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You probably know that mobile advertising is growing at a rapid pace, but you may not know just how rapid that pace is. Mobile advertising is expected to double in 2011, and that trend only appears like it will continue for the foreseeable future. Because of that fact, if you're involved in branding or marketing you need to be working on your mobile advertising strategy. Beyond that, you need to spend some time thinking about how best to monetize an app. Understanding the "Freemium" model If you've followed the mobile app marketplace at all, you are probably well aware that the vast majority of popular mobile apps aren't actually ones that cost money. These are apps that are free to download and play. This is, of course, counter-intuitive, unless you make a comparison to a technology that's been around for a long time now: television. Think about how television advertising works (or at least how it worked for the over-the-air broadcasters for decades). People watch TV for free - just like people will download apps and play them for free. Advertisers place ads on TV, just like advertisers will place ads in mobile apps. That's where the TV show production companies get their money (and it's where companies that release freemium apps get their money, as well). Mobile advertising is booming According to Gartner, mobile advertising revenue is likely to double in 2011. It will go from about $1.6 billion during 2010 to nearly $3.3 billion during 2011. That means that the mobile advertising industry is booming. Some experts suggest that this is just the tip of the mobile advertising iceberg, and that in just five years we could be looking at an average of $50 billion each year being spent on mobile advertising. Much of that - in fact, the majority of that - will come via in-app advertising models. A model in decline The most direct and obvious way to monetize mobile application has historically been pay per download monetization. This model saw some strength in the early days of smartphones, but it's declining rapidly. Today, more than four out of five apps are free apps. This makes sense, when you think about it. When a customer first sees an app, one of the first things they are going to look at is the price. If there is a cost to the app, they're much less likely to download it. Unless the app offers something that they can't get anywhere else, even a 99 cent price tag is going to turn the user away. That single charge becomes a massive barrier. If there weren't other ways to monetize apps, it would be more popular, but as it stands it's declining and
it's likely to continue to decline. How free apps generate faster revenue In contrast, an app that doesn't cost anything is likely to get downloaded much quicker and has greater potential for revenue. There are plenty of options for mobile adds in an in-app advertising model. There are several major ad networks that can help to monetize the app. There are local ad agencies who will promote various companies and products via apps, as well. What this means is that your app can be an ongoing source of revenue. Instead of getting 99 cents when someone downloads the app, you have the potential to get 99 cents, then $2.99 a few weeks later, and then another 99 cents, and so on. The key is to find in-app ads that pay. You need to spend a significant amount of time vetting advertisers, and making sure that those mobile ads are indeed targeted toward your users. The better results your advertisers get from their mobile ads in your app, the more revenue the app is going to generate for you. What kinds of metrics to look for in a mobile advertising partner There are a number of different factors you need to look at when considering which mobile advertising partner to use with your app, including: • Global Fill Rate • Click-Thru Rate • eCPM Beyond those, however, you need to look at customer service metrics. Look at how those companies are able to integrate with your app, as well. You want ads that are going to be clicked, that are going to generate revenue, and that that fit with your app and your overall marketing scheme. The potential for mobile ads via in-app advertising is huge, and it's growing daily. If you want to make the most of your Smartphone application, it's time to take a closer look at this model.
Socialjitney is an iPhone Application Development Company providing app development services including iPhone Developers and iPhone app development.
Article Source: http://EzineArticles.com/?expert=Sam_Stephan
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