When it comes to mobile advertising, finding the perfect combination of ad units to implement in your app amidst the varying options is difficult. Too many mobile ads, or the wrong kinds of mobile ads, can drive users away. But on the other hand, you need to be able to monetize successfully in order to survive.

The key to optimizing your app’s monetization, and keeping users happy, lies in finding the perfect balance between different ad units, from reward-based ads (like rewarded video) to display-based ads (like interstitials).

Rewarded and display advertising each cater to a different set of goals. But is there such a thing as too many rewarded video ads per session? On the other hand, can too many display ads disrupt a user’s in-app experience, continually interrupting their gameplay with interstitials? The key lies in the balance of rewarded and display ads in your app, based on the type of app and users you cater to.

In order to do that, you need to be able to understand the different types of users who are interacting with your app, as well as the specifics of the in-app experience you’ve created. Once you’ve done that, you’ll be able to weave in the right kind of ads in the best places.

Tell us what app you are, and we’ll tell you how to maximize your in-app ad experience.

A little about display ads

Display ads have been an in-app ad mainstay for a long time - utilized by the entire spectrum of app categories. With their relative ease of integration, display ads have often been the go-to choice in mobile advertising, with unobtrusive options like native ads and banner advertisements allowing users to continue using the app without interruption.

A little about rewarded ads

Rewarded advertising is a form of virtual microtransaction based on in-app currency. Developers get users to pay for in-app purchases with their time and attention spent interacting with an ad as opposed to with their money. With ad spend on rewarded video more than doubling in the past year, this ad unit is one of the best ways to capture the attention of today’s visually-stimulated consumers. Given that the ad format is totally opt-in and gives users a clear value exchange, it also increases engagement and revenue, all while keeping users happy.

What type of app are you?

A deep engagement app

Deep engagement apps are apps that naturally propel users to spend a large amount of time in app. The longer a user spends in your app, the more engaged he or she becomes, which is why deep engagement apps are a good fit for rewarded ads, able to rely on the user's already established long-term engagement with the app. Examples of deep engagement apps are social networking apps like Facebook or Instagram, and level-oriented games such as Hopeless.

The use of rewarded video or offerwall in this specific type of app helps leverage the app’s deep engagement potential. Users are already in your app for long periods of time, which means they are more likely to actively engage with ads that give them the means (i.e. in-app content or rewards) that allow them to continue enjoying the app experience.

A common concern for developers is that rewarded ads will deter users from spending time in their app, driving users away with long videos. With deep engagement apps, however, this concern is less relevant, as users are already engaged for the long-term and developers already enjoy high retention.

In fact, with rewarded videos, the high-quality and emotional appeal of the video format tends to invite an even higher level of engagement, and in-app rewards provide users with more reasons to stay and engage in your app. By implementing incentivized ads like rewarded videos or offerwalls, you are likely to see your users naturally become more engaged and overall LTV go up.

A casual game 

A casual gaming app’s focus is the IAP Store and how to maximize the number of purchases users will make. Here again, a higher ration of rewarded ads can be very effective. Rewarded ads can supplement IAP by familiarizing users with in-app currency. According to DeveloperTech, players who engage with ads are twice as likely to make an IAP, and spend 40-100% more than players who do not. By integrating rewarded ads into your app, you can nudge non-paying users to visit the store for more rewards and increase the IAP Store’s overall revenue potential.

Many developers are fearful of in-game ads like rewarded videos cannibalizing IAP revenue, worrying that players will continually win premium currency through video views that would have otherwise been purchased in their app's IAP Store. Contrary to developer concerns, however, the integration of rewarded ads can actually increase IAP across all levels of spending, providing a taste of all the offerings showcased in the IAP store.

With the exchange of in-app goods occurring through the viewing of rewarded videos or engaging with offerwalls, users are likely to become more familiar with the IAP store as they begin to interact more frequently with the virtual goods and currencies in the app. The further they get in the app using the rewarded goods they ‘won’ through incentivized ads, the more likely they are to frequent the app store in search of more in-app currency.

An app without in-app currency

Apps without an in-app economy tend to resort to display ads, but there are very few - if any - apps that cannot create some kind of virtual currency as a form of exchange for watching rewarded ads. While incentivized rewards may be more difficult to integrate, take a good look at your app and see if you can identify parts within it that you can package as an incentive for users - be it free temporary streaming for your music app, trial runs for apps selling certain products, or other special offers in your app that can be leveraged and used as an incentive for users to interact with ads.

This will not only create a new revenue stream through the eCPMs you get from rewarded ad interactions, but will also increase retention and LTV, which is often a struggle for apps that do not have an in-app economy.

A utility app

While a utility app can incentivize users with rewarded ads as a way to unlock certain features or functionality, these types of apps tend to benefit more from display advertising. Utility apps, such as Clean Master or Splitwise, tend to draw in short-term users looking to interact with their app for a specific period of time or to solve a specific, short-term need they have.

If the bulk of users for utility apps are short-term users, watching a 30 or 60-second video ad in exchange for a minor incentive that may not necessarily address what they’re looking for will not be effective, and will more likely result in users leaving the app. Users here are not looking for progression in an app, like they are with a game. They are also not committed enough to your app, as they might be with a deep engagement app, to get through rewarded ads without leaving the app altogether.

Utility apps are, as expected, a quick fix or solution for something the user needs at that specific time, so it’s a safer bet to complement this kind of interaction with a native display ad, as opposed to interrupting or forestalling the user's access to in-app functionality. Check out our blog post for more on how to monetize your short-term users.

When determining the ratio between display and rewarded ads to use in your app, you should first ask yourself what type of app you are and what kind of users you’re catering to. Ultimately, the secret to fulfilling your app’s monetization goals while keeping your users engaged lies in ensuring that you choose the right ad unit for the right user in a specific in-app situation.

Check out the Slideshare presentation by ironSource’s VP of Mobile Display, Itay Riemer, for more on the balance between rewarded and display advertising.

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