Ads are a common way of monetizing apps — providing a way to extract value from users without making them pay for the app directly. However, due to the scale they require most in-app ads never end up providing enough money to justify the downsides they bring. Additionally the negative effect on user experience and the dependency on ad networks to end up tilting the scale to the negative.
At RevenueCat we aren’t against ads by default, but for most apps asking customers to pay for the app is a better way. This reasoning comes into effect especially when you’re monetizing a new app, where retention is more important than acquiring. That’s why we made this guide to monetizing your app without ads, going through all the other monetization methods you have at your disposal.
This guide takes an indie developer friendly approach, suggesting methods you can adopt from already before you launch your app, and offering guidance on moving from one monetization method as you scale.
Why indie developers should not choose ads
When you’re an indie developer, ads are most likely the worst choice for monetizing your app. Hear me out. You most likely built your app because you yourself had use for it? Or perhaps you wanted to build something cool, or perhaps you just like building apps. Whatever the case is, what you’re predominantly not interested in is money in most cases, but building something people want to use.
There is a certain thrill that you get when you see people using your app that is hard to beat. It can almost become a goal to get more users. At the same time, you wouldn’t mind getting a little bit of monetary recognition for your work. At that point you start to think “I don’t want to restrict my app from anyone, I’ll just put ads”. But ads come with multiple downsides:
- Massive downgrade to user experience and messy looking UIs
- Plenty of privacy concerns due to user data tracking
- Performance issues (draining more battery, more data usage)
- Your personal brand will take a hit
In general, it’s hard to position your app as a serious app with ads. There are plenty of ways to monetizing your app that have way fewer tradeoffs. Not to mention how little money ads usually bring you.
To give an example let’s look at the 1000 true fans hypothesis, an article by Kevin Kelly about how you can build a business or side hustle by just having 1000 true fans who all pay a little bit for the things you’re producing. 1000 people paying just a dollar a month is $12k a year. If you had 1000 users using your app with ads, you would only get a few dollars per month.
The core non-ad monetization models
Whether you’re targeting iOS or Android, the ways you can monetize your app are the same. Let’s go through all the ways you can monetize your app beyond ads.
Pay to download
Pay for the full version of the app used to be a common model back when software was still sold on CDs (ask your father). Back then developers could release a new every year and capture more revenue from users as they bought the new version of your app.
App Store and Google Play Store still support putting a price on your app, but Apple for example considers this model outdated. As developing and supporting an app is a continuous process, the only time you should consider adopting pay to download is if you’re going to release your app once, and make only very limited changes to it in the future.
In-app purchases (IAP)
Once the user has downloaded your app, whether that was for free or for a charge, you can actually ask users for more money. Both Play Store and App Store support payments inside apps for purchasing digital goods inside the app, hence the name in-app purchases. There are few different in-app purchase options: consumables, non-consumables, non-recurring subscriptions, and recurring subscriptions: the latter which we will talk about in its own section. Let’s first go through the other options.
Consumables
Consumable in-app purchases are payments for things in the app that the user purchases and then consumes, such as extra lives in a game. They grant users the access to contents only until they are used in the app, so they work well for example in games where you can build custom economies based on them.
Non-consumables
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