“Mobile Ads”: Here’s Why It’s One of the Worst Revenue Models

Wed, 06 Feb 2013 05:30:19 -0500
development, entrepreneurship, mobile-apps, revenue-model

Let’s get this right: mobile ads suck.

And if you’re planning to have that as your revenue model, you are throwing your app into a gorge unless it’s a really kickass application that people can’t do without. Chances of the latter being very thin in a very competitive world, today, it would be prudent to think of other revenue streams than mobile ads.

The Not-so-curious Case of Facebook Mobile

You’ve probably heard this a million times already but here’s it again: Facebook’s mobile monetization model was decreed “not-so-convincing enough” to encourage investors to turn the IPO into a massive success. Instead, it turned out to be a flawed scenario resulting in valuable lessons about mobile ads.

Facebook is one of the few popular companies that haven’t yet solved the puzzle of mobile revenue models. There are plenty of small-time developers and companies who are still struggling to figure out how their mobile apps can generate acceptably decent revenues.

Why Do Mobile Ads Suck?

1. Real Estate

First off, there’s this huge difference between a mobile screen and the desktop screen. There’s so much less real-estate on the mobile that the content itself is shrunk. Now, if you’re going to put some ads in between, on top, at the bottom or anywhere else, that’s going to steal under broad daylight very valuable space on the small screen. It drives people mad. We, as users, don’t like that at all.

2. Banner Blindness

People are getting used to banner ads. This is a generation that has seen a lot of banners in online advertising and we’ve grown immune to these. Mobile ads that aren’t disguised within the content – and that don’t provide relevant and intensive value – are easily filtered out and completely ignored. This is why there isn’t much to be made out of mobile ads as a revenue model (lower eCPMs)

Users are looking for a high level of value on the mobile platform than on desktop. The mobile being a very personal gadget, users have this subconscious feeling that their experience with any content (in the form of an app) shouldn’t be diluted, disturbed or contorted by ads.

Valuable content holds the key to connecting with your users and anything that mars this experience even by a tiny bit kills the chances of establishing a connection with your users.

With so many paid apps doing great, it’s clear that people prefer paying once to remove ads than to experience a free app filled with ugly ads.

There Are Many Alternatives

Sure, mobile ads do suck and mobile eCPMs are pretty weak compared to their desktop counterparts. But there are various other alternatives that you can think of. Some of these are being successfully implemented.

if you can provide a truly amazing app and then top it up with an essential feature that people can’t do without, you can try the freemium model. It takes time and experience to crack the freemium model but it’s worth it.

like Flipboard, you can promote a service/product through specifically targeted ads that are clearly demarcated from the content in a “usable” way.

Alternatively, you can use your app to promote a related product/service in your industry. Think of teaming up with other service providers.

From the users’ point of view, mobile ads are definitely not the way forward and if users aren’t going to be interested in it, you won’t find publishers either. Thinking of mobile ads as a revenue model? Time to rethink your strategy.

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