In the competitive landscape of mobile applications, monetization is a critical component of an app’s success. While some apps thrive on subscriptions or in-app purchases, in-app advertising has emerged as one of the most popular and scalable revenue models. With users spending hours on their smartphones daily, brands are eager to reach them where they spend most of their time—inside mobile apps.
But not all in-app ads are created equal. Different formats serve different purposes, impact user experience in distinct ways, and offer varying levels of revenue potential. Understanding the types of in-app ads and how they fit into your app’s monetization strategy is key to maximizing revenue without compromising the user experience.
In this comprehensive guide, we’ll explore the most common types of in-app ads—including interstitials, banners, rewarded, native, and more—and examine how they work, their pros and cons, best use cases, and monetization potential.
Types of In-App Ads
1. Banner Ads
📌 What Are Banner Ads?
Banner ads are the oldest and simplest form of in-app advertising. These are static or animated rectangular image/text ads that typically appear at the top or bottom of a screen during app usage.
✅ Pros:
- Non-intrusive (when used properly)
- Easy to implement
- Constant visibility
- Compatible with most app layouts
❌ Cons:
- Low engagement rates (users often ignore them — “banner blindness”)
- Can clutter the UI
- Limited space for creativity or complex messaging
💡 Best Used For:
- Utility apps
- News apps
- Apps with long screen time and continuous engagement
💰 Revenue Potential:
Banner ads tend to have the lowest eCPM (effective cost per mille) rates among in-app ad types. However, their non-intrusive nature makes them ideal for passive revenue.
2. Interstitial Ads
📌 What Are Interstitial Ads?
Interstitial ads are full-screen ads that appear at natural breaks in an app’s flow—such as after a game level, during transitions, or when a user pauses an action. They can be static, video, or interactive.
✅ Pros:
- High visibility and user engagement
- Better eCPM than banners
- Ideal for promoting high-value actions (like app installs)
❌ Cons:
- Can disrupt user experience if not timed correctly
- High risk of user frustration or drop-off if overused
💡 Best Used For:
- Gaming apps (between levels)
- Content or quiz apps (between sessions or screens)
- Apps with clear transition points
💰 Revenue Potential:
Interstitial ads often command higher eCPM than banners. When placed wisely, they strike a strong balance between engagement and monetization.
3. Rewarded Video Ads
📌 What Are Rewarded Video Ads?
Rewarded video ads allow users to voluntarily watch a video (usually 15–30 seconds long) in exchange for in-app rewards like coins, extra lives, or content access. These are opt-in ads, meaning users choose to engage with them.
✅ Pros:
- High user engagement and completion rates
- Non-disruptive (user-initiated)
- Increases user satisfaction due to perceived value
- Higher eCPM than standard video ads
❌ Cons:
- Limited availability (depends on advertisers)
- Not suitable for every app type
💡 Best Used For:
- Mobile games
- Freemium apps with virtual economies
- Content unlocks (like watching a video to read a premium article)
💰 Revenue Potential:
Rewarded ads often yield the highest eCPM rates, as users are more likely to watch the entire ad and take action. They are an excellent monetization tool that also supports retention.
4. Native Ads
📌 What Are Native Ads?
Native ads are designed to blend seamlessly into the app’s UI and mimic the look and feel of organic content. These ads often appear as sponsored content within feeds, lists, or recommendation engines.
✅ Pros:
- Superior user experience
- Higher engagement and click-through rates
- Adaptable across multiple app categories
❌ Cons:
- More complex to implement
- Risk of misleading users if not clearly marked as sponsored
- Performance heavily depends on placement and design
💡 Best Used For:
- News and content apps
- Social apps
- E-commerce and shopping apps
💰 Revenue Potential:
Native ads perform well when integrated strategically. Their CTR and engagement rates are higher, which can lead to solid revenue over time—especially when personalized or contextually relevant.
5. Video Ads (Non-rewarded)
📌 What Are Video Ads?
These are short video clips (usually 15–30 seconds) that play automatically or on a triggered event within the app. Unlike rewarded ads, users are not incentivized to view them.
