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The key is to make the ad not seem like an ad... "People who bought this app also liked..." etc. ;)
It's definitely interesting. Look at ads in apps now. How many of those advertisers do you think would spend that kind of money on a campaign? Not...
Also, in addition to a mediation layer, it's critical to be able to geo-target ad networks. Some ad networks perform much, much better than others...
I actually wrote a fairly extensive blog post on how certain factors affect your app's search ranking. Check it out here.
