Debunking 5 In-app Advertising Monetization Myths
You have a great idea for an app. You started coding it, and plan to launch it in the App Store soon. Then you ask yourself, “How am I going to make money???”
As most apps in the App Store are downloaded for free, developers are often in search of ways to make money from their efforts. Here’s the good news: we’re here to help! Let’s debunk some of the myths surrounding in-app advertising.
Myth: Ads are obtrusive to the user experience.
Reality: When integrating advertising into an app, it’s critical to do so in a manner that does not disrupt the user experience. If the experience is disruptive, your customers will simply abandon your app. Some of the most successful apps of all time have seamlessly integrated ads and maintained a solid user experience. Zynga’s ‘Words With Friends’ is a classic example of how to do it right. First off, Zynga has created a great game – of course, it all starts there. Second, Zynga has integrated many different ad types (banners, interstitials, and video), all very elegantly into the fabric and user flow of the application. Banners are simply placed on the home screen where a user starts their experience and finds a game to play. Interstitial and video ads are strategically placed in-between turns; a place where users naturally expect an ad (similar to how television viewers expect a ‘commercial break’). If you implement advertising in the right places and at the right time, they can be organic to the experience and actually add value to the end user!
Myth: You only need one strategy for monetization.
Reality: There are many different models that developers can leverage to make money with their apps. Whether it be a one-time fee, in-app purchases, or advertising, developers are increasingly deploying multiple strategies to make money from their apps. In many cases, developers are choosing dual strategies of paid and free ad-supported apps to ensure they have a business model that enables them to monetize 100% of the users. Many companies like Pandora and Rovio offer a paid version (that does not have ads), and a free version that is ad-supported, giving consumers options for how they want to use their products.
Myth: Free won’t pay the bills.
Reality: The vast majority of apps available in the App Store are free. Why? Because consumers love FREE. Free is great because there is no barrier to getting someone to try your product. However, once you’ve convinced them to download the product, you’d better impress them with quality. Take King’s ‘Candy Crush Saga’, for example; the free download has become an addiction for me. I am now on level 361 (yes, I am bragging) and have been playing this game for more than a year. Subsequently, I have spent money helping further my progress in the game (my specific in-app purchase of choice here are the Lollipops). The monetization success ‘Candy Crush Saga’ has achieved is incredible – but not the norm. At Millennial Media, we work with close to 50,000 different sites and apps that have chosen the path to monetize their free apps with advertising. These developers and publishers have created engaging consumer apps, and elegantly integrated ads – thus, helping them pay the bills without consumers ever paying a cent. In 2012, Millennial Media paid developers in-excess of $100 Million – all of this revenue coming from advertisers that are seeking to engage with consumers in apps and on mobile web sites. This would be a pretty clear indication that ‘free’ is paying the bills for many developers.
Myth: I will need a ton of users looking at ads to make money
Reality: Theoretically, you don’t need volume…you need the right consumers, at the right time, and in the right place. Obviously, the more consumers, the better! Advertisers desire both wide and niche audiences. For example, if you have an app that is Finance-related, there are plenty of advertisers that seek that audience. You can maximize your earning potential with strategically placed ads targeted at these users. You can even diversify your opportunity with a combination of banner, interstitial, and video ads, which allow advertisers to engage with users in a variety of different ways within your app. Advertisers are capturing the interest of app users through interactive video ads including movie trailers and interactive product displays. Even better – these types of campaigns often demand higher prices, resulting in developers and publishers making more money from each engagement.
Myth: I have an exercise app, therefore my users should only see exercise-related ads.
Reality: You are a developer, but likely have interest in other activities and products, just like your users. In fact, ads for complementary products or services can be useful and engaging for your users. In order to further increase your earning potential, you can ask permission to gather metadata from users, such as location, gender, and age. This information helps to define the context of the user and allows you to deliver more relevant ads.
So don’t wait! We strongly encourage you to integrate now to take advantage of the holiday season where advertisers are looking to engage with consumers and get their messages out. Please contact us for more information or visit mMedia to get started with mobile advertising and implement these best practices today.
More from Matt Gillis
Millennial Media is the leading mobile ad marketplace, making mobile simple for the world’s top brands, app developers, and mobile web publishers. The company's data and technology assets enable advertisers to connect with target audiences at scale, while driving monetization for publisher and developer partners. AOL acquired Millennial Media on October 23, 2015. Millennial Media boosts AOL's global, mobile capabilities and scale across ONE by AOL for advertisers and agencies, and offers the most attractive monetization platform for app developers.