Developers of mobile health applications are making calculated trade-offs in how they earn money, with consequences that extend beyond their balance sheets to the experience, privacy, and accessibility of users, according to research in the International Journal of Electronic Marketing and Retailing that has looked at app markets in Portugal.
‘Mobile health’ refers to smartphone applications that help individuals monitor their health and illnesses, track fitness, access medical advice, or manage treatment. Such tools are widely promoted as a way to improve healthcare efficiency by enabling continuous data collection and encouraging patients to take a more active role in their wellbeing. However, the long-term viability of the commercial apps depends on how their developers monetise patient usage.
The researchers focused on three principal monetisation strategies: upfront download fees, in-app purchases, and in-app advertising. A download fee is a direct payment required before a user can install the app. In-app purchases allow users to pay for additional features or content after downloading, while advertising generates income by displaying promotional material within the app, which might be tailored using personal data.
Each approach carries distinct costs for users. While download fees are explicit and easily understood, advertising-based models introduce indirect costs. These may include time spent viewing adverts, interruptions to the user experience, and concerns about how personal health data may be used to target ads. In-app purchases, meanwhile, can create uneven access to functionality, with some features effectively locked behind paywalls.
The researchers found that advertising commonly substitutes for upfront fees. This reflects a strategic trade-off on the part of the developers: charging upfront generates immediate income but risks discouraging users from installing the app, whereas free access supported by advertising can attract a larger audience, increasing the app’s value to advertisers.
By contrast, in-app purchases tend to complement rather than replace advertising. Applications offering optional paid features are more likely to include ads as well. This allows them to build a broad user base but to boost their income with additional revenue from a subset of users willing to pay for enhanced services.
Cardoso, C., Machado, C.S. and Lemos, N. (2026) ‘With or without ads? A question for health apps’, Int. J. Electronic Marketing and Retailing, Vol. 17, No. 3, pp.362–375.
