This post was most recently updated on January 18th, 2023
We’re all familiar with the app store concept. A profitable niche filled with hundreds and thousands of users willing to download app after app in hopes of finding the next viral hit. As an App publisher, your goal is to monetize your application and turn that passive time spent by users into a profitable resource. In this blog post, I’m going to break down 6 of the most popular In-App ad revenue models used by mobile publishers today.
Classic In-App Advertising
In-App Advertising (IAA) is the most popular and straightforward mobile app advertising revenue model. In order to truly operate under a pure in-app advertising model, your app should be free of cost with no subscription packages.
It’s a good idea to test this out within the in-app ad framework depending on the types of ads you are running and how regularly they are being served on the app.
When it comes to gaming apps, in-app ads are integrated into games at specific moments during gameplay as an additional revenue stream by offering ad placements to brands who bid the most.
Players are making many in-app purchases these days with the avg. number of transactions per user growing across all genres including racing, sports, and action.
Learn more about in-app ads here.
Rewarded Ads
If you want to entice more users to use your app, consider using rewarded video ads. This ad format works best when it comes to mobile gaming apps.
How rewarded video ads work?
Users get reward offers for watching the ads during the gaming session. The user initiates the reward ad by tapping a button and viewing it in its entirety, and then they receive the reward.
In order to entice players to watch the full ad, rewards are crucial. The rewards are usually an extra life or premium gaming kits or free premium videos inside the app.
Related Read: https://www.monetizemore.com/blog/rewarded-ads-practices-mobile-apps/
Do rewarded video ads bring in more money?
In terms of eCPM, non-muted video ads perform better than muted video ads by $2.03.
In rewarded video ads, not allowing players to skip ads results in an eCPM boost of $4.20.
In spite of the fact that rewarded video ads are best suited for certain genres, 90% of all users do not watch a rewarded video advertisement completely.
Playable Ads
Playable ads are interactive video ad formats letting users get a short preview of your app before a person decides to download it. They are best used when it comes to mobile games promotion giving users a brief taste of the actual game.
Ad networks that support playables offer game publishers greater monetization benefits than those that do not. Playable ads are extremely effective when it comes to getting users to click through as they have three times better CTR than video-only ads.
When playable ads appear, players click on them faster than other creatives, regardless of whether they are static or video.
Related Read: https://www.monetizemore.com/blog/what-are-playable-ads-google
Paid Downloads to be set free from Ads
Consider this if you are still worried about forcing ads on your users but still aren’t convinced that you can charge them a monthly, quarterly or annual subscription fee:
- There could be a paid app without ads and a free app with ads. Rather than paying a subscription fee for an ongoing service, users can opt for the paid version and pay a single download fee in the app store.
- Users download the free version & generate ad impressions which is another win for app publishers.
App Subscription Model
It’s not too late if you’re worried that part of your app user base will stop using it due to the ads. In that case, it’s best to set up a hybrid subscription and ad revenue model.
This works like a charm. Just look at YouTube Premium’s subscription model which allows users to pay a price for an add-free version.
Your app is free to download and use but it does serve ads. If your users would prefer to avoid ads while using your app, it’s best to offer them a subscription plan for an ad-free app.
For publishers, it’s the perfect scenario for publishers because you make money from each app user in one way or another – through paid subscribers or impressions.
Freemium App Model
The freemium Model is similar to the in-app ad revenue model explained above.
In addition to providing the option to remove ads by subscribing, you also provide a freemium model, in which paid users get exclusive features and a totally ad-free app. For instance: The Spotify Premium Model. For apps where users need a little extra incentive to avoid ads, the freemium model works perfectly.
Related Read: https://www.monetizemore.com/blog/make-money-mobile-app-monetization/
Ready to 3X your in-app ad revenue?
Takeaways:
- Your app’s revenue can be maximized by choosing the right in-app ad revenue model.
- There are multiple profitable ways to monetize an app with in-app advertising.
- Each in-app advertising revenue model comes with its own pros and cons.
Whether you’re a brand new mobile app publisher or someone who has been at it for years, the one thing that’s safe to say is that your approach to in-app advertising is likely not set in stone. Rest assured, the advertising landscape continues to evolve rapidly, and you’ll need to keep evolving with it to remain profitable in the face of competition and other challenges.
The best model depends on your goals as a developer or publisher. If you’re trying to maximize your revenue, you’ll probably want to explore all options and tweak them based on what’s most effective and attracts your audience.
Need a bit of guidance on deploying the perfect in-app ad revenue model for your app?
With over seven years at the forefront of programmatic advertising, Aleesha is a renowned Ad-Tech expert, blending innovative strategies with cutting-edge technology. Her insights have reshaped programmatic advertising, leading to groundbreaking campaigns and 10X ROI increases for publishers and global brands. She believes in setting new standards in dynamic ad targeting and optimization.