More mobile apps are appearing on app marketplaces with each passing day, but despite the enthusiasm for mobile apps among consumers, the media and the app developers themselves, many app developers are struggling to find a way to make money from their creations. Unless your app is one of the most popular apps in its category on the app marketplace, it can be difficult to cut through the clutter and actually earn a profit.
App developers need to give some thought to their mobile advertising business model as well as the code and design of their mobile apps. Following is a high-level summary of how app developers can make money from mobile advertising. For a slightly more in-depth analysis of how to drive more money from your apps, see our How to Make Money with Mobile Apps series of articles on our corporate blog at Placeplay.com.
- Integrate a platform like Google AdWords to monetize on PPC traffic: Google AdWords is one of the most widely recognized ways for companies of all sizes to engage in search engine advertising by targeting specific search keywords and reaching customers who are searching for information relevant to what your company provides. But Google AdWords are not limited to the “old world” of desktop PCs; Google also offers mobile advertising solutions. Make sure you’re reaching the widest possible audience for your app with relevant search engine advertising tailored to the mobile environment. As of the end of 2012, more people will be accessing the Web via mobile devices than with desktop PCs. You can use mobile search advertising to find new users and get more downloads for your app.
- Build a network to serve your own house ads and promote your other games: One of the best ways to promote your company’s apps is to use house ads to cross-promote apps to your existing audience. People who downloaded one app from your company will be more likely to download a second or third app – but you need to extend the invitation and let them know that your apps are out there. Most in-app ad distribution networks give you the ability to serve house ads (free ads that your company can use to promote your own apps) whenever there is a space available, or as a fixed percentage of your total advertising inventory. So out of a certain number of page views of your app where mobile ads can be inserted, you can arrange to have a certain number of those spaces reserved for house ads.
- Ask for upgrades: For most app developers, giving away the app as a free download is the best strategy, since it can be hard to get people to commit to paying for an app. But once you have gotten your audience to download your app, you can use house ads to invite them to upgrade to a paid version, or to buy premium features or virtual goods (for example, special tools, badges or experiences as part of a game). House ads can be used not just to promote your company’s other apps, but to promote paid versions of the same app that the user is already engaged with.
- Use affiliate marketing: In addition to charging money for apps or selling advertising on a CPC basis, a new trend in mobile marketing is to use affiliate marketing to pay third parties to help achieve app downloads and sales. Affiliate marketing is nothing new – it’s been a popular method in online marketing for several years. But what’s different about mobile affiliate marketing is the method of payment. Mobile affiliate marketing typically pays on a CPA (cost per action) basis, where affiliates can earn a fixed payment per new download or a percentage of revenue. Consider affiliate marketing as a way to forge new alliances and help other app developers help you – but be sure to assign a value to your own affiliate payouts that is commensurate with the value that your company is receiving. What is a new download worth to you? Also, think carefully about which developers you want to serve as an affiliate for – make sure you have apps that are well-aligned in terms of content and audience, so that your affiliate offers appear relevant to your audience and do not drive people away.
What’s your take on this? What is your preferred mobile advertising business model? What do you see as the shortcomings and advantages of paid apps vs. in-app advertising?
About Ryan Morel: Follow @ryanmorel