The purpose behind the monetization of apps through ads is to generate revenue. The primary approach is to run ads for other apps, products, and services on your app and earn through them. We will dig deeper into all the methods to monetize your apps through ads. We will cover both paid and unpaid apps and how to monetize them. Apps that are free in the app store rely on this method to raise the commission.
Before getting to know how to monetize apps, you must know what app monetization is. So let’s dive in and understand this piece by piece.
After the creation of a successful application, the next step is to make money from it. This is termed app monetization in the tech culture. There are several means of monetizing an app, such as
App publishers and developers choose from these monetization apps to make the app a greater success. One important note is that your app monetization method/strategy should satisfy your users and your purpose of earning.
Mobile users prefer apps that are free of cost. This way, app developers cannot charge users anything at all. A smart method to earn from such apps is monetization through in-app ads. Apps must use some form of monetization to survive. Hence, applications are backed up by monetization strategies that help them generate their desired revenue. However, there are two aspects of app monetization that are important:
In the quest to make your app profitable, monetization is a great help. But, there is a balance that needs to be maintained. Any app monetization method that affects user experience can affect the popularity and usage of your app.
In-app ads offer a broader spectrum of app monetization. Advertisements are based on an expansive landscape, so it is easier to pick methods that engage the users instead of disturbing them. With in-app ads, it is easier to offer free-of-cost apps, while the ads look after the revenue aspect.
In-app ads are also easier to control, and publishers can block unwanted content. It is also an excellent method for raising apps’ profitability as advertisers are willing to pay high amounts to reach the most filtered and targeted audience. For all these reasons, in-app ads have proved to be the most popular method for app monetization.
App developers and publishers design and follow through monetization strategies. When monetizing your app through ads, the first step is to choose an ad network. The purpose of an ad network is to connect app publishers with advertisers. An ad network serves as a hub for these two parties in connecting their businesses.
The most popular and largest ad network is Google’s AdMob. AdMob makes earning through apps easier by running high-quality ads. When your app contains the space for ads, AdMob brings advertisers on board that have created ads and want to promote their offerings.
There are several ways of using ads for app monetization. You need to select which method works best for our app and add it to your application.
Banner ads are the most common type that users come across when using apps. These are ads based on text or images and take up space on a portion of the screen, usually the top or bottom. Even though most users claim banner ads as annoying, banner ads are simple and less intrusive than the other kinds.
Banner ads can be interactive and non-interactive. For the success of a banner ad, it is essential to make it visually attractive with quality graphics for prominence.
Interstitial ads cover the host app screen entirely. Interstitial ads are in the form of images or videos that pop up in between the natural flow of an app. With such a layout, interstitial ads can engage user attention more efficiently. Because interstitial ads can take up the entire screen, they are found to be intrusive for users. However, interstitial ads can be very effective if appropriately placed between different levels or page breaks of an app. With this layout, interstitial ads can engage user attention more. Moreover, they have a solid click-through rate. They serve as an excellent way for app monetization through ads.
Native ads are made according to the feel of the apps they are displayed on. The ad to the flow of an app seamlessly blends with the app’s natural flow. Advertisers pay for these ads to match app designs. The entire purpose of native ads is to reduce disruption for users to the maximum level. The ads have increasing popularity with 53% more views than other ads. Native ads are estimated to increase users’ purchase intent by 18%.
These ads are on the more subtle side of advertising compared to forcefully intrusive ads. As a result, users unconsciously prefer to engage with native ads.
Native ads are a great way to increase app monetization due to their harmlessness on user experience.
Affiliate ads are a method of forming partnerships with other products and services. Publishers use their apps as platforms to endorse or advertise for these businesses. Since a user is already using an app, it can be established that there is an air of trust between the two. When the same app offers a referral for another product or service, users are more inclined to access those.
Businesses will be interested in using your app’s popularity to market their offerings. Such a partnership can fulfil the purpose of monetization for your app. The benefits of this form of in-app advertising are multidimensional.
Reward ads are another great method to increase app monetization through in-app ads. Reward ads are those that a user accepts to watch in return for a reward. These are usually video-based ads with a runtime of fifteen to thirty seconds. Reward ads are highly popular with gaming applications.
Users are offered to watch a reward ad for moving on to the next level or getting extra lives, gifts, or continuity related to the game format. Users choose to watch reward ads intentionally and find them less disruptive.
Another less common version of reward ads is where discounts are offered. This kind of in-app ad is not offered too often. However, a study suggests that 77% of users will watch an entire 30-second ad if offered a discount at the end. Reward ads generally have a high interaction, engagement, and completion rate.
Video ads are gaining the highest popularity within the different ad kinds. Video ads are those that are:
Video ads are highly engaging as users like to watch these more than the other types of ads. They have a higher click-through rate. Sometimes a video ad can be intrusive when there is no option to close it. However, video ads are said to be the most enjoyed form of in-app ads. E-marketers suggest that video ad spending in the US will go as high as $24.81 billion in 2022 as the ad form gains support.
A highly interactive version of in-app ads is the playable ad. Users can try out an app with a 15 seconds trial run of the app before installing or buying it with playable ads. Playable ads are usually made for gaming applications. Users can play a small session of the actual game to understand the features and decide upon call-to-action.
These ads are gaining high popularity due to their heightened instructiveness. Payable’s ads are being highly recognized for app monetization purposes.
