How In-App Advertising Powers Apps: A Simple Guide

Have you ever downloaded an app that is free of charge and questioned how it gets paid for? Well, a lot of the time, it's through in-app advertising. In-app advertising is a neat setup that allows app creators to earn money through ads placed inside their app, while users like you can use the app totally free of charge. In this blog, we are going to explain how in-app advertising works, what different types of mobile app advertising exist, and what mobile advertising trends are coming in the future. Don't worry, we'll explain it simply so a 15-year-old could understand!

What is In-App Advertising?

In-app advertising refers to displaying ads to users while they are in an app. These ads can take the form of videos, banners, or even small games inside the app. App developers partner with advertisers who are willing to pay developers to include their ads to people. In-app advertising is one of the most commonly used app monetization models today.

Now that so many apps are free to download, in-app advertising is a major source of revenue for developers and effectively allows developers to not charge users upfront.

Why is In-App Advertising So Popular?

Advertising in apps is a win-win situation. App users receive free content and app developers make money. The advertisers are happy too, they can aim ads to targeted groups; for example, show someone an ad about gaming that enjoys mobile games.

As stated on Statista, the mobile advertisement revenue worldwide was about $362 billion in 2023, and it is expected to keep climbing! This proves that mobile app ads and in-app advertising are pushing bigger than ever before while blurring the lines and how the app world runs.

Types of In-App Ad Formats

There are a variety of in-app ad formats that you might come across:

Banner Ads - These are the ads that show up at the top or bottom of the screen; small and unobtrusive, but always present.

Interstitial Ads - These are full-screen ads that display at natural breaks in partner content (ex. between two game levels.)

Rewarded Ads - You watch a sponsored ad for a reward; do that by earning extra lives in a game or earning coins to spend.

Native Ads - they look like part of the app and are livelier than banner ads, but still feel like part of the app.

Playable Ads - a super fun format where you get to "try out" a game or app inside the ad!

The decision on which in-app ad formats to use rests with app creators, and they must consider the user experience, but also think about ways to monetize their apps, without pissing off their users.

Where Are Ads Placed in Apps?

Identifying the most suitable ad placements within an application is a critical point. If an ad appears at an inconvenient time, users may get annoyed and exit the application. There are ideal times to show ads in an application, such as at the end of a level in a game, or following a page load.

Developers spend a significant amount of time determining when and where ads should be placed so that they can make money but also optimize user experience. The best applications integrate ads so that they feel like part of a user’s experience.

How App Creators Make Money?

There are many app monetization strategies that help app developers gain revenue through in-app ads. Below are a few common strategies:

High impressions: The more users to see the ad, the more money the developer makes.

Clicks and installs: Sometimes developers get additional revenues when users click on the ad or install the ad's application.

Rewarded engagements: Players are willing to watch the ad for some reward - this adds additional value to the ad.

Applying several app monetization strategies will maximize revenue while keeping the user engaged and enjoying the app.

Conclusion: Ads That Power Your Favorite Apps

In-app advertising is your favourite free app' engine. In-app advertising enables developers to continue creating cool new apps, while you enjoy them for free. While advertisers may be using variations of in-app ad formats, clever placements within the app, or engaging with new mobile advertising trends, they are ultimately responsible for moving the mobile app business. When you’re running campaigns to track your in-app advertising metrics, you’ll need a fully functional tool that’ll help you with this. However, Apptrove is going to secure a top spot in sucha  saturated market.

Next time you come across an ad while playing a game or using an app, remember - it is also keeping the app free and fun!