The avalanche of mobile apps turns up the pressure on individual mobile developers to find new ways to rise above the noise and generate meaningful revenues. A great app is a good start, but developers determined to build a serious business also need a solid monetization strategy. Hillel Fuld shares three tips aimed at generating more clicks and — ultimately— more revenues.
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Most mobile app developers have realized that earning a living from their activities is no walk in the park. Not every app achieves the success of Angry Birds, Cut the Rope, or Fruit Ninja. Putting aside the issue of getting a mobile app discovered and downloaded, developers, especially on Android, are finding it increasingly difficult to generate any significant revenue from their apps.
App monetization is a huge challenge. Gene Munster, Wall Street analyst with Piper Jaffray, found that the vast majority (81 percent) of iOS app downloads in 2011 were free. In other words, the developer did not cash in on the download, which might explain the hardship many developers are experiencing.
Of course, there are other alternatives to charging users outright for an app. These include the most traditional and widespread form of monetization, mobile advertising, as well as in-app purchases. Another route is paid search advertising, which picks up on users’ keyword search terms to suggest apps that match.
Each of these options has its own challenges (and advantages), and mobile advertising is no different. Making the decision to display advertising in your app is only the first step. To wring real value out of this potentially successful app monetization strategy, developers also have to think through how and where these ads should be displayed to drive the best possible results.
Three quick tips
Indeed, developers need guidelines to follow as they make these tough decisions. The following is my pick of three quick tips on how to integrate ads into a mobile app in a way that will generate clicks and —ultimately — more revenue for developers.
1.) Relevant and targeted: If you have advertised on the Web or even dabbled in the world of traditional advertising, you’ll know the name of the game is ‘conversion.’ How many people see the ads and – more importantly – how many of them actually become customers. To drive CTR (Click Through Rates) in mobile advertising, you must be able to deliver the user the right and most relevant ad. In practice this means making sure a user in Japan is not presented with an ad for a sporting goods offer from a store in New York, for example. Likewise, a person viewing a children’s book app should not be served an adult advertisement. Targeting users based on factors such as location and the content they view is essential, and sure to increase the bottom line numbers of clicks, conversions, and overall revenue. A report by Amdocs in 2010 revealed that personalized, targeted ads are almost twice as effective as generic ads.
2.) Helpful and not annoying: The last thing users want to experience is an ad that prevents them from continuing whatever it is they were doing in the first place. If they are busy playing a mobile game, the ad should not interrupt the gameplay. Instead, the ad should appear at precisely the moment that it will actually encourage the user to engage with the ad. Displaying an ad between levels, for example, is one of these moments. Put another way, the ads you are serving should be relevant and helpful and — if implemented properly — avoid annoying the user. Integrate this thinking into your mobile advertising and monetization strategy, and you can greatly enhance the overall user experience.
3.) Integrated and well designed: Ads should be perceived as an integral part of the app in which they appear. An ad that sticks out like a sore thumb not only ruins the esthetic of the app itself; it will most likely not generate a click by the user. Let’s go back to my mobile game example. If the ad appears in the same color theme as the UI of the app, or if it appears on its own separate screen in between levels, then it is not a distraction. Instead, advertising has become part of the experience, encouraging users to engage and click the ad. This interaction (as opposed to interruption) boosts the developer’s revenue — and the enjoyment of the app user. But don’t limit yourself to just one ad format. An ad that has an interactive layer, which facilitates rich media such as video or HTML5, will be even more of an enticement for the user to click the ad.
Streamlining monetization
While these tips should help you to increase your success in generating higher CTRs and — ultimately — increase your income from your app, your work is far from done. There is still the task of getting your apps in front of enough consumers to generate a sustainable income.
Building your business and scheduling new versions of your app is tough enough. Managing the monetization of your app is like having a second business on top. Mobile advertising generally requires you to negotiate different commercial agreements with a variety of ad networks and agencies around the globe. This is a grind that requires time, which we know is equal to money.
Rather than manage relationships with a slew of mobile ad companies, developers can work instead with an app monetization exchange like inneractive. This approach can give you instant exposure to a global ad network and a ready-made ad inventory for your app. Since inneractive also makes this possible through a single integrated SDK, there is no need to write code for each different ad network
An app monetization exchange can help take the heavy lifting out of marketing your app, a task that is only going to get harder as apps go multi-screen, multi-device and hyper-local. To stay ahead of the game, developers will need to focus on managing their business, not their ad networks and creating apps that keep the users coming back for more. Get all this right and who knows, you may just end up with the successor to Angry Birds after all…
About Hillel
Hillel is Head of Marketing at inneractive and a well-known personality in the worlds of mobile technology and social media. In addition to his marketing activities with inneractive, Hillel works with Appboy, a leading mobile discovery engine on their dynamic web content and brand awareness. Hillel is a guest author for various sites including Mashable, Business Insider, Gigaom, CNN Money, and others. You can follow Hillel on Twitter (@HilzFuld).
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