Gaming apps are huge. Everyone from millennials to high-income earners loves them with some of the top games pulling in millions of users and generating more than $36 billion in revenue in the U.S. alone. These kinds of numbers should mean big revenue for game developers, however, there is a general expectation that gaming apps -- especially casual gaming apps -- should be free to play, or at least very cheap.
While 72% of users understand the role of advertising and the free access to games that they provide, game developers need to walk a fine line between drawing in an avid user base to monetize against, while providing ad experiences that don't turn off users.
To give you a head start on the competition, we've compiled a shortlist of the highest performing ad formats that lead to successful monetization without burning your users.
Opt-In Rewarded Ads - The User's Favorite
76% of mobile game users in the U.S. prefer opt-in rewarded ads over any other ad format. This is because there is a very clear and direct exchange with the user. If they want to keep playing the game or get a bonus reward for free then they will eagerly participate without feeling "interrupted."
Video Ads - The Money Maker
When it comes to in-app advertising video ads are the money-makers. According to an AppAnnie survey, 57% of app professionals reported that video ads generated the most revenue for them of all in-game ad formats. However, it should be understood that video ads are considered one of the most likely ad formats to create a negative user experience as they typically render the app unusable for the duration of the ad.
Banner Ads - The Most Cost Effective
Banner ads are classic but still get great mileage without becoming too obtrusive to users. In a recent Appodeal study, researchers found that banner ads hold an eCPM of only $0.56. While this can be appealing to marketers on a budget, it might not be enough to support developers without a very active and large user base.
In-app advertising is a tricky business. Ads gain value with increased users. Users are deterred by apps. The most effective ad format will strike a balance between providing a great user experience and advertising opportunity for marketers.
If you have any doubt, there is only one way to know what path will work best for monetization of your app... test, test, test!