Offer walls are ads with multiple offers on a page. Users can come across these ads while using different applications. For example, users can choose from several offers from an app if they choose to watch an advertisement for another app or brand. Since an offer wall extends many options striking users’ interests, they end up choosing one of the options, boosting the app revenue.
Rich media are ads with bold graphics. These are usually made up of prominent images, videos, or GIFs. Rich media ads cover a significant portion of users’ screens and surpass the trouble of banner blindness. These in-app ads are successful in capturing users’ attention. A study suggests that rich media ads increase user engagement by 79% and message recall by 23%.
Social media applications often use carousel ads. A carousel ad is a series of related images or videos. This ad is interactive as users can only see what’s next on the ad by swiping through it. A carousel ad is like an album that reveals its contents only when you flip or swipe at it.
When we choose to monetize through app advertising, we need to select a pricing model. App advertising is based on various pricing strategies. The campaign goals, the host app or platform, and the app itself define what pricing model should be applied. Some pricing models are advertiser-friendly, while others are host app friendly. The most popular pricing models are:
Cost per mille, also known as cost per thousand, uses a system where revenue is generated every thousand times an ad is displayed. Another method is when host apps are paid for playing 1000 ads from an advertiser. Advertisers are charged at a flat rate whether app users click on their ad or not. CPM is a better method of pricing for advertisers who want to raise awareness about their brand instead of consistently turning prospects into leads.
In the CPC model of pricing, host apps are only paid for playing an ad when it is clicked on. Advertisers pay applications every time an ad is clicked on. This method is more sustainable for advertisers as they don’t have to pay for unfruitful display of advertisements.
On the other hand, applications will be paid less as compared to the CPM model if the users are not going through with the displayed ads. The CPC model is mostly used for display ads on the web and sponsored social media posts. The CPC model is also dependent on the famous click-through rate.
The cost per action model is more specific than CPM or CPC. Payment for a CPA advertisement is made when an app user clicks on the ad and fulfils a specific action. These actions can include certain installations, signing up for newsletters, submitting forms, etc. The CPA model is better for advertisers as they will only need to pay when their required action is fulfilled.
However, app publishers can lose chunks of revenue for offering their ad space without getting returns if ad users do not fulfil ad requirements. The CPA model is used by publishers when the offered advertisement is high on call-to-action and can certainly motivate users.
CPL, or the cost per lead pricing model, is when advertisers only pay for an actual lead. It is an advertiser-friendly pricing model. An app is paid only when a user clicks through the ad and then fills out a form on the advertiser’s website.
With so many steps involved, there is no margin for accidental clicks. This is the least recommended ad pricing model for publishers as they can earn more considerable app monetization revenue through other pricing strategies.
The online advertising marketplace is full of brands offering to promote businesses. Every Ad platform uses a different pricing model and has unique offerings for both advertisers and publishers. Here is a list of the top 5 mobile ad platforms with all their significant features and formats:
Google-owned mobile ad network AdMob is the mobile version of Google AdSense. AdMob is excellent for your advertising as well as app monetization needs because it is straightforward. AdMob allows you to advertise using images, videos, text, and interactive media and choose your preferred format and customizing options.
You can fit your ads to relate with ads present on your app for higher revenues.
AdMob allows you to choose from several advertisements such as interstitial ads, video ads, native ads, banners, and more.
Facebook and Instagram are two of the most popular social networks. With their mobile applications, Facebook and Instagram have captured the masses and are a great place for advertisers to promote their offerings.
Advertisers can also target users based on their demographics such as age, gender, location, interests, relationship status, and etc. These platforms provide filtered information to advertisers to market their products precisely to whom they want.
Facebook and Instagram use multiple forms of advertising such as videos, carousels, images, etc. Advertisers can also create pricing strategies according to their budgets and instantly promote their products with these platforms.
Smaato is the perfect market for advertising and app monetization, where over 10,000 publishers and 90,000 advertisers are present with their platforms. Smaato uses a bidding strategy to connect publishers and advertisers.
With this bidding strategy, publishers can find many advertisers willing to pay enormous sums of revenue for displaying their ads.
Smaato supports interstitial, video, banner, interactive, and reward advertisements. The platform encourages the CPM pricing model.
Mob Fox allows advertisers to filter their target market by geographies such as country, city, or zip, by demographics such as gender, age, lifestyle, education, or channels such as business, travel and entertainment. As a result, advertisers can reach their specific audiences with such classified options and are not liable to pay aimlessly for running ads.
This advertising platform exists, especially for mobile games. The purpose of Unity is to monetize mobile game apps using video ads. Unity allows advertisers or app publishers to add in-app purchases to make monetization possible without leaving the app. Unity supports interstitial, video, and banner ads and operates on the CPM or CPI campaign models.
The platform allows you to filter your audience according to demographics. The app reaches out to 35 million players across 128 countries. With such a massive audience, advertisers are sure to find the right target market.
With such elaborate advertising methods and platforms, app monetization is no longer a problem. Mobile ad platforms serve as hubs to connect advertisers and publishers to bring out the best for both parties.
The different advertisements appeal to different audiences providing monetization and revenues to both publishers and advertisers. The various campaign models offer strategies that are best suited for the businesses involved. App monetization has now been made easy with the extensive information and guidance available.