27 February 2023 Reading time: 7 min

In-app ads – how to monetize them

Mateusz Wójcik

Do you like games on your phone? If the answer is no, then ask yourself if you’ve definitely never played, at least Snake, Tetris, or Candy Crush – and answer again. Now imagine the situation: Sunday, 8 p.m., your thoughts are unfortunately already on Monday, but there is some time left, so why not use it for a bit of entertainment? You pull out your phone, fire up your favorite game, click start, and… Advertisement. That’s right ads are currently an integral part of any game, some you have to watch to the end, some you can skip, and some are more absorbing than the game itself. And what are ads? A way to make money in apps! That’s why in this article we will tell you how to use ads so that you can earn from them and at the same time not upset the user.

Types of in-app advertising

Web advertising that is displayed in a mobile app, rather than in a web browser, is called In-App advertising. Significantly, In-App ads are tied to specific apps, not like ads displayed in browsers. On top of that, they have almost 100 percent visibility, so they are also much more effective, i.e. they have a higher click-through rate, which we’ll talk about a bit more later. This is due to the fact that the most commonly used full-screen ads appear, as the name suggests, on the entire screen of the device. In-app ads are also treated more favorably by the user because… primarily those displayed in games, they offer users “something” in exchange for seeing the ad. This could be extra lives or equipment for a character, hints for a game, or unlocking some feature.
But that’s right – we mentioned full-screen ads. There are more types of In-App ads. We can mention:

  • native advertising, i.e. advertising that both in appearance and content resembles the application or, in other words, “merges” with the environment in which it is displayed. Its biggest advantage is that it is unobtrusive, so it does not alienate users, who are now increasingly sensitive to pop-up ads,

  • full-screen (interstitial) advertising—this type of ad takes up the entire screen of the device and is displayed in the application usually when moving from one section to another, that is, for example, in games, after completing a single level. It may display for a few seconds or require the user to click a “crosshair.” The advantage of full-screen ads is that there is ample space to expose the call to action. Playable Mobile Ads, which are ads in the form of a mini-game, are also becoming increasingly popular. The downside of this type of advertising, however, is its high intrusiveness,

  • banner (display) – is a graphic ad that typically appears at the top or bottom of the screen. Banners are often chosen by developers because they are highly effective, and the cost of making them is relatively low,

  • video ads, have become increasingly popular in recent years. Like full-screen ads, they are frequently displayed after successive sections of the application, and their length is usually between 20 and 30 seconds. This model is very demanding, for the reason that users maintain interest for at most 1/3 of the ad’s duration. To encourage, or perhaps it would be better to say “bribe”, users a bit, “reward” ads, or Reward Video Ads, were created. They offer additional benefits for watching an ad to the end, or for voluntarily including another one.

Why should you opt for in-app ads?

Just the fact that there are so many types of advertising makes it the best way to monetize. With such a wide selection of advertising forms, we have a chance to expose the brand in many ways, and thus – reach many users, without being pushy at the same time. On top of that, online ads are not time-limited. The app can be accessed and used by users around the clock, so advertising is neither dependent on broadcast time like on TV or radio, nor does it require being at a specific time and place, as in the case of outdoor ads. Ads in apps also have an unlimited territorial reach – our product, and at the same time, the ads placed in it can reach people not only in the whole country but basically in every corner of the world. At the same time, it should be mentioned that yes, television, radio, or newspaper advertising can also have a global reach, but buying such an opportunity will be much more expensive, and the implementation more time-consuming and complicated.

Another advantage of in-app ads is that these types of ads are interactive – they can take the form of a mini-game, or offer the user a profit for watching a short video. Web ads are also easy to tailor to your audience, and if you notice that they are not working properly, they can be modified quite easily. I guess we don’t need any more convincing…? To complete the picture, we can also say that about 70% of mobile traffic comes from apps.

How to introduce advertising into an app and not alienate the user?

Anyone who has never been annoyed by pop-ups or 30-second videos that can’t be turned off should be the first to throw a stone. We all know that ads can be annoying, and we also know that you can’t opt out of them if you want to monetize your app. Too much advertising causes so-called banner blindness, a phenomenon when a user subconsciously starts ignoring ads. The least intrusive, as we mentioned, is native advertising, but embedding ads so that they are an integral part of the app is not easy either. When placing other types of ads, the most important thing is… to use common sense. Google’s suggestions collected in Google Page Experience, for example, can also be helpful.

It is also significant that the ads are not completely detached from the user’s interests. We are talking about targeting – both behavioral, that is, focused on user behavior, and contextual, based on similar topics. What does contextual targeting look like in practice? For example, in racing games, automotive-related ads will work best, while in games involving home decorating, ads from the decorating industry should appear. Behavioral targeting is based on collected data about users – we know this from practice: it’s enough to enter a few sites, for example, with airline tickets, and we’ll already get ads offering trips to exotic places.
Networks such as – to name the most popular ones – AdMob, FBX, Adrino, or Mobigate are responsible for displaying relevant ads. Such networks charge a commission on profits, which is usually around 30 percent.

There are also “ad exchange” platforms, or sales aggregators, which give advertisers access to various applications. This solution is economically viable, because such platforms display any ads, regardless of their subject and target audience. Unfortunately, by the same token, the app gets more “cluttered,” which results in lowered user satisfaction and ultimately loss of users. Therefore, as we said, the most important thing is common sense, which will help balance between maximizing the use of advertising space and keeping customers with your product.

How much is earned from in-app ads?

It’s impossible to say unequivocally how much is earned, on average, from a mobile app, since profits from individual titles vary dramatically – the most profitable category is, of course, games.

Profits from ads can be settled in three ways. The first is billing per ad click, applied to text or image ads. The second way, which applies to interactive ads, is billing for the number of impressions – here profits are charged for every thousand plays. “Cost per action” (CPA), on the other hand, is based on the fact that the advertiser pays for each download of the application in which his ad is placed.

What is the CTR rate?

Click-through rate (CTR), or click-through rate, is an important concept when we talk about ads. It determines how often users clicked the displayed ad. To put it another way: it is a percentage of the number of clicks in relation to how many times the ad was displayed. In practice, if out of 100 people who saw an ad, 10 of them clicked on it, this means that the CTR is 10%.

A high CTR is usually good news – it indicates that the content of the ad is a good fit for users. However, it is necessary to juxtapose the CTR with the conversion rate, which describes whether the user performed the desired action, i.e., bought something or signed up for a newsletter, for example, and with the rejection rate, which is a parameter showing what percentage of impressions end up with no further action.

Worse, if the CTR is high and the number of conversions is low. Such a result means that the ads are creating traffic, but they are not doing their job – they are not convincing the user to buy or use the service. Reasons for such a situation may include the advertiser’s unattractive offer, lack of appropriate keywords, or an unintuitive conversion path.

Ads and what else? Other ways to make money in the app

Of course, advertisements are not the only way to monetize through apps. Monetization methods can be divided into two groups: explicit and implicit. The former include subscription, i.e., periodic payment for access to content, in-app purchases (so-called micropayments), and the most obvious way, which we would not recommend ourselves, however – creating a paid app. Implicit methods, on the other hand, include the aforementioned advertising and commissions introduced on platforms that allow users to sell products or services. You can read more about monetization methods here.

Mobile apps are a well-developed, and still growing, sector. They allow you to generate profits, even if the basic version of the product is available to users for free. However, it is important to remember that the most important thing is quality and customer satisfaction. We’ll repeat ourselves for the third time, but if you plan to introduce ads into your app, be sure to do it sensibly. After all, no one likes to be bombarded with thousands of ads at every turn, right?

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