Mobile App Terminology

Ad monetization

What is ad monetization?

Ad monetization is the process of monetizing your mobile app via advertising revenue. On the face of it, this is extremely simple: insert ads into the app and collect revenue. However, maximizing ad monetization revenue can be extremely challenging for app businesses.

Even to get the total ad revenue, you need to add up all the money you make from each source, which, if you’re working at scale, will come from at least several ad networks which may define views, clicks, and conversions in different ways, and is likely to include different creatives and placements that offers varying revenue opportunities. More sophisticated mobile publishers also want to know where they get their most valuable ad monetization users from, what the ROI (return on investment) of acquired users is, and what the LTV (lifetime value) of their users are.

Since many app businesses also monetize via in-app purchases, you need to add those numbers into the picture to get accurate ROI of acquired users.

What are the uses of ad monetization?

For many free or freemium apps, ad monetization is their number one source of revenue. In particular, one of the most common types of ad monetization is in-app advertisements (IAA). This method of app monetization relies on ad networks to connect developers and app businesses with advertisers, or in other words connecting supply and demand for ad inventory.

The major benefit of using in-app advertisements instead of other monetization methods such as in-app purchases or subscriptions is that, since it is free, it may be significantly easier and less expensive to acquire users. Also, ad monetization helps apps monetize all users, not just the small fraction who will pay. On platforms like Android (and pre-iOS 14 iPhone and iPad), advertisers are able to target users with personalized ads and earn revenue for the apps.

As the ad tech company Smaato suggests in their guide to IAA:

Since apps are able to collect first-party data on an opt-in basis, they are also able to pass valuable targeting parameters such as gender and age. This makes it easy for advertisers to precisely reach their ideal audience through in-app advertising.

That level of targeting is not always possible with iOS 14.5 and SKAdNetwork. However, contextual targeting can take its place in those scenarios.

The mobile marketing company Digital Limbo highlights four main types of in-app ads, including:

  • Rewarded video ads: Rewarded video ads are a type of ad that provides users with a reward for watching a video ad, typically the reward is access to more premium content.
  • Interstitials: These ads belong to the category of push ads that are placed within an apps interstices, or spaces between the apps main features.
  • Offerwall ads: Offerwalls are similar to rewarded videos in that they provide a reward for users completing a specific action, such as installing an app or signing up for a newsletter.
  • Native ads: Native ads refer to in-app content that matches the form and function of the rest of the app. For example, a news app may display sponsored articles as part of their native advertising campaign.

In order to successfully monetize an app with advertising, app businesses need to test and optimize each advertising option in order to determine the right mix for their audience. In many cases, native ads will provide an optimal user experience as they fit seamlessly within the app experience, although the other methods can also be effective for the right business. In addition to in-app advertising, many app businesses will combine this revenue stream with other monetization methods to maximize their ROI.

How does Singular facilitate ad monetization?

Singular can help you optimize your monetization efforts by automating the collection, normalization, and aggregation of ad revenue data across monetization partners.

By combining ad monetization attribution and analytics, mobile marketers are able to uncover insights that can help optimize their monetization efforts. For each monetization partner, the ad revenue data is automatically collected, normalized, and aggregated in a unified dashboard.  This provides marketers with a much more holistic view of their ad monetization, including opportunities that may increase revenue. For example, by analyzing ad revenue down to the placement level this allows app businesses to better allocate their ad inventory and maximize sales.

Similarly, a unified dashboard allows marketers to calculate and analyze the true ROI of their ad placements. While ad networks may provide high-level ROI information, once you factor in ad revenue from each channel and campaign the true ROI may look completely different. Having a single source of ROI data that you can trust allows marketers to make more informed decisions about their campaign’s performance. Ultimately, this information allows apps to scale their revenue and marketing campaigns more intelligently.

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