Is it reasonable to give a user an option to either purchase the full version or click on an advertisement to unlock a feature in the application. From my understanding, AdMob pays based on clicks, not impressions. Also is it possible to listen for ad clicks in Android?
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You do need to carefully read your agreement with the advertisement provider. For example, I know that Google Adsense would not allow this. I admit this may not apply to AdMob (of whom I have no experience) but for those who find this question some time down the line, read the fine print. Here's the part of Adsense's Terms and Conditions I'm thinking of (Section 5):
Aside from breaking Terms and Conditions, your users may still not click on them. New study has some interesting numbers to keep in mind...
From the AdMob terms of use available here
You should not ask your users to click on the advertisement. It's against the terms of service.