Monetization Guide

Paid App

Under the paid app model, customers pay an initial price for an app, usually in the range of $0.99 to $4.99. This model was the standard during the early days of the "app revolution" and it remains common today. However, many customers like to try apps before they buy, so the paid app model has decreased in favor compared to the following monetization models.

In-App Purchases

These days, in-app purchases (IAP) are a common model for app monetization. Using IAP, you can offer your app to customers for free — or a significantly reduced price — and then offer the ability to "unlock" various features or purchase virtual products from within the app. This model can attract users who are hesitant to pay for an app without trying it first.

In-App Advertising

The final popular monetization option is in-app advertising. Under this model, you display advertisements and other promotions to your users. If they interact with these units, you get an incremental amount of money.

One advantage of in-app advertising is that, for many apps, in-app purchases are a one-time-only transaction, as is the paid app model. Advertising, however, continues to generate revenue for the lifespan of the app.

In the next section, we'll discuss the options, benefits, and other considerations of monetizing with in-app advertising.

Banners

Banner ads occupy a relatively small portion of the screen, typically 50 pixels vertically in a 320×480 content area, and you can choose to display them at the top or bottom of the screen. Depending on the placement, you may need to reserve space or adjust the underlying content so that the banner doesn't obscure any interactive elements.

Banner ads work best when the user has time to interact with the ad and it doesn't hinder their experience. For instance, you should not place banners in time-sensitive or high-action scenes of a game since it's unlikely the user will stop playing to interact with the ad.

Not sure where to start? See the comparison chart below for providers of banner ads.

Static Interstitials

Static interstitial ads occupy the entire screen or obscure the underlying content. Because of this, the user must interact with it in some way, either by exploring the content or closing the ad. These ads are best shown at logical breaks in the app, for example between scenes or at another natural pause point.

Because of their size and level of detail, static interstitial ads may load slower than banners. Fortunately, most ad plugins either pre-cache static interstitial ads in the background, or they provide a method to pre-load these ads so that you can show them quickly when you need to.

Since you're giving the entire screen to the advertiser for a period of time, they tend to pay more for the privilege which equates to higher revenue on your part.

Not sure where to start? See the comparison chart below for providers of static interstitial ads.

Video Interstitial		Rewarded Video

Video Interstitials

Video interstitial ads are the next evolution in interstitial ads. Like a television commercial, video interstitial ads play for around 15-30 seconds and they tend to have a call to action (CTA) screen at the end. Most video interstitial ads must play for a minimum duration, at which point the user can skip to the CTA screen. If the ad prompts users to install another app or game, the CTA screen gives them an option to install it.

Because you're requiring users to watch the ad for a minimum duration and then provide a secondary interaction, video interstitial ads tend to pay higher rates than static interstitial ads.

Not sure where to start? Not sure where to start? See the comparison chart below for providers of video interstitial ads.

Rewarded Videos

Rewarded videos are an exciting alternative to normal video interstitial ads. With this ad type, you offer users in-app currency or virtual rewards in exchange for watching an ad. Most customers respond well to rewarded videos since they'll happily watch a short video to earn an instant reward.

Unlike static interstitial and video interstitial ads which should be shown at logical pause points, rewarded video prompts can be attached to a button or other UI element so that users can choose when they want to earn a reward in exchange for watching a video ad.

Not sure where to start? See the comparison chart below for providers of rewarded videos.

Offer Wall		Poll/Survey

Offer Walls

Offer walls are like rewarded videos in that the user is rewarded for various actions (offers). Offers can range from purchasing a magazine subscription to installing an app. Essentially, users are presented with a screen containing multiple offers and they can decide which they are interested in, then complete the task to receive their reward.

Offer walls are full-screen entities and they should be presented at logical pause points in the app. You (the developer) get paid per completed offer and some offers are worth more than others. In general, you will need to set up your own exchange rate and offer users higher rewards for completing higher-tier offers.

Not sure where to start? See the comparison chart below for providers of offer walls.

Polls/Surveys

Polls and surveys focus on gathering information from the user, after which you get paid for helping the advertiser collect valuable intelligence. For example, a company might offer a survey about customer habits and desires in order to improve their marketing efforts (and they're willing to pay for that data).

Be aware that some polls/surveys collect demographic data such as the user's gender, age, and so forth. For this reason, you should include a privacy policy somewhere within the app to inform users about what is being collected.

Since polls and surveys are not advertisements, users tend to participate more actively. Some poll/survey plugins even let you conduct your own personalized surveys in order to understand your audience better.

Not sure where to start? See PeanutLabs, Persona.ly, and Pollfish as providers of polls/surveys.

	Child-Safe

Child-Safe Ads

Apps designed for children — educational apps, e-books, and games, for instance — have traditionally been difficult to monetize. First, many operating systems offer parents a lock setting which prevents the child from making in-app purchases, so that model becomes ineffective in most cases. Secondly, in terms of advertising, the United States and many other countries have strict laws which prevent children from accessing content outside of the app and rules about what information can be collected from children (essentially none).

Fortunately, some ad providers help developers monetize child-targeted apps. For instance, they monitor outgoing advertisements to ensure that each is compliant with laws like COPPA.

Not sure where to start? See AdMob, KIDOZ, and SuperAwesome as providers of child-safe ads.

Ad Mediation

Advertisers "purchase" ads by buying a certain number of impressions through the ad provider. An impression is basically a single ad view. For example, an advertiser might buy 100,000 interstitial ad impressions through a given provider. Those impressions are then spread out among all users who receive ads from that provider. This pool of ads is called inventory.

Often there isn't enough inventory for every user, so the provider may not be able to deliver an ad. This is known as a low fill rate. In these cases, you will typically see a message in your console log reporting that no fill is available.

Fill rates are highly dependent on the geographic location of the user. For instance, some ad providers have very high fill rates in the United States, but in other countries the fill rate for the same provider could be minimal.

To help prevent low fill rate, some developers include multiple ad plugins/providers in their app and, if they don't receive an ad from one provider, they request an ad from another provider, repeating this request process until an ad can be received and displayed. However, this can be a tedious process for the developer and potentially delay an ad being shown to the end user.

To solve this, some ad providers offer a service called mediation. Essentially, they include multiple advertisement servers as their source for ads and call upon them until an ad is received, at which point it's delivered to your app. The end benefit for you (the developer) is that you don't need to build your own system to request and potentially re-request ads as described above — you just use one ad provider plugin and get a 100% fill rate! In addition, ad providers which support mediation attempt to deliver higher-paying ads first.

Not sure where to start? Explore Appodeal as a provider for ad mediation.