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Mobile App Revenue Model – Paid or Advertised?

The rise of App Advertising Revenue

The rise of Mobile App Advertising Revenue

Business Insider Australia has published a story about the rise of mobile app install advertisements, popup advertisements which encourage users to install other mobile apps.

According to Business Insider Australia, install advertisements are popular because it is easy to calculate the return on investment.

New and exclusive data from BI Intelligence finds that US mobile app-install ad revenue will top $US4.6 billion this year and grow to $US6.8 billion by the end of 2019, increasing by a compound annual growth rate of 14% from 2014. We believe mobile app install ads accounted for about 30% of mobile ad revenue last year.

The published revenue figures conclusively demonstrate that advertising is a serious option for monetising mobile apps, especially mobile app install advertisements.

Free apps definitely get more installs – convincing someone to click a button is much easier than convincing someone to spend some cash.

Both models have their advantages – for example, if your target audience is a specialist market, if your mobile app will be very useful to a small number of people, then it makes more sense to charge and upfront fee for your mobile app – generating revenue from advertising requires a large audience.

However, if your target audience is the general public, especially if you are competing with free mobile apps, there is a strong case for adopting an advertising model. It is difficult to convince people to pay for your iPhone app or Android app, if a competitor offers a very similar service for free, even if your app provides more features.

Then of course there is the Freemium model – a free app with optional feature upgrades which can be purchased. My advice, if you are building a Freemium mobile app, is make sure the user can perform all the basic functions of the app without paying. If you give users the impression you are being “greedy”, by asking for money every time they click a button, this can be a major turnoff, and can lead to users leaving negative reviews in App Store or Google Play Store.

If you would like to discuss the monetisation options for an iPhone app or Android App which you are developing, please Contact me for more information.

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