December 8, 2022

In-App Advertising: Everything You Need to Know

So you’ve created a mobile app that’s got a clear value proposition, a growing user base, and immense potential. But you’ve hit one problem - how do you scale your app revenue while keeping it free to use? You may already offer in-app purchases (IAP) but today’s app economy is dominated by free downloads. The answer lies with in-app advertising (IAA).

In general, a smaller number of users tend to make in-app purchases, so relying on earnings from IAP alone often isn’t enough to turn a profit. IAA allows you to leverage your app’s built-in real estate to increase your app earnings, without resorting to a subscription-based monetization model. 

Read on to learn everything you need to know about IAA to begin elevating your app revenue today.  

What is in-app advertising?

In-app advertising consists of targeted adverts that appear to users within mobile apps. As an app owner, advertisers pay you for displaying their ads to your users in your app. To do this, you dedicate a portion of your app’s design and workflow to display different types of ads to users as they navigate through its interface.

Globally, in-app advertising spending is steadily increasing, having hit $288B by the end of 2021, and is projected to reach $413B by 2024, according to Statista. On top of this, IAA ad revenue is expected to top $220.80B in 2022. 

It’s clear that IAA is a growing industry and, when harnessed strategically, it’s a viable means of boosting your app revenue. 

The benefits of advertising on your app

It increases the profitability and ROI of your app

As mentioned above, in-app purchases tend to bring in a smaller amount of recurring revenue and are generally insufficient to cover the costs of running and maintaining an app. 

IAA allows you to easily scale your revenue without using subscription fees and payment plans which could deter users. Having a developed and successful IAA system backed by data also improves your app’s ROI which will attract more buyers should you ever decide to sell your app. 

It improves engagement within the app

A carefully placed advert can enhance the user experience of your app. IAA needs to be applied with careful thought and intention, but when done right, it can encourage users to engage with the ad, driving engagement and retention rates and increasing your earnings from advertising. 

Adverts that intuitively follow the user journey and appear unobtrusive and helpful are particularly good at boosting in-app engagement.  

It can increase in-app purchases

Research has found that users who engage with IAA view 4.2 more products per engagement session within apps compared to desktop or mobile sites. App publishers who place targeted ads that help guide users further down the sales funnel can increase their in-app purchasing rates on top of the revenue they receive for displaying the ads. 

Types of in-app ads

There are a variety of in-app ad formats available, each having unique advantages and drawbacks, depending on your app design, workflow and your intended audience. 

  • Interstitial ads - also known as full-screen ads, interstitial ads can be static text or images or an interactive video. They generally appear at a transition point in an app so are considered to be less intrusive.
  • Banner ads - banner ads appear generally as text with a clear call to action either at the top or bottom of an app page, alongside in-app content.

  • Native ads - native ads are ads that blend in with the app’s flow of content. An example of this is an ad you might see on your social media feed as you scroll through. The goal of native ads is to blend in with the surrounding app content, making it feel as though the user isn’t looking at or engaging with an ad.
  • Video ads - video ads are clips that appear before another video. Another type of video ad is a rewarded video ad which is a clip that offers the user a value exchange in the form of a reward for watching it, such as in-app points. 

In-app advertising best practices

When it comes to building an effective, measurable advertising campaign, there are a few important considerations to keep in mind. Remember, the goal of in-app advertising is to drive user engagement, so ads need to be relevant and add value to the user experience. 

Understanding and segmenting your users is vital to a successful IAA strategy. This includes understanding their interests, purpose and goals when engaging online and how best to reach them using targeted advertising. 

Testing, measuring, evaluating, and adjusting your campaigns is also essential to ensure your ads are producing the views and conversions to fuel your revenue. Privacy concerns are key when creating advertising within your app so you’ll also need to identify and adhere to regulations governing user privacy. 

Investing in in-app advertising takes time and, without a solid plan in place, you could risk losing time, money, and effort with no results to show. To create an IAA strategy that converts and is profitable for your business means you need the right insight and expertise on your side. 

Ready to get started?

At Appic we have the means and technical know-how to roll out advertising in your app at a faster time to market. We can roll out IAA for your app with tailored marketing strategies that speak to your audience and generate the conversions you want to see. Chat to us to learn more.

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