Why In-App Ads Are Vital To Boost App Developers’ Revenue

November 7, 2022 4 min read
in-app ads


Why In-App Ads Are Vital To Boost App Developers’ Revenue

Reading Time: 4 minutes

As per a study, publishers will be able to tap into a fast-growing revenue stream by leveraging in-app ads as a key part of their app monetization strategy.

Over the years, consumers’ preferences have significantly changed and there has been a major shift in how they consume content. Mobile users have gradually moved away from surfing on their mobile browsers to spending more time on mobile apps. This has led to a substantial increase in the number of mobile app downloads, reaching 230 billion annual downloads in 2021. The growing affinity of users toward mobile apps provides app developers with a lucrative opportunity for monetizing their platforms. 

Mobile app users exhibit different behaviors than what the advertising industry is used to on the desktop and mobile web. Since apps offer a more user-friendly interface than websites, in-app audiences are more invested and focused. They do not hop from one tab to another as in websites, instead, stay for a longer time and engage more. In fact, a user’s motivation to download an app reflects a greater sense of commitment and loyalty compared to when they browse a website. Creating a compelling in-app video experience can further enhance this engagement and establish a strong connection between users and publishers. This will also enable the publishers to offer advertisers a targeted group of users when monetizing their app inventory.

Video Ads To Grow In-App Advertising Revenue

With the proven ability of video ads to entice users and capture their attention far better than any other ad format, it comes as no surprise that global video ad revenue is projected to reach $120bn by the end of 2024. 

Since videos are gaining traction, advertisers are spending more on video ads now than ever. Employing interactive video ads on mobile apps provides users with a real value exchange and extends the opportunities provided by the free apps. Moreover, unlike websites that track through cookies, apps track through device IDs after users opt-in. App developers can utilize this to collect valuable audience data that is not accessible through cookies alone. This data will become even more crucial for developers in the future, taking into account the soon-to-arrive cookieless digital landscape.

Thus, to maximize the potential of in-app real estate, it is imperative for publishers to add a non-intrusive video ad unit to the app. Along with offering them access to incremental ad revenue, this will improve user retention. 

Benefits of In-App Ads for App developers

1. Greater Monetization Opportunity

In-app ads prove to be a lucrative revenue stream for publishers as they have much more freedom to monetize the app in ways they cannot monetize a website. Additionally, in-app advertising also allows them to benefit from non-paying audiences. Since publishers can offer the app for free, casual, or price-sensitive audiences, who wouldn’t otherwise choose to pay for the app, can also be utilized for generating revenue.

2. Higher User Retention

The mobile app audience is the most captive and engaged, which makes them the ideal audience for display advertising. This leads to higher interest, click-through rates, and conversions, thereby higher ad revenue for app publishers. Moreover, the rightful optimization of ad campaigns and the selection of appropriate ad placement, formats, and frequencies can positively impact user retention, engagement, and app user LTV.

3. Increased In-App Purchases

In-app ad formats such as rewarded ads offer users the ability to decide whether to watch the ad or not. Despite this, users voluntarily choose to watch the ads. Their motivation lies in the fact that they don’t have to pay for anything, rather they receive bonuses and rewards for not skipping the ad. Although most users are unlikely to make in-app purchases, in-app ads can persuade those who will. App users who interact with rewarded ads are 4.5X more likely to make an in-app purchase than those who don’t.

4. Better Personalization

Ad publishers can serve highly personalized ads through in-app advertising. This increases the odds of engaging the audience and convincing them to click through. They also have more control over the ad-serving process as they can precisely identify their audience. Accurate targeting, immersive ad formats, and relevant ads can boost personalization, contributing to the overall user ad experience and benefitting publishers in the long run.

Wrapping Up

Though in-app advertising is a profitable monetization model for app developers and has immense potential for future growth, it is vital to make sure the in-app ads are non-intrusive. For this, publishers need to leverage ad formats that seamlessly integrate into the app environment and ensure the best user experience. It is also essential to display relevant advertisements that interest the users. This helps in improving their perception of the app, which in turn increases publishers’ credibility. 

VDO.AI offers interactive and non-intrusive in-app ad formats to help app developers engage their users while generating augmented revenue.

Connect with VDO.AI here to effectively monetize your app and drive incremental ad revenue.

Shruti Bhatt is a Marketing Associate at VDO.AI. She likes challenging herself and is always on the hunt for new ways to improve her marketing initiatives.