Monetizing Mobile Apps: Android and iPhone

These days I am getting a lot of queries regarding Optimizing websites for Smartphone, running ads and generating revenue by iphone/android apps. First I analyzed is it worth doing brainstorming over these? Now I come to know that future is of Smartphone only. Soon my advance laptop would be struggling over Smartphone. However usability has its own pace. The point is if consumers are using any new technology then why not marketer. It’s not at all about competition. First move has always its own benefits.

After study I am giving a brief on Monetizing an application that you have made for iphone or android os Smartphone.

Why we need iPhone/Android application Monetization:

•If you’re serious about your App as a Business you need a robust strategy!

•You have a free app: so from where you will manage the cost…..?

•You need money flow to survive your app

•You need to be in ecosystem of user perception about your app related other things

•You want to earn

•You want to balance your Ad spend for App

•If you are making a shareware app

•You are an individual app developer and want pocket money

 

Identifying the most critical part of App Monetization

•Is it required to monetize the app?

–It’s a basic question. If your App is free the obviously answer may be in yes. But if your app is a paid one then you have to justify your app costing vs your ads placement.

•Which part of your app should be monetized?

–Once you decide to monetize your app then it’s too much important to identify that which part of your mobile App you need to monetize. In simple means where you want to place the Ads. We’ll discuss it further in placeholders.

•App Usability after placing ads

–We need to analyze the application nature and then identify the ads to maintain the usability of app even placing ads. It’s just like your app users should love the ads as well. It can be achieved via focusing on user engagement part with respect of your application.

•Revenue stream

–We need to identify if we want to use it as a main revenue stream as it’s pretty difficult in current scenario due to different type of market penetration. It also depends on app target audience. However in gaming arena it’s too common.

•App updates

–How frequent you update your app is again an important factor. If your update frequency it too high then your ad performance will also increase.

 

Identifying your App Placeholders

•Where we’ll place the ads?

–This is the most critical and ignored factor in Mobile App advertisement. As most of free applications are developed by typical developers they are least bothered about user behavior and marketing strategy behind that.

–The placeholder identification is just like dedication a most visible and important part of your app to a third party. Here we need to justify that is the place is worth to make few cents on every click.

–First we need to analyze that how users use our app. Until unless we know the real-time action of user on app we cant decide that. However we must have a projected desired navigation flow for an app.

–The placeholder should not affect your app quality as it would be potentially harmful for long life of your app.

–Ideally we should decide about advertisement section in an app first. It should be a bottom area or a square box within content.

–Most used sizes are square and skyscraper. However choosing a leader board will generate more revenue but it may increase the exit rate of your app.

 

Tracking your app usage

•To know how your application is being used by your users you should install a proper tracking mechanism.

•How it relates to monetization?

–Its simple. As I told previous that we should monetize only those section which can generate traffic as well do not affect the application quality.

–Hence we need to know the user actions, rate of page navigation as well as visible area effectiveness after scroll.

•If I need to pay for tracking, may I able to make profit out of monetization?

–Yes. And a good news that there are free analytics for apps as well. E.g. PinchMedia

 

Choosing right service provider or Ad Network

•There a lot of service providers or Ad publishers network which you can choose. But what if I talk about “right service provider”?

•Points to understand:

–Is the selected network provides ads in your targeted geography?

–Is that particular network has more users of selected Smartphone?

–Will that be compatible with your app?

–Will the ad guideline policies will be compatible with your users?

–Provided Ad sizes to qualify your placeholders requirements.

–Time to integrate or complexity of embedding ad module to your app.

–Revenue stream

•Below are the list of some big players in this arena that I feel are good to go with.

adMobMobClixSamaato  –Google Adsense (Beta)

MedialetsPinchMedia

Ad Market in a glance:

image

Calculating How much you can earn:

•Average eCPM is 0.40$. However it may high up to 4$ and lower like 0.09$ depends upon ad type and ad network.

•Now average CTR for an iPhone app ad is 1%-2%. However it may be high like 20% and may be low 0.2% or even 0.

•Now most important factor is how much app has been downloaded or could be downloaded in projected time frame and what will be average impression of ads?

•So the projection formulae would be:

–Impression × CTR × eCPM

•Consider my app has 2000 impressions per day and CTR is 0.7% and eCPM is $0.8. So placing the values in above formulae my income would be:

Income ≈ Impression × CTR × eCPM

≈ 2000 × 0.7% × 0.8

≈ $11.2

iPhone/Android Apps Ad Optimization process:

•Optimizing ad rotation cycle is the key to higher CTR.

–When the ad rotation cycle increased from 15 to 30 seconds, the CTR doubled and revenue increased by 20%.- A study on Bullpen

•Increase lifetime value of users by increasing session times.

