We have been wirting a lot on this blog about selling and making money from apps and how the two may or may not be the same. Furthermore we are strong believers in that In-App-Purchase poses a great chance for developers to actually create a business model that works – through upselling, selling virtual goods, selling additional levels, selling additional content etc. As a matter of fact, we did not really just come up with this point of view – many mobile experts view in-app purchase as a huge chance for app monetization and thus for the entire app industry.

But what do phrases like “finally a business model that works” or “a great chance for building a business around apps” actually imply? What about the other main business model around? We know you know what we mean: mobile advertising.

We do not want to argue that mobile advertising is not really working for developers (how could we), but it is pretty obvious that the industry is craving for additional (and alternative) business models. Despite the recent acquisition of AdMob by Google, Mobile Advertising just does not appear to be something that really works for app developers. To prove this, we would have to go deep into numbers which officially are only available to some extend. Additionally, we do not think this model is really broken. But basically, from an app developers perspective, there are only two things he or she should be worried about when using advertising in apps:

• eCPM or effective cost per thousand impressions: if this one sucks – it sucks.
• Fill rate: no matter how high the eCPM achieved on 5% of the traffic, if 95% of the traffic go unadvertised an app developer will have a hard time living from the 5 % actually filled.

 
So is using advertising in your apps a great way for you to make money from your app? If the answer is no (which is the feedback we get from many developers), at least one of the above mentioned points (if not both) doesn’t work out, yet. We know, the reasons could be plentiful (it’s a recession!) and we are hoping for advertising to be(come) a great way of making money for you. But right now, it just doesn’t feel that way, does it? Let us know if we are completely off track here.