September 26, 2022
3
min read
App Monetization

Mobile App Monetization Strategy: In-App Advertising

The Big Idea: There are many different ways to monetize your app, but video advertisements are by far the most popular... and expensive. The beauty is that inBrain has created integrations that offer survey monetization that have the same dynamic placement of video ads while costing exponentially less to produce.

Before mobile apps hit the scene, advertisers used traditional methods like television, radio, and print ads to reach consumers. But as people increasingly turned to their phones and tablets for entertainment, information, and communication, advertisers had to find new ways to reach them.

One solution was to start placing ads in mobile apps. App developers could get paid for displaying ads in their apps, and advertisers could reach a new audience of mobile users.

Advertisements can be very lucrative and have neither the upfront cost barrier that paid apps do nor require an app designed around premium features. Countless app publishers have successfully turned to in-app advertisements as their monetization strategy - and have made a lot of money in the process. That said, there's always two sides to every story.

Will Advertisements Work Well for My App?

Let’s face it, poorly implemented advertisements are distracting and can negatively impact the user experience. You've likely experienced the frustration of accidentally clicking on an ad while trying to use an app - or having to wait for an ad to load before you can continue using the app.

However, if implemented strategically in a non-invasive way, they can be very beneficial and profitable. Running advertisements does not mean that you have to sacrifice your user experience or user interface if done wisely. Let's consider some of the pros and cons of in-app advertising.

The Pros and Cons of In-App Advertising

Pros

  • No initial cost barrier for users to download the app.
  • Continuously generates revenue per user compared to a one-time fee.
  • Developers can use this strategy in combination with other monetization strategies (like in-app purchases).
  • Utilizing rewarded ads to keep your users engaged and give back benefits.
  • Ad platforms make it easy to implement ads into your app.

Cons

  • Advertisements have the potential to disrupt your user experience and user interface if the ads are invasive and not placed in strategic locations
  • Advertiser’s eCPM (effective cost per mille – the amount an advertiser will pay you per one thousand ad impressions) is relatively low compared to the average revenue per user offered by other monetization strategies. The user may have to see the same ad multiple times before they take action.
  • Ads need to be updated regularly, which requires additional time and effort from the developer.

While consumers have a love-hate relationship with advertisements, the fact is that they work. Advertisers are willing to pay good money to reach consumers through mobile apps, and app developers can take advantage of this by incorporating ads into their apps.

The Different Types of In-App Advertisements

There are many different types of advertisements and you have the freedom to pick which ad partners you want to team up with. You should consider the following when designing your ad placements in your app:

  • Does the ad reduce user experience? If an ad is too invasive or interrupts the app flow, you might be sacrificing user experience, which does more harm than good if a user gets frustrated and leaves your app. You should always err on the side of caution and avoid intrusive ads.
  • What size ad do you want to display? Ads come in all different shapes and sizes. You can choose a full-screen that takes up the entire screen or a smaller banner ad that is less disruptive.
  • What type of ad do you want to use? There are many types of ads, from simple banner ads to more interactive rich media ads. You can even offer rewards to users for watching an ad.
  • Do you want the ad to be static or dynamic? A static ad does not change, while a dynamic ad will regularly update with new content.

One commonly used solution is to allow users to remove advertisements in your app in the form of an in-app purchase. While this works well, this does not mean that the ads should be intrusive to the point that the app is unusable without this feature, leading most users to lose interest in your app very quickly. The goal is to strike a balance where advertisements are still noticeable but not intrusive.

Choosing the right ad network is also essential. There are many different ad networks, each with its own strengths and weaknesses. When choosing an ad network, you should consider factors such as eCPM, user demographics, and ad quality.

Here are some of the most common ad types for in-app advertisements:

Banner Ads

Banner ads were one of the first ads in apps. It was the quickest and easiest way to monetize. These ads are typically pop-up ads or ads that stay on your app's interface and come in different shapes and sizes.

Although this is a solid way to monetize, it’s important to note that banner ads can be disruptive and annoying to the user. In some cases, poorly-designed banner ads can make your app look unprofessional at best - and unusable at worst.

Interstitial Ads

While banner ads are designed to “stick out” on content, interstitial ads are meant to flow seamlessly when navigating through the app.

Interstitials are typically large pieces of ads displayed when there is a pause in content. For instance, many appear when the app is loading or at the end of a level. When shown at strategic locations, interstitials are non-disruptive and do not distract your users from your in-app experience. This offers a better user experience, which can lead to more conversions.

Rewarded Ads

Have you ever played a game and lost a life - only to find the app offers you the chance to watch an ad to continue playing? That’s a rewarded ad! Rewarded ads are non-intrusive and give users the choice to watch an ad in return for a reward, such as in-game currency or extra lives.

Rewarded ads are great because they create a clear value of exchange between the user and the app publisher. Implementing rewarded ads allows the user to control if they want to interact with an advertisement in return for a reward - which can increase desire.

The reward can be anything from jewels, coins, extra lives, or in-app currency in a game that helps the user progress. Typically, this kind of ad displays longer, more engaging ads that have higher revenue than other ads. This is possible because users opt-in rewarded ads and are therefore more willing to engage for more extended periods.

When using this strategy, it is essential to remember that the user has control if they would want to interact with your ad in exchange for a reward. For example, a user can choose to watch a 30-second video ad to receive a prize. However, they can also choose to ignore the ad if the reward is not worth their time.

Video Ads

Video ads can come in many different forms and shapes. They can be 10, 15, or 30-second videos and be skippable or non-skippable. These ads can be variants of interstitial ads and appear when your app is loading.

Skippable video ads are usually longer videos, and un-skippable ads tend to be short, digestible videos. This ad format usually has higher eCPMs than other ad types because they are more engaging, and the user decides how long they want to interact with the ad.

It is important to note that video ads must be high quality and offer value to the user. If your video ads are low quality or disruptive, it can discourage users from interacting with your app again in the future.

If you want your users to stay engaged with the video, you can implement rewarded video ads. For instance, in exchange for watching a 30-second video, your user can get in-app currency.

Native Ads

Native ads are designed to be implemented inside your app - allowing a user to interact with the ad while maintaining a seamless experience. This means that the ad must be well-designed to match the look and feel of your app while also being relevant to your app's content.

This is one of the most challenging ads to design, but when done correctly, can generate a high level of engagement from users. The key is to ensure that the ad is designed to match the look and feel of your app while also being relevant to your app's content.

One way to design a native ad is to use a "storytelling" format. This involves creating an ad that tells a relevant story to your app's content. For example, if you have a game about cars, you could create an ad about the car's history. This would be a well-designed native ad that is relevant to your app's content and would be of interest to your users.

Which In-App Ad Strategy is Best for You?

There is no one size fits all ad strategy that works best. However, the best one for you and your users are ads that do not interfere too much with the user’s experience. Consider what ad format would work best with your app while also providing a good user experience.

Interstitial and video ads can be disruptive to the user experience and if not done correctly, can discourage users from using your app again. Rewarded ads offer users a clear value exchange and are non-intrusive, making them more palatable to users. Native ads are the most difficult to design, but if done correctly, they can provide a seamless experience for users.

It is crucial to test different ad strategies to see which one works best for you and your app. Try implementing one ad strategy at a time and track your eCPMs and user engagement. Once you have found a strategy that works well, you can scale up your implementation to maximize your revenue.

Check out our other article that explains other monetization strategies!

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