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How to overcome the challenges of mobile ad monetization

Posted by on 02/02/2016

Making money from an app
is risky business, especially when there are more than 1.7 million apps available across different app stores and thousands being submitted for review and publication each day.

When publishing apps, developers have to choose between charging a one-time fee on installation (and deciding what the price will be), or offering the app for free and monetizing within the app. Both options have their own set of challenges (although roughly 75 percent of developers choose the latter). Charging for installation is risky because users are likely to find the needed value in some other free alternative. On the other hand, in-app paid features have their own unpredictable nature and in most cases can’t be relied on to reach profit goals.

This is where mobile ads enter the fray, offering an alternative that can give your users full benefit from your app’s features while also making sure it generates a steady – and hopefully increasing – flow of income. Mobile ad spending doubled in 2014, reaching a whopping $14 billion dollars, which only proves how this monetization medium is growing.

But as with all types of advertisements, mobile ads have their own pitfalls and challenges. Not knowing and addressing them can lead to failed attempts at monetizing your apps, unsatisfied users, and even the possible deletion of your app. In this piece, I’ll offer several tips to help you make the most out of running ads in your app.

Show respect for users

Due to their history and nature, ads have become widely infamous for being annoying, intrusive and distracting, especially when they have nothing to do with the app’s context or the user’s preferences and tastes. However, while most users hate ads, they are reasonable enough to acknowledge the necessity of ads for supporting free apps. Therefore, while they will not expect you to shut down ads altogether, they will expect you to not make them part of some widespread, random campaign. How to make ads attractive to your users is one of the challenges you’ll have to surmount.

To achieve this goal, you’ll have to be very careful in how you vet and select your target ad platform and advertisers. Make sure what you select has to do with the demographics and preferences of your users. Never forget that users spend hours staring at and tapping on their phones every day, and even more in their pockets, which means smartphones are very personal in nature. When users see an ad, it has to offer them a personalized experience, possibly present them with a story they can be a part of or a mission they feel they must complete.

Use rewarded ads to maintain user engagement levels

When done wrong, ads tend to disrupt user experience and engagement. Therefore, it is important to have a plan to keep engagement high and positive while serving ads.

One model that can help in this regard is incentivized or rewarded ads, where the user is rewarded for viewing or tapping on an ad. This reward can usually be some sort of online discount on the advertiser’s goods, or in case of mobile games, a bonus or upgrade. Advertisers usually pay a percentage of the price to the app publisher when the user redeems the reward and purchases the discounted product. This is a win-win situation in which the user receives some sort of bonus for viewing the ad, the publisher gets paid, and the advertiser gets increased impressions and conversions. It also encourages users to continue using the app in order to receive further rewards.

One successful example of the use of incentivized ads is the game Two Dots, which offers extra lives to users who watch video ads (they don’t even need to click on them) that appear during game progression.

Display the right ads To the right eyes

Ad viewers only take note of the advertisements that actually fulfill one of their needs. Not showing the right ads for each user will not only decrease your CTR (click through rate) dramatically, but it will also decrease user satisfaction and engagement. Correspondingly, you’ll increase user frustration, app exits, abandonment, and uninstalls.

The silver lining here is that running ads in a mobile app gives you the exclusive opportunity to actually tailor your ads for your users’ needs instead of shooting at random. If you have an analytics tool running behind your app (which I strongly recommend you do), you can use the useful data it generates to better decide which ads to show for each user.

Setting up funnels and goals can help in this regard; just make sure that the ad platform you choose has the capability to integrate with the analytics API you’re using.

Crunch your numbers, know your users: Introduction To The Basics Of Mobile App Analytics

Beware of ad monopolies

For the sake of simplicity, some ad delivery platforms pair up with a single ad network, which makes them lazy in optimizing their ad selection and monetization rates. In order to avoid ad monopolies, you should either set up your app to work with multiple platforms (a process that involves a lot of headaches, gray hairs, and no guarantee for success), or find an ad mediation platform that automatically optimizes ads.

Platforms that integrate all major ad networks have the ability to serve advertisements on your app based on revenue instead of bids, making them more suitable, fair, and honest.

Final thoughts

Mobile ads can contribute to your app’s monetization value without making it annoying or spammy. You just have to know how to do it right.

Hopefully, the aforementioned tips will help you make more efficient use of ads in your app. If you have anything else to add, please leave a note in the comments section. 

Topics: Uncategorized

2 responses to “How to overcome the challenges of mobile ad monetization”

  1. yasin BADUR says:

    Hello, i am a android app developer. I have about ten app in google play. In my app, i use google admob ad network. My apps totaly have over ten thousand active dowloads. My advertising revenue is very little. Daily it is about 2 dolars. Is it normal? Could you please explain me. Thank you.

  2. PK Menon says:

    this is really good we have used in one or two tips in our Android apps Cyber Zoo using our own Ad platform dADi from Twinvaves Technologies.