How to Find the Best Monetization Path for My Business
In today’s highly competitive business environment, the question of “how to make money” is no longer the only challenge. The real question is: how to find a sustainable monetization path that fits your business.
Different products and companies face varying user groups, product types, and market environments. For some businesses, leveraging large-scale traffic for advertising is a shortcut. Others rely on subscriptions or value-added services to generate revenue. Some companies adopt a hybrid model to balance short-term gains with long-term value.
Choosing the right monetization strategy often determines whether a business can survive in the market and even achieve scalable growth in the future.
Types of Monetization
Monetization can generally be divided into B2C (consumer-facing) and B2B (enterprise-facing). The former emphasizes user scale and experience, often generating revenue from a large base of individual users. The latter focuses on professional services and long-term partnerships, offering more stable revenue but relying on client relationships and industry resources.
B2C Monetization
For B2C businesses, the key question is: how to get individual users to pay continuously or generate value through their engagement. Common methods include:
- Product Sales: The most direct model, selling goods via e-commerce platforms or offline channels.
- Paid Content: Users pay for high-quality content such as knowledge, videos, or courses. This has grown rapidly in education and knowledge-based services.
- Advertising Monetization: When user scale is large enough, advertising becomes a core revenue source.
- Membership/Subscription: Offering long-term benefits or exclusive experiences through subscription fees.
- Tipping/Interactive Payments: Users make small payments to support content creators, common in live streaming and communities.
In China, B2C monetization often relies on traffic-driven models (e.g., Taobao e-commerce, Douyin advertising, iQiyi memberships + ads). Overseas, users have more mature subscription and payment habits (e.g., Amazon + Prime, YouTube + Premium, Netflix subscriptions).
B2B Monetization
B2B monetization focuses on: helping businesses improve efficiency, reduce costs, or increase revenue. Typical models include:
- SaaS/Software Subscription: Enterprise tools or office software with recurring subscription fees and strong user retention.
- Advertising Services: Helping businesses acquire customers through traffic and advertising solutions.
- Enterprise Services: Management consulting, training, IT outsourcing, addressing organizational efficiency challenges.
- Data Services: Providing market research and analytics to support business decisions.
- Transaction Commissions/Matching Fees: Earning a commission by facilitating transactions between suppliers and buyers.
- Value-Added Services: Offering customized solutions or technical support on top of standard products.
In China, B2B monetization leans toward ecosystem integration (e.g., DingTalk not only provides SaaS tools but also connects Alibaba’s ecosystem for commerce, advertising, and payments). Overseas, companies like Salesforce and McKinsey rely on professional expertise and brand barriers to build long-term revenue.
Comparison of B2C and B2B Monetization Cases
| Category | Monetization Method | China Example | Overseas Example |
|---|---|---|---|
| B2C | Product Sales | Taobao, JD.com | Amazon, eBay |
| Paid Content | iQiyi, Zhihu Live | Netflix, MasterClass | |
| Advertising | Douyin, Kuaishou | YouTube, Facebook | |
| Membership/Subscription | iQiyi Membership, NetEase Cloud Music | Spotify, HBO Max | |
| Tipping/Interactive Payment | Douyu, Huya | Twitch, Patreon | |
| B2B | SaaS/Software Subscription | DingTalk, Feishu | Microsoft 365, Slack |
| Advertising Services | Baidu Ads, ByteDance Ads | Google Ads, LinkedIn Ads | |
| Enterprise Services | Yongyou, Kingdee, training providers | McKinsey, Deloitte | |
| Data Services | QuestMobile, iResearch | Nielsen, Gartner | |
| Transaction Commissions/Matching Fees | Alibaba International, HC360 | Alibaba.com, ThomasNet | |
| Value-Added Services | Tencent Cloud Custom Services | Salesforce, SAP |
Core Monetization Models
In internet and digital businesses, monetization is mainly categorized into three types: In-App Advertising (IAA), In-App Purchase (IAP), and Hybrid Models. These cover most mainstream monetization paths today.
In-App Advertising (IAA)
- Definition: The advertiser pays, and the platform/media monetizes user traffic by displaying ads within apps or platforms.
- Use Case: Large user base with low individual payment willingness.
- Typical Applications: Short video platforms, free apps, social media.
- Representative Examples: Douyin, Kuaishou, YouTube, Facebook.
Feature: Traffic equals value. Platforms must maximize user engagement while balancing ad load with user experience.
In-App Purchase (IAP)
- Definition: Direct user payment for additional features, virtual goods, memberships, or exclusive content within an app.
- Use Case: Users are willing to pay for enhanced experience or exclusive content.
- Typical Applications: In-game purchases, subscription apps, knowledge/education platforms.
- Representative Examples: Honor of Kings (skins), Netflix (subscription), Spotify (subscription), Dedao/Zhihu Live (knowledge monetization).
Feature: Value-driven. Requires differentiated experiences or scarce resources that users perceive as worth paying for.
