In-App Mobile Ads: How to Make Money With Mobile Apps

For many app developers, the hardest part about finding success is not creating it. Instead, marketing their mobile app in a way that allows it to grow its user base and make money is where difficulty is met. At first glance, the two seem contradictory: people like and will flock to free app much more readily than an equivalent they have to pay for – but free apps fail to earn revenue for the developer. To be a successful developer, you need to not only know how to create high-quality mobile apps that meet the needs of your target market, but those that make you enough money to continue developing and improving your projects.

This is where a range of app monetization strategies come into play. App developers have a few to choose from (or even more than one if a hybrid strategy suits your app best), and in-app mobile ads are gaining worldwide traction. Read on to learn how you can make money with your mobile app using in-app ads while maintaining the growth you need for long-term success.

How do apps make money?

In-app advertising has increasingly become the choice of app developers looking to earn revenue from their app for years now – by 2023, it’s predicted advertisers will spend near 350 billion USD on mobile ads. In-app mobile ads allow you to keep your app as an otherwise free service while still earning money from your userbase – just not directly from their pockets.

The main advantage of in-app ads is that there is no paywall to discourage mobile users from downloading or using your app. While you may get more money-per-user through an app with an upfront download cost, you are likely to make more money in the long run with advertisements in a free mobile app through the sheer number of people that will download and use a free app. But to truly understand the advantages of in-app mobile ads, we need to consider your other monetization options as an app developer.

What are the alternatives to in-app mobile ads?

- Pay-per-download: This is where developers charge a one-time fee when downloading the app.

- Subscription model: With this model, the app is free to download, and users are typically allowed to either use a portion of the app’s features or access the full suite for a limited time. Subscribing offers the developer a monthly income from an active userbase and can be used to provide access to further features or remove ads from the interface.

- In-app purchases: This model allows users to buy additional features or lives in a game, for example, directly through the app’s interface.

The dilemma with many of these alternative strategies is how to utilize them without lowering user retention or hindering growth. If done well and strategically, in-app advertisements can benefit and improve the growth of your app by injecting money into further developments.

How to use your mobile app to make money with ads

Earning money through in-app mobile ads is not as simple as designating a space to run ads on your app. There are several factors to consider which can each greatly influence the success of the ads on your app, which in turn influences how willing advertisers are to continue running their campaigns with you.

Some app developers choose to use a hybrid approach when it comes to app monetization. By combining in-app advertising with another strategy such as subscriptions, developers can earn additional money while growing their userbase. You can read more about this here or read a case study, but for the purpose of this article, we will focus solely on in-app advertising. Here’s 4 factors you must consider before embarking on your new monetization journey.

Choose the right ad network

Working with the right ad network can make earning money with mobile apps a breeze – while working with the wrong one can greatly damage your chances of success. There are a wide range of ad networks out there with those like Pangle offering a bespoke and personalized service, exclusive TikTok For Business ad demand, and expertise in the APAC markets.

By the time you come to choosing the right ad network for your app, you should have a clear understanding of who your target market is, what type of advertisement suits them best, as well as what your overall mobile advertising strategy will be.

Choosing an ad network that pays you through a CPM model is highly beneficial for you as the publisher, as your payment is not proportional to the campaign’s success. The campaign’s eCPM, or effective cost-per-mille, can be determined by dividing your estimated earnings by the total number of impressions, then multiplying it by 1000.

CPM = （adspend/impressions) * 1000

eCPM = (earnings/impressions) * 1000

For example, if an ad campaign generated $100 in revenue after receiving 10,000 impressions, the eCPM could be calculated as such:

(100/10,000) * 1000 = 1

This means that the publisher will earn $1 per 1000 impressions.

Advertisers with high-performing campaigns will be more than happy to continue publishing ads through the ad network and your app, which is a win-win situation. But both the advertiser and you as the publisher play a role in achieving this, which brings us to our next point.

Weigh up the different in-app mobile ad formats available

Like the range of campaign structures, different in-app mobile ad formats are beneficial for certain apps and target markets. Depending on the nature of your app and how your userbase behaves, you may want to prioritize a certain type of advertisement. At Pangle, we’ve seen some apps thrive with ad formats that others struggle to make work. The proof is always in the results and working with a team of specialists from an ad network ready to help will allow you to quickly find your feet and select the right ad format(s) from the get-go.

Here’s an overview of some of the in-app mobile ad formats available to app developers:

- Rewarded video ads: When the user watches the ad, they will be rewarded with some in-app incentive.

- Interstitial video ads: This is a full-screen ad that appears at natural break points in the app’s UI

- Native ads: These ads will blend into the in-app content, appearing natural and seamless.

- Banner ads: These will appear interspaced throughout the app in several shapes and sizes.

Different ad formats will be beneficial and find varying levels of success on different apps. Consider your target market and make an appropriate selection to maximize the money you make with in-app mobile advertising. Read more comprehensive information about different ad formats.

How much money do apps make per ad?

How much money your app makes per ad will depend on the type of ad your app is running. Banner ads will earn less than, for example, interstitial ads. Remember to talk with your ad network first to get a better understanding of how much you are projected to earn with a certain strategy for your app in particular.

Finding the balance between ad revenue and app growth

Ads are a great resource for app developers and are a great way to make money with your mobile app. But as with many things, finding the right balance is integral for long-term success. In this case, the balance is between ad revenue and app growth.

Inundating your users with far too many ads that are not suitable for their profile may provide you with some short-term revenue, but it will not be healthy for your app’s growth in the long run. Working with a reputable ad network like Pangle offers you the chance to work with specialists who can help you strike this balance perfectly. Through well-balanced strategies, you can maximize the money you make with your mobile app with advertising while still encouraging healthy growth that sustains your app well into the future.

To learn more about in-app mobile ads or kickstart your journey, get in touch with us at Pangle. Send us an email at pangle_support@bytedance.com or visit our resource center for more information.