), subscriptions, in-app purchases, or using the app as a channel to sell something else. Ads make sense when the app is free and used many times a day; a subscription, when users get value that keeps renewing; and for a business app, the money almost always comes from the sales it drives, not from the app itself.

In my games (Sudoku Play, Block Drop Play, Color Match Drop and others) I combined ads with a premium subscription. Here is how I set it up, the rules I followed, and what fits each case. What you won’t find here is a promise of how much you’ll make: that depends on users you don’t have yet.

What monetization models are there?

They are not mutually exclusive: games usually run ads plus a premium plan that removes them.

How do AdMob ads work?

AdMob is Google’s ad network for apps. It has three formats I used in all my games: the banner, a fixed strip on one screen; the interstitial, a full-screen ad shown between two screens; and the rewarded ad, which users choose to watch in exchange for something (a hint, coins, continuing a game).

Before serving ads, AdMob asks you to prove the app is yours. That held me up on Sudoku Play: until I published an app-ads.txt file on my own domain and declared that URL in both Google Play and the App Store, no ads were served. Once verified, monetization went live on both platforms. iPhone adds one more step: asking for tracking permission through the App Tracking Transparency prompt, which I built into Color Match Drop and Block Drop Merge from the first version.

What rules did I set so ads don’t drive people away?

• Never during gameplay. The banner lives on the home screen, never while you play. Interrupting the main task is the fastest way to get uninstalled.
• Spaced-out interstitials. In Block Puzzle Play and Color Sudoku Play, one shows every 3 games, with at least 60 seconds between them.
• Users choose rewarded ads. Hints, coins, power-ups, or continuing a game: nobody is forced to watch, which is why it’s the least annoying format.
• Caps that protect the economy. In Color Sudoku Play, coins from ads are capped at 10 per day, and ad-based hints have a 90-second cooldown.
• The reward has to be worth it. In Block Drop Play, watching an ad lets you swap the current game’s missions for new ones, something players actually want.

How did I build the premium subscription?

Premium sells exactly what free users feel: ads and limits. In Sudoku Play there is a monthly and a yearly plan, and it includes no ads, more coins, more hints per game, exclusive themes, and infinite hearts. In Block Drop Play, besides removing ads, it doubles coins, opens up Zen mode, and discounts power-ups.

Subscriptions go through the stores: they are charged and managed in the App Store and Google Play, not inside the app. One lesson I learned the hard way: on iPhone, if purchases aren’t declared properly in the app’s configuration, subscriptions simply don’t work, and the fix is a new version that has to go through review again. That is why it pays to test purchases before every store submission.

Ads or subscription? How to decide

What about coins, purchases, and cheating?

If the app has an economy (coins, lives, purchases), the golden rule is: don’t trust the phone. In Sudoku Play coins, XP, and purchases are validated centrally. The app shows the result instantly, but the final number isn’t decided by the phone. In duels with stakes, coins are held in escrow from the moment the duel is created until it’s settled. Before I did it that way, a naive approach to merging data across devices let people create coins out of thin air.

It sounds like a gaming problem, but it applies just as much to loyalty points or credits in a business app: if they can be redeemed for something, someone will try to inflate them.

What if my app is for a business?

In a restaurant, gym, or retail app, ads rarely make sense: you’d be showing ads you didn’t choose right where your customer is about to buy from you. There, the app pays for itself through what it enables: orders, reservations, bookings, repeat purchases. I go through it industry by industry in apps for restaurants, apps for gyms, and apps for retail.

And before thinking about monetization, ask whether you need an app at all or a website would do. I compare both in mobile app or website. What does carry straight over from games to a business are the mechanics that bring people back, which I cover in how to retain users in an app.

How much does adding monetization cost?

It isn’t a switch you flip: it means integrations (ads, purchases), setup in both stores, privacy permissions, and, if there’s an economy, checks so nobody can cheat. All of that adds hours to development and maintenance. What drives development cost is in how much a mobile app costs, and the recurring monthly costs in how much it costs to maintain an app. If your iPhone app will show ads, also read why Apple rejects apps: the tracking prompt was behind one of my rejections.

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