–A similar app with many impressions may have a low CTR because of the short average session time.

•Use caution when introducing new ad units or ad placements within an existing app community.

–Study on BlackJack Game: App launched with only 300×50 ad banners. They faced user backlash when they later introduced the 300×250 ad size.

•Mediation layers increase revenue by achieving 100% fill rates.

–Free version with ads has generated far more revenue than the paid version with meditation layer- Study on DogWhistle Game

•Multiple banner sizes maximize an app’s revenue.

–The 300×250 ad size is shown less frequently than the smaller banner, but has a higher eCPM. So rotate as much as possible but be in application session limit.

•Ads that scroll or move along with the app generate a higher CTR.

–Changing from a fixed ad to one that scrolls with FML entries increased eCPM, CTR and overall revenue by more than 5%.- Study on F-Mylife

•A splash screen shows multiple ads without altering user experience.

–Three ads are displayed in splash screen in a way that maximizes ad impressions without alienating users.

–A house ad is always in the middle and third party ads are on the top and bottom. -A study on Touch Hockey-F5 Game

What will be the future?
In below chart you can see the worldwide applications available for iPhone/Android Smartphone. Now you can analyze how much profitable it could be or even you can project your revenue. These figure are few month old and application market is growing with a big-bang.

iPhone/Android Smartphone application category

 

For any further query or information or with valuable feedback you can always reach me at my e-mail: krm.amit@gmail.com or my skype/gtalk IM: krm.amit.

Wishing you a good luck if your going to try these apps monetizing methods.

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20 thoughts on “Monetizing Mobile Apps: Android and iPhone

  1. Amit, thanks for the well written and comprehensive post on mobile apps and advertising.

    I’d encourage you to take a look at our analytics package for mobile apps. In addition to tracking usage, as you mentioned, Localytics can also be used to track fill rates, click rates, ads per session, and what users were actually doing when they clicked on an ad. You can see these features in the live demo on our website: http://www.localytics.com.

    Regards,
    Brian

    • Hi Brian,
      I am thankful to you for providing such information. I’ll have take a demo tour of your analytics package. However I will request you send me something more to my e-mail ID to research on your application.

      Wishing you a good time.

  2. Wow, Amit, this is great stuff.

    I run a simple Internet Marketing Help site for new marketers.

    Can you recommend articles that will help my readers brand themselves and get a good start in their affiliate marketing business?

    Thanks,

    David

  3. Sorry Amit, but you failed in math pretty hard.

    2000 Impressions at 0.7% CTR and eCPM means, you get 14 Clicks everday which yield you a whole of 1.6$, not 11.2$.

    eCPM means: effective Costs per Mile. Reads: Average costs (for the advertiser or revenue for the publisher) per 1000 impressions.

    So if you have a eCPM of 0.8$ for 1000 impressions, you will have 1.6$ for 2000 impressions (double of 1000).

    So, 2000 impressions and 0.7% CTR is 14 clicks. Now, 1.60$ / 14 clicks = 0.114$ per click. Which is quite low and quite below what you’re used to get in Google Adsense for classical websites

  4. Hello, Mr. Amit Kumar Mishra. I’m a student of Keio Univetsity(in Japan) , who study Internet advertising. Now I’m searching for iPhone app advertisement.
    I have read your blog and it was very interesting.
    In your Blog, you wrote”average CTR for an iPhone app ad is 1%-2%”.
    How much is the exact average CTR for an iPhone app ad now?

    Takahiro Suzuki

  5. Let’s say my app has been downloaded by 1,000,000 people. How do I build a conservative revenue model for my business plan business plan as it pertains to generating revenue from the 1,000,000 downloads. What variables and formulas do I use to show potential investors the value of having 1,000,000 people on my mobile app platform. Assume they open the app at least once per month for at least 30 seconds.

    Please send your answer to fhy24@yahoo.com if possible.

    Regards,

    Franklin

  6. Hello quite nice website man, beautiful, everything is very good design articles, i’ll bookmark and subscribe for the feeds!Hi all there i discovered your own internet site using google while searching just for good read, and your content seem really fascinating to me!

  7. Nokia joins hands with Vodafone India and Bharti Airtel to offer consumers easy access to paid content… The benefits for the consumer are obvious: operator billing works for anyone with a SIM card, and recognition and sign-in is automatic. The benefit for developers is a vastly extended reach. If operator billing is combined with some sort of HTML5 app, you could, in theory, reach 3 billion HTML-capable phones out there.
    Airtel, vodafone tie up with Nokia is a new development in India’s mobile industry since these two operators have a huge market base in India; hence the opportunity for developers is also immense…
    Check: http://www.earnwithappsnow.com/?pcode=112&src=11&act=1

    Monetize your apps with millions of Nokia Consumers….

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