How do Mobile Apps Earn Revenue by Ads?

Mobile apps are an inseparable part of our daily lives. Right from booking a cab to ordering food from restaurants, you have an app for every tiny thing you need.

Now, it is a well-known fact that there are paid as well as free mobile apps available on Google Play Store and App Store.

There is no need to think much about how paid mobile apps earn their revenue from but what about the free mobile apps? Well, one way that free apps make money is by advertising. It is one of the most commonly used way that app owners use for earning and it is taken care of by a 3rd party ad network.

Monetizing apps with ads is rather easy for app owners. This is probably why users get to see so many ads on free mobile apps. All app owners need to do is display ads inside the app and get paid per impression, per click and when an advertised app is installed by a user. Then there is the option of running an ad campaign to generate revenue.

However, it should be noted that to earn average ad revenue from mobile apps, app owners have to put in efforts to ensure that the apps add value to the lives of users. Only then the apps will be installed by more number of people resulting in more ad revenue. In addition to that, there is a need to analyze whether the ads are being liked by the target audience or not. This will decide whether the users will continue to use the app for a longer period of time or not.

Moving on, let’s have a look at the types of display ads that are used in apps for monetization,

1) Banner Ads

Banner ads are rectangular image or text ads that are of different sizes and are displayed on various areas of the app screen. These are found at the top and bottom of the screen most often. They don’t end up being a hindrance for the app user and are a good choice.

2) Interstitial ads

Unlike the banner ads, interstitial ads are pop-ups that use the full screen and are displayed at natural transition points. Users have to close these types of ads using the close button present at the corner of the app interface. These are the best to grab the attention of the app user.

3) In-app video ads

In-app video ads are popular ad revenue model. They are displayed automatically and are associated with an in-app reward. Users will get an incentive such as app currency for watching the ad and that currency can be used later for enjoying more features of the app.

4) Native ads

These are a natural part of the app interface and they blend really well with it. They promote a product or an app. These native ads are used most often these days as they are least annoying to users when compared to other ads that tend to disrupt user experience. In spite of all these benefits, the ad revenue earned from these ads is relatively on the lower side.

All of the above ad models are used widely by free mobile apps to earn revenue. You can find these in any free app that you open on your smartphone or tab.

What are Mobile Ad Platforms?

App owners need something called a mobile ad platform to get going with earning revenue from ads. By definition, a mobile ad platform is a mediator between advertiser and mobile publishers. In other words, it is a destination where advertisers buy ad spots that are delivered to mobile apps and websites.

As an app owner, you can manage the ads on most of the mobile ad platforms by creating your account. You don’t have to get in touch with the advertiser straight away because the ad platform lets you keep a track of the click-through-rates, impressions and the like.

Some of the best mobile ad platforms are the following,

  • Google ads
  • Facebook/Instagram ads
  • Bing ads
  • Ad Mob
  • AdColony

They help mobile app owners in monetizing their app in a rather easy manner.

The key mantra to watch your app grow is not limited to just getting several advertising campaigns. There is the need to acquire new users and keep them for a long period of time. If someone installs your app, uses it for a short while and then uninstalls it, you won’t benefit in any way. As an app owner, your user retention rate has to be high because the longer they stay the better for your revenue.

Apart from ad revenue, mobile apps earn from other monetization strategies and they include referral marketing, in-app purchases, sponsorship, crowd funding, email marketing and app merchandise.

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