The Beginner's Guide to Monetization With App Ads (sensortower.com)

Example of an InMobi AppGallery

When it comes to monetizing an app, you basically have three option: in-app purchases, running app ads and charging upfront. There are several different variations and combinations of these monetization models, but those are the general categories.

For the most part, the apps with the highest revenue are free with in-app purchases. But that may not be the best thing for every app in every category. There are certain situations when running ads can be a good way to make some money from your app.

If you are interested in monetizing your app with ads, this post will teach you some basic terms and situations where it makes sense to use ads. Then we will show you some of the ad networks that are out there and how you can get started.

When To Monetize With App Ads

The bottom line is that you are only going to make a decent amount of money with ads if you have a lot of downloads and people use your app often. If users don’t open your app often, you are probably better off making money through in-app purchases, or charging upfront.

Ads can also be a useful way to get people to pay for your app. You can have a free version that displays ads, but if users pay for your “pro” version (or whatever you call it) the ads are removed and maybe they also get access to additional features.

If you have an app that you are not already monetizing, then inserting ads is an easy way to get started. It doesn’t cost you anything and it can fill the gap until you figure out something better. If one of these scenarios sound familiar, then here here is a crash course on mobile app ads.

Terms To Know

There are different ways that advertisers can purchase ads. You need to know these terms to understand how you will get paid and which pricing model works best for your app.

• CPM (Cost Per Thousand) - In this model, the advertiser pays a certain amount of money for every 1,000 times their ad is displayed. You get paid a percentage of that payment, as the publisher.
• eCPM (Effective Cost Per Thousand) - This is calculated by dividing total earnings by total impressions (in thousands).
• CPC (Cost Per Click) - Just like Google Adsense, you get paid the going rate for every click (or tap) that you deliver from your app.
• CPI (Cost Per Install) - You are paid a certain amount of money per installation. Usually a higher payout than the other models.

The Different Types Of Ads

In order to understand what you will be displaying, here are some of the basic types of ads. There are others, but these will get you started.

• Banner - These are the ads that you are familiar with. Just like on websites, they usually appear at the top or the bottom of the app screen.
• Interstitial - This type of ad comes up during transition points in the app, such as between levels or at launch.
• Video - A short video commercial for a product that pops up in the app.
• Dialog - This is usually a box that pops up in the app asking the user to check out the app or website of an advertiser.
• Offer Wall - A single in-app interstitial that displays multiple promotional offers at the same time.
• SmartWall - A interstitial ad that automatically displays the optimal ad format (rich, AppWall, Video, etc.) based on ad inventory, data connection and other factors.
• Rich Media - Interactive ads that can do different things, based on user input.

Ad Networks

Now let’s look at the different ad networks that are out there. We will start with the big ones, then list others that you might want to check out.

iAd

Naturally, Apple and Google have the largest ad networks when it comes to apps. The general consensus is that iAd pays a little more than Google’s AdMob, but individual results can vary. You can target ads based on demographic information and you get detailed reports on how your ads are performing.

AdMob

Build a great app business with AdMob

Once you install the Google Mobile Ads SDK, you can choose where the ads will appear in your app and which ones you want to display. When users tap on the ads, you get paid. It works on Android, iOS and Windows.

RevMob

RevMob works on iOS, Android and Amazon apps. You get paid for both clicks and installs of free apps. It just takes two steps and the installation is just two lines of code. Many developers say that they have the highest eCPM’s of any ad network.

Others

Here are some other ad networks that you may want to check out.

• Play Haven - Deliver targeted, relevant promotions in your game.
• Flurry - Also well known for their free analytics platform, Flurry AppSpot sets up in 10 minutes and provides takeover, banner and video ads.
• Chartboost - An ad platform that specializes in games, providing direct deals and cross promotion opportunities.
• Tapjoy - Specializing in helping people earn in-app rewards for installing apps, subscribing to services, or watching videos.
• Aditic - Provides rich media and video ads for the Java, iOS, Bada, Android and Blackberry platforms.
• Admoda - Provides ads for Android and mobile sites.
• Madvertise - German ad network, specializing in premium mobile advertising.
• Smaato - Boasts real-time ad bidding for mobile ads. Available for every major app platform.
• HUNT - An independent ad company that targets the Spanish speaking market. Provides ads for Android, iOS, Blackberry and Windows.
• MobPartner - A cross platform solution that supports all performance based solutions.
• InMobi - Native ads solution that provides AppGalleries.
• Kiip - Provides users with real or virtual rewards. Works with iOS, Android or web apps.
• Mobfox - Monetize through direct sold ads, mediation ads and the RTB exchange.
• MoPub - Provides ad transparency by showing which advertisers are winning and which ads they are showing.
• mMedia - Self-service mobile advertising.

Conclusion

If possible, you should start with your monetization strategy in mind before you even build your app. Also take into account the platform you will be displaying ads on. An iOS ad can look very different on Android, or those other mobile platforms, so be sure to double check it for a consistent experience.

Be sure to still keep the user experience in mind when you install ads. There is a fine line between being mildly annoying and overly disruptive.

Finally, just like anythings else, be sure to test different approaches and find out what works best for your app. These are just a few ideas that can start you on your way to maximizing the amount of income you get from your app.