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Glossary

Mobile App Ads

Mobile app ads

How do ads work on apps?

App developers looking to earn revenue from ads typically partner with a mediation platform that aggregates various ad networks and integrate its SDK into their tech stack.

The mediation platform will use its waterfall, in-app bidding, or hybrid monetization technology to automatically find the highest bidding ad network, and serve the ad in the developer’s app.

The app developer chooses at what points the ads appear in their app, which types of ad units are shown, and the frequency and timing between each one. These variables - placement, frequency, and timing between each ad - are crucial parts of a developer’s monetization strategy and should be A/B tested rigorously.

Developers earn money from ads after their users view them or complete a specific action. For system-initiated mobile app ads like interstitials, developers earn revenue when an impression is registered, in other words when users view the ad. For user-initiated mobile app ads, like rewarded videos, developers earn revenue once the video is completed.

How to incorporate ads in apps

The first stage of incorporating ads in a mobile app is deciding which ad units to use. It’s generally a good idea to use multiple types of ad units, because different ads will perform better for different segments of users. For example, user-initiated mobile app ads like offerwalls and rewarded videos are most effective for engaged users who are invested enough in the app to watch a 30 second video ad or complete an event in return for a reward, while some users aren’t engaged enough to spend time doing this and therefore can only be monetized by system-initiated ads like interstitials or banners.

The next stage is finding the best placements for each ad unit. With system-initiated ads, it’s always important to minimize the disruption to the UX, so place interstitials only at breaks in the session. Perhaps users receive an interstitial ad when they first open the app, and after they finish completing their first in-app event and aren’t actively interacting with the content.

With user-initiated ads, which are opt-in and by nature non-disruptive, users should be able to access the ad units at pain points such as interactions with locked or gated content, or after failing a mission in a game. A photo editing app, for example, could give users access to a rewarded video in order to unlock a locked filter that they tried using for a photo.

For both offerwalls and rewarded videos, the rewards are set by the app developer - determining the right reward is possible through plenty of A/B testing to find the balance between maximizing revenue without cannibalizing in-app purchases.

How to put ads on your app

There are a few core pillars that will help developers implement an effective mobile app ads monetization strategy. First, is partnering with a mediation platform that has a powerful in-app bidding solution. In-app bidding is an ad serving model that operates like an auction, where advertisers bid in real time to get their ads shown in the developer’s app. Because it’s a real-time auction, competition is strong which means app developers earn higher revenue for their in-app ad space. Bidding is an automatic process, so in addition to driving up revenue, it also requires minimal time and effort from developers to manage it.

When a developer has an in-app ad monetization strategy in place, it’s crucial to leverage analytics to see what’s working and what can be improved. An industry leading mediation platform, like ironSource, will provide all the key metrics needed to understand how to optimize in-app ad monetization. From ARPDAU to ad usage rate, staying informed about the performance of in-app ad placements is key to making smart decisions that maximize revenue.

Using analytics as a guide, A/B testing variables like types of ad units, their in-app placement, and frequency can help find the optimal app ad monetization strategy.

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