Advertising has always been a source of revenue for companies. Sometimes advertising supplemented subscription revenue, and other times the entire business was funded almost solely from advertising. The latter model is how open-airwave broadcasters made money in the past.
An advertisement-only business model is especially useful on the Internet, where people demand content for free. With a global landscape of competition, someone is always willing to offer a product for free, as long as they can generate advertising revenue.
Related article: The Life Cycle of Online Ads: from User Preferences to Ad Revenue
Not only that, but mobile computing has grown rapidly since the inception of the iPhone in 2008. According to Pew Research, more than 50% of Americans have a tablet, and nearly 80% have a smartphone. They're also spending considerable amounts of time engaging with those apps every month.
Assuming you've decided to implement advertising for at least some of your app's revenue, what should you consider in your build?
Ad placement and type
The first thing to consider is where you will place your advertisements. This applies to both spatial and temporal placement. Will you use interstitial advertisements, such as between levels of a game? If you don't have transitions, such as an English-Korean dictionary, there is no suitable place for interstitial advertisements. In this latter case, it is better to have thin banner advertisements that display continually along an edge of the app.
Do you want banner adverts to expand to full screen after every 5 word lookups? Or every 10? Do you want to expand to full screen at all? It might be attractive for higher-paying advertisers, since they can reach a captive audience, but it might also alienate your users.
The type of advert you choose will impact your placement decisions, too. Video advertisements are certainly better interstitially, while push notifications might be best periodically throughout the day. You might also use different styles for different parts. If your app is a productivity app with a news feed, you might have banner adverts in the personal section and native advertisements in the news feed section.
Balance your needs and your customers' comfort
There are plenty of apps that become nearly unusable because there are too many ads. You will need to balance your revenue needs with the number of ads you display, especially if you use adverts that interrupt usage. Non-invasive banner ads may display continually, but you obviously cannot show a video every few seconds. For the latter type, it is especially important to keep data caps in mind too: not every customer has unlimited data, and many low-cap users will immediately delete your app if a video advertisement sucks up 5 megabytes of data.
Also avoid being too annoying. No one wants 20 notifications from an app when they wake up or finish work. If half of those notifications are simply advertisements, you risk distancing your customers and losing their trust.
Use the right tools
This is important for your sanity. Plenty of tools exist to keep you sane. Just on development, there are multiple SDKs for platforms, and if you want to develop for the widest audience, you will need to manage all of them. Then there is the advertising revenue management. And the analytics management. And the marketing management. Having the wrong tools will frustrate you, eventually leading to product breakdowns and frustrated customers.
Developers are intimate with testing. Non-developers may believe most developers spend their time pounding away at keyboards to write thousands of lines of code. Developers know they spend most of their time staring at code they wrote two days ago trying to figure out why it isn't working.
Testing doesn't vanish once the base product is finished. You need to test your advertising scheme. One trap developers often overlook is advert timing. If users move through your app faster or more frequently than you anticipated, they will be served ads much more than you intended. This simple oversight leads to dissatisfied customers and negative reviews.
You also want to make sure your ads are excitable from various devices (nothing raises a user's blood pressure faster than an interstitial advert that places the exit button off the screen). And they should look good on every display. With so many devices available, you need to test a lot to avoid leaving out some customers.
Related article: QA Engineers: What Are They Doing?
Consider alternative sources of income
In-app advertising is highly prevalent. Many apps derive 100% of their revenue from advertising. However, this is akin to the proverbial egg basket: you shouldn't completely rely on a single source of income. Consider other avenues of revenue, such as in-app purchases or an upgraded version that completely removes adverts for those willing to pay.
In fact, the app revenue landscape suggests in-app purchases make up the vast majority of non-advert-based revenue, while paid installs and subscriptions are a very small portion. Keeping this in mind, carefully consider your route to diversifying your revenue streams.
If you're more of a visual person, you can see all of this in an illustrative infographic below.
This is a guest post by Nick Andrew Rojas. Nick is a self-taught serial entrepreneur who has worked with various startups as a business consultant. He's also a journalist focusing on technology, marketing, and social media. He loves meeting new people online and being challenged with new projects. He loves to connect, so reach out on Twitter! @nickarojas.