For app publishers, growing revenue is often challenging. But at such uncertain times, in-app advertising has emerged as a reliable solution. By placing ads inside apps, publishers can monetize their audience. Besides, the app is available for free download.
With global in-app ad spending expected to surpass $390 billion in 2025, it’s clear this model is a major revenue driver for developers worldwide.
From banners to videos and native ads, multiple formats give publishers flexibility to earn without disrupting user experience. However, behind these ads, we have a complex ecosystem of ad networks, bidding models, and mediation platforms that decide how much revenue an app can make. We will explain everything today.
At Yieldmonk, we help publishers navigate this complexity. We optimize ad stacks, improving fill rates, and boosting yields so they can maximize ad revenue efficiently.
What is In-App monetization?
In-app monetization is the process of creating revenue from your app after it’s been downloaded. Nowadays, we no longer see any buzz around charging users upfront. Thus, publishers rely on models that keep apps free while still generating income.
In fact, as of September 2025, 95.37% of iOS apps and 96.99% of Google Play apps are free to download. The numbers show that post-download monetization is crucial for revenue generation.
There are several strategies publishers can adopt, including:
- In-app purchases (IAPs): Selling upgrades, premium features, or virtual items.
- Subscriptions: Recurring payments for premium access or ad-free experiences.
- In-app advertising (IAA): Allowing advertisers to run ads inside your app
The right mix helps publishers earn sustainable revenue without affecting the user experience.
How Does In-App Advertising Work?
In-app advertising enables publishers to earn revenue by showing ads inside their apps. Each time an impression becomes available, an auction decides which ad is shown and how much revenue the publisher earns.
Traditionally, this was managed through waterfall mediation, where ad networks are ranked by expected payout and called one by one until a bid is filled. While simple, it often leaves money on the table because it relies on historical averages and nto the current eCPM.
With in-app bidding, all networks compete in real time for every impression. This ensures that the highest bid wins instantly. This model usually means higher eCPMs, faster load times, and less manual work.
| Model | How it Works | Drawback | Benefit |
| Waterfall | Networks ranked, called one by one | Misses real-time bids | Manual control over order |
| In-App Bidding | All networks bid at once in real time | Less manual control | Higher revenue & efficiency |
What Are the Ad-formats Supported in In-app Advertising?
Choosing the right ad format balances revenue with user experience. Each format engages users differently. Some are subtle while others are immersive. Thus, it’s important to match them with your app’s flow and audience behavior.
1. Interstitial Ads
Interstitial Ads are full-screen ads that appear at natural pauses. Example: after a level ends or between content. They grab attention without cluttering gameplay.
2. Rewarded Ads
Users voluntarily watch a short video or interact with a playable ad in exchange for rewards such as coins, power-ups, or premium content. Rewarded ads are effective in free-to-play apps for strong engagement.
3. App Open Ads
Displayed when users launch or return to the app, app open ads overlay the loading screen to monetize. They are a smart way to monetize high-traffic entry points without interrupting mid-session activity.
4. Banner Ads
These are compact ads placed at the top or bottom of the screen. They provide steady revenue and are best for brand awareness with minimal disruption.
5. Native Ads
Native ads blend smoothly with your app’s content or feed. Since they match the look and feel of the environment, they maintain user trust while offering advertisers strong relevance. These are among the popular ad formats to boost revenue.
6. Playable / Interactive Ads
These are mini demo experiences that let users try out a game or app before downloading. These ads are highly engaging and conversion-driven.
Best Ad Mediation Platforms for In-App Monetization
Ad mediation allows app publishers to manage multiple ad networks from one platform. It automatically serves the highest-paying ads, improves fill rates, and reduces the time spent un managing networks.
Top Ad Mediation Platforms to Try:
1. Google AdMob
G2 Rating: 4.3
AdMob connects your app to multiple ad networks and top advertisers. It supports rewarded, interstitial, and native ads. It also helps maximize revenue with minimal effort.
Why Google Admob Stands Out:
- Multi-network integration via mediation
- Automated audience segmentation
- Support for multiple ad formats (rewarded, interstitial, native)
2. AppLovin MAX
G2 Rating: 4.2
Max uses machine learning to optimize your ad stack and boost eCPMs. It supports all major ad formats and makes revenue management easier for publishers.
Why MAX Stands Out:
- Access to multiple ad networks and DSPs
- Automated waterfall and smart CPM optimization
- In-house A/B testing for ad units, pricing, and user segments
- Support for rewarded, interstitial, banner, native, and playable ads
3. Google Ad Manager (GAM)
G2 Rating: 4.2
GAM gives full control over your ad inventory and campaigns. This allows publishers to manage direct and programmatic ads efficiently.
Why GAM Stands Out:
- Ad inventory and campaign management
- Support for Android, iOS, and major game engines
- Detailed reporting and analytics for revenue tracking
- Integration with Google Mobile Ads SDK for efficient ad serving
For a quick guide on top mediation platforms, check out the State of Ad Mediation PDF.
You can also read more about ad mediation platforms here.
FAQs
What is in-app advertising?
In-app advertising is a monetization strategy where developers earn revenue by showing ads inside their apps. Users interact with ads, and developers get paid for impressions, clicks, or conversions.
How does in-app advertising work?
Developers integrate ad networks via an SDK, advertisers bid for ad space, and targeted ads are shown to users based on behavior, location, and interests. Revenue is earned when users engage with the ads.
What are the main types of in-app ads?
Common types include banner ads, interstitial ads, native ads and rewarded ads.
What are the benefits of in-app advertising?
In-app ads offer higher engagement and conversion than mobile web. They are less affected by ad blockers and allow precise targeting using first-party data. They also monetize the time users spend in apps effectively.
Which ad formats perform best?
Rewarded ads, and interstitial ads generally perform best, as they combine high engagement with user-friendly placement. It helps drive both revenue and retention.
How is in-app advertising different from mobile web advertising?
In-app ads run inside mobile apps. They offer richer and more engaging formats like rewarded video or native ads. Mobile web ads run in browsers. They offer broader reach and contextual targeting across the internet.
How do app developers get paid for in-app ads?
App developers earn through revenue-sharing models like CPM or CPC via ad networks that fill their inventory.
How can I ensure a good user experience with in-app ads?
Ensure to test ad formats and networks, follow privacy rules, target high-value users, invest in creatives, and ensure ads meet viewability standards.
Will ads hurt retention?
Not necessarily. If implemented thoughtfully, ads can enhance the user experience.
What’s the In-app advertising revenue model?
Apps earn by showing ads within the app, with revenue based on impressions, clicks, or install.
What are the challenges of in-app advertising?
There are challenges such as user resistance to ads, limited tracking accuracy , and reliance on imperfect metrics like CTR.
