Mobile application monetization is a major concern for any mobile app developer. After all, if you can’t make money with app development, how can you make a living? A while ago, monetization seemed to be a mystical practice involving voodoo, code, and “internet marketing,” whatever that is. But now it’s pretty obvious to anyone in the monetization game that if you want to make money, you have to sell something.

Luckily, mobile application monetization doesn’t mean you have to sell your own app. Yes, that’s one way to do it, but since thereare so many free apps, it’s also one of the hardest. To make money in the mobile app world, one of the best strategies is also one of the oldest: advertising.

How Mobile App Advertising Works

Technology has certainly changed the world, but some things have stayed the same. Advertising and marketing have always been very important, and they probably will be always. Though you can still see billboards and print ads, online advertising – particularly mobile advertising – has jumped into the spotlight. And this is one of the most effective ways to monetize an app.

Yes, it’s true. Mobile ads aren’t just for Facebook anymore. Through in-app advertising, you can release a product, free of charge, and still expect to make money from it. Each mobile ad you place in your app can contribute to ongoing, passive revenue.

By setting aside some screen real estate to place ads, you can earn revenue each time users click on the ad. AdSense, Google’s ad platform, offers revenue to software publishers and developers based on two sources, cost-per-click (CPC) or cost-per-thousand-impressions (CPM).

  • Cost-per-click generates revenue each time users click on an ad. The amount of money you earn is determined by many factors, including the bidding price for the keywords in question, the competitiveness of the niche, and so forth.
  • Cost-per-thousand-impressions generates revenue each time an ad is viewed one thousand times. The income for these ads is also based on bidding price and how competitive that niche is.

If you’re a developer, you’ll be able to integrate any ad code into your app in no time. And if you already have a user base, you’ll be able to start pulling in some money right away.

Strategies for Mobile Application Advertising

What is it you hate most about ads? The answer to that question will give you some insight into best advertising practices. Assuming you already have a good product that keeps users engaged, you’ll need to develop an advertising solution that works with your app instead of against it.

An effective mobile application monetization strategy should be holistic. Your app should be affordable, useful, and easy to adopt. The easier it is for someone to pick up and start using, the easier it will be to keep them involved with your app…and that means more ad exposure time.

But try not to let ads detract from your app. There’s a tipping point where obnoxious ads can outweigh the value of the app, so you want to do everything you can to stay below that line. Instead, try to create ads that work with your app. The more seamlessly you integrate ads, the higher your conversions – and ultimately your income – will be. 

Other Strategies for Mobile Application Monetization

If you’d like to try something else, here are other options for monetization.

  • Freemium apps are apps that allow users a partial version of the app, and offer optional in-app purchases. Premium content for content-driven apps, access to more sophisticated features, or in-game currency are examples of in-app purchases that can generate recurring revenue. This method is quite popular, but very few people commit to in-app purchases: people generally download a free app because it’s free, not because they wanted to pay for something.
  • Paid and subscription monetization methods are in the minority, but they can work for apps that offer a lot of value. You’ll have to overcome the thrifty app user’s barrier to buying, but if you can do that, this is one potential income model.
  • Affiliate-based revenue models can be extremely lucrative, but in many cases, the entire app must be designed around an affiliate transaction. An app that earns a commission from each travel deal, such as Hipmunk can bring in major money. But if you already have an app, you may have to be somewhat creative to discover ways to integrate affiliate marketing into the app.
Mobile application monetization strategies aren’t too mysterious, and with a little research, you should be able to find a solution that works for your app. Advertising is certainly the most popular, because it’s easy to implement, there are many players involved in the industry, and it actually works. In the end, though, there may be a few different monetization solutions that will work for your mobile app. To find out the best solution for you, research, implement, and test.