Mobile app promotion №11. App monetization: banner advertising

Alexander Sergeev

wrote this on Май 1, 2015

A lion’s share of apps is created for getting an income in the end. There are many ways of monetization. But the simplest and most popular one is banner advertising inside an app. What are the advantages? Which formats to use? Where to find advertisers? We’ll answer these questions in the article.

Pros and cons of banner advertising

Pros:

• a great part of mobile traffic is concentrated in the apps.
• more loyal attitude of users towards advertisements on smartphones and tablets.
• compatibility with the majority of app categories.

Cons:

• «burning out» of audience.
• unattractive banners.
• absence of traffic optimization.
• absence of transparent statistics.

 

Arranging banners in an app

You should foresee all the details of banner monetization beforehand, on the developing stage. For example, it’s better to think of where banners will be placed in the app and reserve a space for them. As for choosing advertisement formats, you should find a golden mean: don’t overload the app with advertisements, but don’t stake on the smallest formats. Here’s banner TOP by efficiency:

1. Dialogue banner format:

The most clickable and, correspondingly, the most profitable banner. But it’s quite hard as users may click “OK” out of habit.

2. Fullscreen:

The most popular banner among monetizers. It’s very profitable but annoying for users.

3. Native format:

It’s rather beautiful and organic format. It never irritates users. But CTR is 2 times lower on the average then of a full screen banner, for example.

3. Classical:

Now this format is quite popular on the market but it has low indices. Its prevalence is explained by the fact it’s classical. But the format is living its last days. In banner advertising there is a phenomenon called missed taps. There is a larger number of them on the smartphones as they have smaller screens.

 

Native advertising

Let’s discuss this format in details. It differs significantly from regular banners. It’s essence is to be invisible. The overwhelming majority of such advertising is built in the feeds. I.e. banners look like ordinary posts or messages but in reality they are advertisements.

The main advantages:

• they irritate users less.
• they show higher CTR.

 

Making money on absence of advertisements

It may sound paradoxical, but you can earn money by switching of advertisements. The essence of the method is that you can charge users for turning off advertisements in the app. Besides, developers usually upload 2 apps on the store: free one with advertisements and paid one without them. So users can choose which do they like better.

 

Payment schemes

There are several methods of payment for advertisements in apps:

• CPM.
• CPC.
• CPI.

Today CPC is the most relevant. 95% of market use it. Risks are moderate and almost equal for both the parties. Platform owner may lose due to low clickability (for example, unsuccessful arrangement or a low quality banner). There’s no low CTR risk for advertisers but there is danger of small install per cent. You can solve the issue by traffic optimization. The demand for such an advertising is sufficient so the model is beneficial for everybody. Besides, this scheme is transparent and safe.

 

Where to search for advertisers?

Many monetizators encounter such a question. For the present moment there are 3 completely different ways:

• direct source (advertiser) — this way is suitable for big publishers only.
• Google AdMob — it’s a service-monopolist. That’s why the prices are rather low. The only advantage is a big demand.
• mobile traffic market — the most profitable way: they give a good income and, as a rule, they provide a convenient interface with flexible setup. But it has some disadvantages. For example, they don’t optimize traffic, i.e. they don’t choose advertisers beneficial specially for you.

 

How to arrange a banner?

You should build in a special code or SDK to the app. Usually a market will provide you with all the necessary data and give you detailed instructions on how to build in advertisements into your app. It means you don’t have to be good at developing for that.

 

Conclusion

Banner advertising is one of the most profitable ways of app monetization. It’s simple and convenient. It suits for the majority of app categories and needs minimum of work expenses from a developer or publisher.