Hybrid Model (IAA + IAP)
- Definition: Combines advertising and user payments to offer tiered experiences. Free users see ads, paying users enjoy ad-free or premium services.
- Typical Applications: Most internet platforms.
- Representative Examples: iQiyi (ads + subscription), YouTube (ads + Premium), Tencent Video (ads + subscription + early access).
Feature: Dual-driven. Diversified revenue reduces risk, suitable for large-scale user bases with varied willingness to pay.
Comparison of the Three Models
| Model | Revenue Source | Use Case | Advantage | Examples |
|---|---|---|---|---|
| IAA (Advertising) | Advertisers | Large user base, low willingness to pay | Direct monetization, traffic-dependent | Douyin, Kuaishou, YouTube, Facebook |
| IAP (Value-Added) | Direct user payments | Users willing to pay for value/experience | Stable revenue, high retention | Honor of Kings, Netflix, Spotify, Dedao |
| Hybrid (IAA + IAP) | Ads + User payments | Segmented users, mature markets | Diversified revenue, risk mitigation | iQiyi, YouTube Premium, Tencent Video |
How to Choose the Right Monetization Strategy for Your Business
Choosing the right monetization path is not “copying others.” It requires evaluating your business features and growth stage. Consider these six dimensions:
1. User Characteristics
- Consumers (B2C): Large group, varied payment capacity → suitable for ads, subscriptions, tipping.
- Enterprise Users (B2B): Smaller but high-value and sticky → suitable for SaaS, enterprise services, data services.
- Payment Willingness: Price-sensitive users favor ads; willing-to-pay users enable subscriptions or in-app purchases.
2. Product Type
- Content Products: (Video, news, knowledge) → ads + subscription.
- Tool Products: (Office, productivity, APIs) → SaaS subscriptions and value-added services.
- Social/Community Products: Large traffic → ads + tipping/virtual goods.
3. Traffic Scale
- High traffic → advertising (IAA).
- Small but high-value traffic → paid models (IAP).
4. Competitive Environment
- Industry norms → may limit options if users are accustomed to subscription or ad models.
- Differentiation → in competitive markets, hybrid or niche-focused approaches may work better.
5. Technology and Resources
- Ad system capabilities → targeting, monitoring, delivery.
- Value-added service capabilities → continuous content, features, customer support.
6. Business Goals and Stage
- Startup → prioritize cash flow, fast revenue models (ads or transaction fees).
- Growth → mix ads, subscription, and value-added services.
- Mature → ecosystem/platform approach, leveraging multiple products and services for long-term profitability.
The choice of monetization is essentially a match between users, product, resources, and goals.
Representative Cases
1. YouTube: Ads + Premium Subscription
Core Model:
- Ads (IAA): Primary revenue source. Targets global user base with high watch time.
- Premium Subscription (IAP): Users pay monthly for ad-free experience, background play, YouTube Music.
Features & Advantages:
- Massive traffic → high ad value.
- Tiered monetization → free users drive ads, paying users drive subscriptions.
- Ads and subscriptions complement each other, mitigating risk.
Takeaway: Suitable for content-driven, high-traffic platforms.
2. Amazon: E-Commerce + Prime + Ads & AWS
Core Model:
- Retail: Product sales & commissions.
- Prime (IAP): Paid membership for fast delivery, video/music services.
- Ads (IAA): Search and recommendation ads for sellers.
- AWS: Cloud services, major profit source.
Features & Advantages:
- Diversified business → retail ensures scale, Prime locks in users, AWS & ads drive profit.
- Ecosystem synergy → Prime boosts retail consumption and loyalty.
- Resistant to cyclicality → AWS & ads maintain high profitability.
Takeaway: Fits resource-rich, ecosystem-oriented enterprises.
3. Netflix: Subscription + (New) Ad Tier
Core Model:
- Subscription (IAP): Long-standing revenue source.
- Ad Tier (IAA): New lower-priced, ad-supported plan for price-sensitive users.
Features & Changes:
- Single subscription → growth limited.
- Adding ads → new revenue stream, mitigates churn.
- Key challenge → balancing ads with content experience.
Takeaway: Even subscription-driven models may evolve toward hybrid under market pressure.
| Case | Initial Model | Current Model | Key Advantage | Takeaway |
|---|---|---|---|---|
| YouTube | Ads | Ads + Premium Subscription | Massive traffic + tiered monetization | High-traffic platforms suit dual model |
| Amazon | Retail | Retail + Prime + Ads + AWS | Diversified, complementary | Ecosystem-oriented firms benefit from multiple revenue lines |
| Netflix | Subscription | Subscription + Ad Tier | Content-driven + price tiers | Subscription-only models may shift to hybrid |
There is no “one-size-fits-all” monetization. The best model depends on user characteristics, product type, and company resources. Increasingly, businesses adopt diversified hybrid models, leveraging ads for traffic revenue while deepening value with subscriptions and premium services.
AI and smart recommendations will make advertising more precise, while subscription and personalized services continue to grow. Companies must flexibly adapt monetization strategies to find the most sustainable long-term revenue path.