Monetization: In-App Advertising 101 [+Glossary]

There are tons of ways to make money with your free app—in-app purchases, gated features, sponsorships, but the most lucrative yet often intimidating way to monetize is with in-app advertising. If you know absolutely nothing about the advertising industry, don’t worry, you’re in the right place. Luckily your friends at Kiip know a thing or two, we’ll cover the basics of in-app advertising.

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Formats

First things first. When preparing to monetize your app with advertisements, you have to consider several different ad formats and what works best for you app.

Banners ads are probably what you’re most familiar with and what often comes to mind when people think of in-app advertisements. They are rectangular static ads, usually at the top or bottom of the app.

Native ads, made famous by social networks like Facebook and Twitter, are ads or promoted content that are seamlessly intertwined with the content of the app using the same color and aesthetic.

Video ads are video advertisements that users watch in your app. There are many video options— pre-roll, vertical, incentivized etc.

Interstitial ads are full screen ads that an overlay the interface of the app. They are usually displayed during natural pauses in the user experiences, for example between levels in a game, at Kiip we call these pauses, moments.

These are the most popular of ad formats. Some apps use all of these formats while other may allow just one. It’s important to understand ad formats when making the decision to integrate ads into your app, as each format has distinct advantages and disadvantages. Check out our posts on the pros and cons of different formats and respecting your user experience during monetization.

Campaign types

Campaign types have confusing acronyms, but they all boil down to money. How advertisers measure the success of the campaign and ultimately how they plan to pay out.

Cost per Install (CPI) ads are common in campaigns with the goal of user acquisition. These campaigns usually have a redirect link and advertisers pay per the number of people who use the link to install their app.

Cost per Completed View (CPCV) is a type of video campaign where the advertiser pays per completed view. Meaning, users have to finish watching the video (without closing the ad) in order for payment to occur.

Cost Per Thousand Impressions (CPM) is a ad type where the goal is for the ad to be seen by a user. An impression is a when an ad is retrieved and displayed for a user to see. CPM campaigns are paid per thousand of these impressions.

Cost per Click (CPC) is a type of ad where the advertiser pays if the ad is clicked on.

Cost Per Engagement (CPE) is an extension of a CPC, this type of campaign doesn’t simply count when an ad is viewed, but whether or not the user interacted with the ad like a click. Engagement can be defined a number of ways—clicking on the ad, entering an email address, responding to a survey, etc. In a CPE campaign impressions are given for free.

Other Important Terms

Fill Rate is very important metric. It is an indicator of how much of your ad inventory is being filled with ads. An ad network’s fill is is calculated as a percentage of the number of ads returned by the network divided by the number of calls made for an ad from your app to the ad network. Low fill rates mean that you are missing out on revenue opportunities.

Effective Cost Per Thousand (eCPM) is a simple way to compare different ad pricing models. eCPM is calculated by dividing total ad amount earned by total number of impressions served. This number will tell you how efficiently each network is driving revenue relative to others.

Blacklisting is a power held by the app developer to prevent specific advertisers from running campaigns in your app. For example, if you have an app with a primary demographic of children, you might blacklist alcohol brands.

Mediation is a way for publishers to maximize revenue by allowing several different ad networks to serve ads within a single placement. A mediation tool allows publishers to set the priority that each ad network receives.

These are the basic terms you need to know to understand in-app advertising as a way to monetize your app. You can find these terms and more our monetization glossary that you can download by entering your email below! If you’re interested in monetizing your app with Kiip, feel free to reach out at hello@kiip.me.

Download the Glossary HERE

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