New monetization options by using in-app advertising

By using in-app-advertisement it is important to develop a monetization strategy because in-app advertisement not only generates growing revenue but also affects user experience. The intensive advertisement might affect user experience in a negative way but a successful monetization strategy should also be the compromise between generating revenue by advertising other services and keeping and growing the loyalty of happy users. (Tamoco, 2019)

ICT service Tamoco gives the following data about apps monetization from 2019 :

Figure 26. Source: Tamoco 2019.

App monetization strategies are still dominated by in-app advertising and generating most of the revenue for mobile applications. In-app purchase is more common for video games, where you can get additional points or hints for your gaming strategy so it would not be our strategy, but the subscription for the version pro we are also considering keeping along with in-app advertising.

Advertising

Advertising is probably the most common and easiest to implement when we are talking about generating revenue for free ads. And can be also organised via a third-party ad network.

According to the latest forecast report and study by Statista, mobile advertising spending in the year 2022 will be $336 billion worldwide and by 2024 it will achieve $412 billion.

As app owners, we just need to display commercials inside their mobile application or opt for affiliate marketing and get paid from the third-party ad networks. Additionally, advertising is considered the finest way to earn money from the apps.

Mostly, the app owners are paid when the user clicks or hits the ad or when the user instals the application via advertisement, the app owner gets paid. (Statista 2021. Mobile app usage report)

Below there are some examples of mobile advertising partners for iOS and we are going to use one of them.

Table 10. Mobile advertising partners

.

Rewarded Video Banner Rich Interstitial Video Interstitial

AppLovin AdMob AdMob AppLovin

AdColony Major Marketplace StartApp Unity Ads

Unity Ads Yandex Major Marketplace AdColony

IronSource Inneractive Marketplace Inneractive Marketplace Vungle

Tapjoy MyTarget Yandex Major Marketplace

Vungle AppLovin AppLovin InMobi

AdMob Facebook AN MyTarget -

Facebook AN InMobi Facebook AN -

Chartboost - IronSource -

Major Marketplace - InMobi -

It is possible to work with advertisement networks directly or via distributors, for example,

● SSP (Sell Side Platform)

● Ad Exchange

● Ad Mediation

(Sirvida-Liorente, S. 2018. Monetization of the mobile app using the advertisement).

There are different options on how to display ads providers for monetization. But, as app owners, we can try some of them and analyse which will bring us more revenue.

Banner Ads

Figure 27. Source:Sirvida-Liorente., S. 2018. Monetization of the mobile app using the advertisement.

These display ads are displayed in different sizes and at the top or bottom parts of the app screen.

They are often small and less destructive so users can continue using the app. They are also more common when apps have a free and paid version like we are planning to do. The negative point is that the ads are generally so small on a mobile screen that the advertiser doesn’t get much value from using the space. and therefore they are usually not bringing much value and have low engagement rates. Users do not interact with these kinds of apps.

Interstitial Ads

Figure 28. Source:Sirvida-Liorente., S. 2018. Monetization of the mobile app using the advertisement.

This type of app advertisement is full-screen pop-ups that are displayed at specific time frames. Users can close this ad by a close button in the upper left or right corner.Interstitial ads are a popular choice because they only appear in between levels, stories, pages or other transitions in the app.

Native Ads

Figure 29. Source:Sirvida-Liorente., S. 2018. Monetization of the mobile app using the advertisement.

Native ads are integrated to appear as a natural element in the app. Most of the time they promote a product or a mobile app that is somehow connected to the content and purpose of the promoting app.

This method is getting more and more popular these days because the users are less irritated and more likely to expand their interest or curiosity, this kind of ad is more user-friendly and it enhances user experience. However, their revenue can be pretty low compared to other methods.

Rewarded Videos

Figure 30. Source:Sirvida-Liorente., S. 2018. Monetization of the mobile app using the advertisement

This kind of app advertisement is very good for gaming apps and not really suitable for our case.

Online users watch rewarded videos in exchange for points, or virtual goods. (Ewen, J. 2019.) An AdColony survey demonstrates how effective publishers perceive mobile app ads to be when compared to other monetization tactics:

Figure 31. Source: AdColony.

As we can see rewarded video ads are most effective and bring most of the revenue but as they are efficient only for mobile games we are going to try using the following of that monetization methods:

interstitial video and banner ads, native ads, combined with the paid subscription of the PRO version (after one month of free use), which will along with the daily menu for the special restriction and purposes with provide useful tips and advice from nutrition for better and help lifestyle, for example, it might also include the advice related to different kind of food supplements based on the users' medical data.

We can also try different ways how in-app-ad will generate us the revenue, or a combination of them.

For instance, the most common are the following:

● Revenue per click, which means how many times the users of our app clicked on the advertisement.

● Revenue per view: Here we are talking about rewarded video, and how many times users watched them.

● And finally the most rewarding case revenue per install: we get paid for each install of the advertised app by the users of our app. (Patel, B. 2022. How do free apps make money in 2022?).