App monetization strategies are unique to every app. Some apps can be monetized at scale with ads while some monetize better with in-app purchases. And then there are apps that benefit from a combination of both in-app purchases and advertisements. This is called Hybrid monetization and I’m sure you’ve seen this in at least one app you’ve used today.

What is Hybrid Monetization?

Hybrid monetization means using more than one revenue method within a single app. Earlier, the majority of apps relied on just one strategy: advertisements, in-app purchases, or paid downloads. But this blanket approach never suited the entire user base.

Some users are willing to pay for premium services, while others would rather watch an ad instead, and many fall somewhere in between.

A hybrid model accounts for these differences. For example, a mobile game might let players buy updates or remove ads, while also offering rewarded videos for those who’d rather watch an ad in exchange for in-game incentives. This way, the app earns revenue from both spenders (referred to as whales in the gaming) and free users alike.

Hybrid Monetization in Mobile Gaming

The mobile gaming industry experiments with different combinations of in-app purchases, ads, and subscriptions. Developers can reach every type of player from free users who never spend, to those willing to pay for premium features or customizations through hybrid monetization. Here’s how the three core components work in practice:

1. In-App Purchases (IAPs)

In-app purchases offer players the chance to buy premium game upgrades. For example, virtual currency or power-up items. This strategy works particularly well with users who want to advance faster and don’t mind spending.

Example – Candy Crush Saga is a popular game that utilizes in-app purchases. In this popular game, players often need to purchase power-ups to boost their chances of completing challenging levels.

2. In-App Advertising (IAA)

There are different forms of advertising in games. Popular formats for gaming include banner ads, interstitials and rewarded ads. Game publishers would agree that rewarded video ads are one of the most effective for monetization. Players choose to watch an ad in exchange for in-game benefits. The key is integrating ads naturally into the gameplay loop so they don’t look like a disruption.

Example – In the popular game Call of Duty: Mobile, players use rewarded ads through its “lucky board” feature. Players can watch ads to earn coupons, which they can then use to spin for random rewards. These ads were opti-in to keep the interests of the players high.

3. Subscriptions

Subscriptions are popular in mobile gaming for their recurring revenue to app and game publishers. Besides, they offer perks to gamers, too. These might include exclusive items, daily rewards, or ad-free experiences.

Example – In Clash of Clans, players get a monthly “Gold Pass” subscription. For around $6, players get access to exclusive skins, boosts for faster upgrades, and additional rewards. Casual players enjoy the perks without feeling forced, while competitive players see the Gold Pass as a must-have to stay ahead. Importantly, the game still offers free rewards through the Silver Pass, ensuring that non-subscribers don’t feel left out.

Hybrid Monetization in Non Gaming Apps

Hybrid monetization isn’t just for games, it’s quickly becoming a go-to strategy for non-gaming apps as well. From fintech to fitness, developers are realizing that relying on a single revenue strategy leaves too much money on the table.

1. Many fintech and financial apps begin with an ad-supported free tier before adding premium subscriptions for more advanced features like portfolio tracking or detailed spending reports. Some even offer one-time IAPs for specialized features.Splitwise is a freemium finance app that helps people track shared expenses and split bills with friends, family, or roommates. The core features are free, while advanced tools like receipt scanning are available in the Pro version.
2. Shopping and e-commerce apps are another strong example. They can run ads for featured products, sell subscriptions for perks like free shipping or faster delivery, and even experiment with rewarded ads that unlock discounts.Amazon uses multiple revenue streams, too. It has ads for sponsored products, a Prime subscription for free shipping and faster delivery, and occasional reward-style promotions like cashback or discount coupons.
3. Apps for health and fitness frequently use a freemium business model, which includes ad-supported free exercises, one-time purchases for customized plans, and tiers of subscriptions for ad-free experiences, personalized coaching, or customized programs.

What are the Benefits of Hybrid Monetization?

It;s risky to rely on a single monetization strategy, hybrid monetization gives you more strength. Here are the main benefits to read:

• More Stable Income

If one revenue stream slows down (for example, subscriptions drop), other streams like advertising pick up. This means less risk. You aren’t totally dependent on people paying every month.

Clash of Clans uses a hybrid approach with in-app purchases, rewarded ads, and seasonal events to keep players engaged. Limited-time content and battle passes encourage steady spending, while collaborations boost engagement further. This mix ensures ongoing revenue and long-term player retention. (Source)

• Reach More Types of Users
  

Not everyone is willing or able to pay monthly. Some prefer cheaper, ad-supported viewing. While certain players want an ad-free gaming experience and are willing to pay more. With a hybrid model, you can cater to all these categories.

• Better Retention and Upsell

You can always bring in users cheaply with a free or low-cost/ad‐supported option. Over time some of them upgrade to premium or buy extra content. This makes the funnel stronger. Once people are using your platform, they are more likely to stay than if you force them to pay upfront.

Candy Crush is a clear example: with 273M MAUs, only ~3–4% pay, yet ARPPU hits $25–35/month. Seasonal events like the 2025 All Stars tournament drove an extra $108M in a single month. By keeping free players engaged and nudging upgrades, the game proves how hybrid models boost retention and long-term revenue. (Source)

• Fit Different Markets and Price Sensitivities

In certain markets people prefer ad-supported or freemium models since they work well within their budget. In more affluent areas, people may prefer paying for ad-free content. Hybrid monetization allows catering to these differences.

Summary

Hybrid monetization is about creating multiple, user-friendly entry points that let every type of user contribute to your revenue without harming the experience. Thus, it’s slowly becoming a hit among app publishers and game developers.