Determining how best to implement advertising in a mobile app can be a tricky business. Hold back and your revenue trickles in too slowly. Go overboard and users abandon your app altogether. That’s the challenge a wide range of companies face when distributing mobile applications to the world.Mobile ads

Facebook, with one of the top downloaded apps for both iOS and Android, is currently navigating that difficult road. The Wall Street Journal reports that the social network giant is preparing to launch a new type of advertising that targets customers based on what other apps they use.

The approach works by leveraging Facebook Connect, a feature allowing users to log into other services with a Facebook account. Data gleaned from tracking that activity gives Facebook valuable information about what its users are interested in –and what ads might appeal to them in their News Feed.

It isn’t the first controversial ad strategy Facebook has employed. The company is currently in talks to settle a lawsuit regarding “Sponsored Stories,” user posts that get repurposed as ads when they mention specific products or websites without the express consent of the user.

Neither is Facebook alone in using questionably intrusive advertising targeting tactics. Mobile security firm LookOut Mobile says that more than 80 million apps with invasive ads have been downloaded, or about 5 percent of all free apps on the Android platform. These apps can harvest data from phones or surreptitiously install other software in the background.

"Aggressive ad networks are much more prevalent than malicious applications. It is the most prevalent mobile privacy issue that exists," said Kevin Mahaffey, LookOut's technology chief and co-founder, in a Reuters interview.

Even ads that don’t pick through users’ personal information can take a toll on devices. A study from Microsoft and Purdue University showed that up to 75 percent of an app’s power consumption can come from the communication required by the advertising. Whether the ad software is transmitting your contacts back to a database or simply fetching a new banner image, that’s a huge drain on your battery.

It’s possible to make money from a free app, even with advertising that doesn’t intrude on users’ privacy. Concentrating on delivering a satisfying experience will lead more people to use your app, allowing your ads to be less intrusive and still profitable.

Tags: advertising and mobile, facebook connect, lookout mobile, mobile ads, sponsored stories