What are the best practices for in-app ad monetization?
Users have recently moved away from paying for apps upfront (paid apps). Nowadays, there is a strong preference for free-to-access apps, meaning you need to use adverts or in-app purchase options to generate revenue, which is called ‘ad monetization’.
In-app advertising is a great way to generate revenue as mobile apps make money by partnering with advertisers that pay for advertising space. The advertisement can be in the form of a native or banner ad, pop-up, or video.
While users may prefer free mobile apps rather than paid apps, generating revenue from ads can affect the overall user experience. For example, in-app ads that are overly intrusive, distracting, or spammy will be a massive turn-off for users who want to download an app to enjoy the features.
One way to avoid user experience issues is to choose a reputable mobile ad network that pinpoints customer drop-off points and successful interactions with in-app ads.
Despite the potential downsides, there’s no doubt that well-planned in-app ads are excellent at generating revenue for your app.
Read on for our guide to the best practices for getting started with in-app advertising.
App Monetization Strategies: 3 Tips to Get Started With in-App Ads
When you’re ready to monetize an app with in-app ads, there are three core steps to get started to give yourself the best results.
You need to choose an ad network, decide on an in-app ad format, and select the type of campaign you would like to run.
1. Choose the Right Ad Network for Your Mobile App
Mobile ad networks are the “middlemen” in an industry that connects advertisers with publishers and, therefore, essential to your monetization.
While Google’s AdMob was the original pioneer of ad networks, it’s no longer the only option available for publishers and advertisers.
There is a vast selection of ad networks offering different ROI, ad formats, campaign types, targeting options, etc. The right one will depend on your app, goals, and target audience.
To choose the most suitable ad network for your company and app monetization strategy, you need to ask yourself the following questions:
Who is your target audience? Who do you want to reach?
Where is your target audience?
What are your business and advertising goals?
2. Select the Correct Ad Format for Your App Monetization Strategy
There are lots of different types of ad formats. However, the main types are:
Banner: Also called display ads, these combine text, and images. They are familiar to most users, but some surveys show
that the accidental click-through rate can be high.
Interstitial: These are full-screen advertisements that include images and videos taking over the whole screen during a transition in the app. The downside of these apps is that they are very intrusive, but they have higher click-through rates than banner ads.
Native: Native ads blend in with the app. The offer generally relates to the app’s features or your interests. These are less intrusive than the other types of ads.
Video: These types of ads can also be interstitial or native ads. They can have high click-through rates and can be engaging; however, they can be very intrusive on the downside.
Offer Wall: These are pages inside the app which offer incentives or offers for the user to purchase, for example, extra lives in a game. They get good engagement related to the app; however, as they are on a separate page, they can get lower impressions than other more intrusive ads.
3. Select the Best Ad Pricing Model Strategies
When you set up your in-app ad campaign for monetization, you need to decide the best pricing model for your app. You can choose from:
Cost Per Mille (CPM): In Cost Per Mille, the advertiser pays the publisher each time the ad displays 1000 times. The upside is that the publisher generates revenue by only presenting the advert. However, if the ad gets many clicks, you could create more revenue by charging per click or engagement.
Cost Per Click (CPC): As the name suggests, Cost Per Click charges the advertiser when users click on the advert, meaning advertisers only pay when they get traffic into their website. However, publishers may give away impressions for little to no money if the ad doesn’t get clicked.
Cost Per Action (CPA): Advertisers only pay if a click ends with a specific action, e.g., purchase an offer. It reduces the risk for advertisers as they only pay when the ad generates some form of conversion. However, publishers may need to serve the ad lots of time or get lots of clicks before generating any revenue.
There are other formats available; however, the model that works the best for your app is the one that produces the most revenue. This will depend on the type of app, your target audience, the advertiser, the type of ad, the offer, and other factors.
Key Takeaways: Mobile App Monetization Models
To monetize your app through mobile advertising, you need to balance several critical factors delicately:
Ensure that the ad network is the best fit for your app, ads, and audience.
You need to choose the correct ad format to drive conversions without negatively affecting the user experience.
Select the best pricing model(s) for your campaigns.
Find the right balance of ad network, ad format, and pricing model, and there’s no limit to how much revenue your app can generate.