The Right Way to Monetize Your Free App In an over-saturated app marketplace, a user likely won't think twice about deleting a free app with intrusive advertising and moving on to a competitor.
By Sara Sisenwein Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
In the app business, it typically takes exceptionally high awareness and brand name recognition to actually get users to buy the app. However, with a free mobile app, companies have to generate revenue through advertisements, which often manifest in the form of disruptive third party pop-ups or prolonged pre-roll, creating major deterrents for regular usage.
If more companies learn how to appropriately monetize their free apps, they will retain more users and increase app usage. Proper integration of advertisements into the content of the app is key to avoid unwanted friction for users -- a feat that is absolutely possible but rarely witnessed.
To profit from a free app while retaining users can be done. Companies simply need to be more strategic with advertising options.
Here are a few tips:
Related: 3 Strategies for Winning In the Hyper-Competitive Market for Apps
Don't have ads that are disruptive.
Once a user has gone through the trouble of downloading and opening the app, half the battle has been won. Now an app has the opportunity to win over a user with unique, interactive content.
However, some mobile advertisements are so intrusive that users never have the opportunity to appreciate the content. For instance the pre-roll video advertisements automatically play and force the user to watch before they can access app content. These are entirely too long for the average consumer's attention span and typically serve as just another opportunity for the user to reconsider his or her interest level in the app. Pop-up ads, while on the screen for a markedly shorter period of time, are equally disruptive to the user experience. They are often difficult to exit out of and can frequently result in the user accidentally tapping on the ad and unwillingly being redirected out of the app altogether. Further, the accidental tapping of a pop-up ad also creates false data and can skew advertising metrics.
Integrate ads into the content.
To avoid having advertisements deter regular usage, ads should actually be relevant to the user and integrated into the existing content on the app. Native advertising should be a part of your strategy.
For instance, if I am using an app to organize my travel itineraries and tickets, I may not be interested in pop-up ads for a new dating site. It's possible that the ad could catch my attention, but it tracks far more logically to populate a travel app with travel-related offerings. In addition, if you can integrate the advertisements into part of the app content, the placements will be far less obtrusive to users who are not interested and may become far more compelling for those who are. The advertisements then become part of the app experience rather than fight against it.
Related: 7 Musts to Maximize Your Company's Mobile Strategy
Enhance the experience.
Advertisements aren't always a necessary evil. By utilizing placements more as sponsored content within the app, ads can actually enhance the user experience.
Returning to the travel app example, the user is far more likely to click on advertisements for hotels or cab services while navigating through the app. Not only does this provide valuable metrics for advertisers but could also create convenience for the user.
Other ways in which advertisements can benefit the user include giving the consumer access to exclusive deals or other real-world incentives, or having advertisers sponsor interactive quizzes or polls. Geo-targeting advertisements within an app can help increase engagement by displaying ads that are local to the user. Additionally, deploying remarketing tactics within your app can leverage ad content that the user has already shown interest in, further personalizing the experience.
In an over-saturated app marketplace, a user most likely won't think twice about deleting a free app with intrusive advertising and moving on to a competitor. In order to be successful, companies must simultaneously keep both advertisers and users happy. It becomes a precarious balancing act in which you cannot have one without the other. But for organizations that take the initiative to properly monetize a free app, the line that must be toed becomes much more navigable.
Related: 3 Tips to Help You Stand Out From the App Pack
