If you’re a developer planning on releasing an Android app you’re probably already fretting about how you’re going to monetise it.  If you already have an app or two launched you’ll be thinking of ways to increase your revenues.

When it comes to market share, Android has been surging ahead of all of all other platforms for months now – it currently accounts for 48% of the global smartphone market. But questions still remain on just how much money developers can truly make on the Android platform – is there really revenue there to match the users or are you still better off focusing on the iphone platform if you want commercial success?

While the iPhone’s market share hovers at around 19%, it’s profitability – for both Apple and app developers – continues to grow. It’s a well known fact that iPhone users spend more money on apps than Android users.  According to investment banking firm Pipar Jaffray, Apple’s App Store has earned around $4.9 billion in gross revenue for paid apps to date, whereas Android is estimated to have generated just $330 million.

It’s not that hard to understand the reasons behind such a discrepancy. Android has gained its share chiefly by attacking the lower end of the market with budget smartphones, whereas Apple has steadfastly refused to drop the iPhone’s premium price tag. It stands to reason that iPhone users will generally have more disposable income to splurge on apps than Android users.  Another factor that has lead to the slower development of paid apps on Android is the reliance on google checkout for billing, which has far lower penetration among android users than itunes accounts did for iphone users.  Finally, the Android marketplace’s more ‘open’ nature, with lower barriers for app developers has meant that free apps have been able to proliferate on the platform in a way that the higher quality and submission barriers of the Apple appstore have helped to hold back.

However, this discounts one little thing – advertising revenue. While paid apps appear more viable on the iPhone, there’s been little comparative research on apps that focus solely on advertising. Moreover, the pace of Android’s growth has been so quick that advertisers are only now beginning to get the full picture and realise just how much reach the Android platform can give them.

Be under no illusion, there’s definitely money to be made by Android devs willing to embrace advertising in 2012. So with that in mind, here’s a few tips to get you started.

Android App Advertising: How to make money

Think ‘advertising’ from the ground-up

When devising your app think about the revenue model before you write the first line of code. Who is going to use your app? What geographical region will it flourish in? Think demographics and then square that with a bit of research on what kind of user is more receptive to online ads – there’s plenty of info out there to spark some ideas.

Think practically in terms of potential revenue earned through advertising, vs time spent developing the app (are you better off developing two less time intensive apps instead of one more complex app?). Also think sensibly about what users will be doing with your app. Will they be using it mostly offline? If so it’s going to be pretty useless from an ad-revenue perspective. Will the user be encouraged to spend their time staring at a widget on their home screen, oblivious to in-app banners? Ditto.

Research mobile ad-networks

You’ve probably heard of Admob, but there are lots of other ad networks out there. Some of them are specialised for certain geographical territories, some of them have feature above and beyond Admob, and some of them are solely dedicated to the Android platform. So it pays to do your research to ensure you’re not missing a trick – you can start with our own round-up of mobile ad networks right here.

Use a combination of mobile ad-networks in your android app

It also pays to take a pluralistic approach and combine ad networks to maximise your revenue. The following strategy is inspired by MoonBeam Development’s excellent guide ‘Making Money With Android‘.

• Use Google Admob to deliver in-app advertising (banner ads that appear at the bottom of the display).
• Combine this with Pontiflex, which streams advertisements before the app loads. This is more intrusive but can reap high rewards. Pointiflex works by giving users three or four special offers, which they can sign-up to. Pontiflex also allows you to request user information such as email address, name and postcode – valuable marketing data.
• Use dedicated Android network AirPush to monetise inactive users. Remember what we said about widgets? Well AirPush gets around this issue, and the problem of users who don’t engage with traditional banner ads, by delivering push advertisements to a user’s notification tray. The user doesn’t even have to click on the ad for you to get paid, they just have to agree to allow the ads to be streamed.

Lead Bolt

Or you could cut out the mutliple partners and go with Android network Lead Bolt, which combines many of the above features offered by separate ad-networks into one package. So you’ve got push notifications, data capture forms, and other features such as content blocks. It’s well-worth checking them out.

StartApp

If you want to squeeze even more money out of your app, then StartApp lets you add a further layer of monetisation. StartApp basically embeds a piece of code into your Android app, which creates a search tool on the user’s home screen. When a user conducts a search with this tool, StartApp gets a a cut. This allows StartApp to pay you every time your app is downloaded. While it sounds great in theory, we wonder what the blowback will be like from users who didn’t expect to be downloading a search tool along with their app… proceed with caution!

Cross promotion

This won’t directly increase your revenue, but if you have more than one app in your portfolio you can easily cross promote them by either pulling your own web ads, or by running a solution like Admob’s House Ads feature. It’s also worth networking with other developers and seeing if you can cross promote your apps together.

 Green pastures…

So there you have it – those tips should be enough to get you started. Like we said, Android is only going to grow in 2012 and the vast majority of that growth will occur in the budget end of the market. With a user base of shallow wallets, and a reach that blows everyone else out of the water, Android app monetisation will continue to focus on advertising. If developers want to make money, they’ll need to get to grips with this.  Afterall, we’re talking about a Google product!

Are you an Android app developer using advertising to make money with your app?  Share your experiences in the comments and we’ll give you a shout out in the post.