✅ Pros:
- Visually compelling and engaging
- Higher CPM than banners or static ads
- Great for brand storytelling
❌ Cons:
- Intrusive if placed poorly
- Can frustrate users if they interrupt key actions
- Higher data usage
💡 Best Used For:
- Apps with entertainment or media content
- Transition screens
- News and video streaming apps
💰 Revenue Potential:
Video ads yield better returns than static ads, particularly in high-engagement categories. However, they must be placed carefully to avoid hurting retention.
6. Playable Ads
📌 What Are Playable Ads?
Playable ads are interactive ads that allow users to engage with a mini version of a game or app before downloading it. These are especially popular in the mobile gaming ecosystem.
✅ Pros:
- Highly engaging and interactive
- Gives users a preview of the app
- Drives high-quality installs
❌ Cons:
- Expensive to produce
- Limited to certain app categories (mostly games)
💡 Best Used For:
- Game promotion within other game apps
- Cross-promotion networks
💰 Revenue Potential:
While rare outside gaming, playable ads command premium CPMs and conversion rates. They’re great for networks focused on user acquisition.
7. App Open Ads (aka Launch Ads)
📌 What Are App Open Ads?
These ads appear immediately when a user launches the app. They’re full-screen ads that make use of the natural pause during loading screens or initialization.
✅ Pros:
- High visibility without affecting core UX
- Quick monetization opportunity
❌ Cons:
- Can annoy users if not timed well
- Doesn’t work for fast-loading apps
💡 Best Used For:
- Utility apps
- Apps with natural load times or splash screens
💰 Revenue Potential:
Decent eCPM if the ad load time matches the user wait time. Timing and pacing are key to success.
8. Offerwall Ads
📌 What Are Offerwall Ads?
An offerwall is a full-screen interactive page where users can choose from a list of offers (like installing apps, completing surveys, or watching videos) in exchange for in-app rewards.
✅ Pros:
- High user control and engagement
- Multiple monetization options per user session
❌ Cons:
- Not ideal for casual users
- Can appear spammy if overused
💡 Best Used For:
- Game apps with currency or inventory systems
- Apps with user accounts and retention-based models
💰 Revenue Potential:
Offerwalls often yield solid revenue per engaged user. However, usage varies significantly by app type and audience.
How to Choose the Right Ad Type for Your App
Choosing the best ad format depends on a combination of factors:
| Factor | Recommended Ad Types |
|---|---|
| User Experience Priority | Native, Rewarded, Banner |
| High Revenue Goal | Interstitial, Rewarded, Playable |
| High Daily Active Users (DAUs) | Banner, Interstitial |
| Gaming App | Rewarded, Interstitial, Offerwall, Playable |
| Content/Media App | Native, Video, App Open |
| Freemium Model | Rewarded, Offerwall |
| Quick Monetization | App Open, Interstitial |
Balance is crucial. Overloading your app with too many ad types or frequent interruptions can result in poor reviews, high churn, and reduced lifetime value (LTV).
Tips for Effective In-App Advertising
- A/B Test Your Ad Placements: Small changes can drastically affect user engagement and revenue.
- Use Mediation Platforms: Platforms like ironSource, AppLovin MAX, or AdMob Mediation optimize your fill rates and eCPMs by sourcing multiple networks.
- Respect User Flow: Don’t interrupt users at critical moments.
- Consider Frequency Capping: Avoid overwhelming users with too many ads in one session.
- Personalize When Possible: Contextual and personalized ads perform significantly better.
Conclusion
In-app advertising is a powerful tool for monetizing mobile apps—especially free ones—but only when executed with a user-first mindset. With a variety of ad types available, app developers must strategically choose the formats that align with their user base, app type, and revenue goals.
Whether you opt for the low-key consistency of banner ads, the immersive engagement of rewarded videos, or the seamless integration of native formats, understanding each type’s mechanics and purpose is key. When done right, in-app advertising doesn’t just generate revenue—it enhances the user experience by offering value, relevance, and sometimes even rewards.
Smart monetization isn’t about stuffing your app with ads—it’s about the right ad, in the right place, at the right time.
Get the expert assistance you need for successful monetization — Connect us at bd@rtbdemand.com to learn more!
