How to Make Money with Apps using Interstitial Advertising:
As defined in the Mobile Advertising Glossary, an interstitial is a “mobile ad unit that is inserted into the middle of of a mobile application, typically during menu screens or other natural breaks for the purposes of promoting 3rd party products or services”. In most of todays cases, mobile ad interstitials are used to promote 3rd party applications.
Here is a brief overview of the process any app developer can go through when looking to utilize interstitial advertising to make money with your apps.
What type of advertising will your users engage with? Is your app a game? Is it a weather app? If, for example, you are using interstitial advertising in a game it is likely that ads promoting 3rd party games will perform well. If your app is a weather or resource app, promoting 3rd party games will, most likely, not perform well. Simply put, make an effort understand who your users are and find interstitial advertising that will match their interests, and your content.
Identify what types of interstitial advertising you will utilize in your app(s). The two main types of interstitials are full screen display and full screen video. There are pros and cons to both (see below). If you expect your app sessions to be short, go with display; if you expect app sessions to be long, go with video. Or, do both and test effectiveness.
Decide where in your app you will show interstitials. There are endless examples of app developers placing interstitial advertising upon launch of an app. Scenarios do exist where this approach makes sense; such as a desire to push users to your own apps with higher ARPUs. But, when promoting 3rd party apps you are annoying users at the beginning of their engagement with you, potentially sending them somewhere else before they’ve had a chance to spend money in your app, and, they may never come back. The best way to identify when and where to place your interstitial advertising is to review your analytics. If your average user session time is 3 minutes set your interstitial to display after 2 minutes and 30 seconds. Your user is getting ready to leave your app anyway, try to monetize them before they go. App developers should monitor the success of each interstitial placement – if a placement isn’t generating revenue, move it somewhere else. No matter what, don’t place interstitials where they could interrupt game play or another core element of the app experience.
Decide how often to show interstitials. Standard practice is to show an mobile ad interstitial no more than every 3 minutes. We do not have any first hand data to support this, but it is a reasonable assumption that the law of diminishing returns apply here. Your app users will have the highest level of engagement with the first interstitial they see, each subsequent interstitial will have a lower engagement rate. Be careful that your in-session retention rate doesn’t drop faster than your advertising engagement rate. If it does, that could be a sign that the advertising is driving away your users.
Identify ways to reward users for interstitial ad engagement. Given Apple’s ban of incentivized installs, you are not able to reward users with currency (or other) in your app for downloading another app – though you can still do this on Android. On iOS, you can reward users with currency (or other) for viewing video advertising. Incentivized installs on Android & rewarded ad engagement on iOS & Android are fantastic ways to reward your users for engaging with advertising and will help you make more money in your apps.
Interstitial advertising is one of the methods that iOS and Android developers can utilize to make money in their apps. If done correctly and with your users in mind, interstitial mobile advertising can provide app developers with a stable source of revenue while providing their users with value in return.
As always, we recommend testing various formats and companies to see which work best with your users and your content.
Pros & Cons of Mobile Interstitial Advertising:
eCPM is high. Pay-per-install rates are over $1.00 on average and given a comparably low number of impressions, eCPM’s can be high. Video advertising has average view rates of $.025 – this can add up quickly
Compared to banner advertising, interstitial advertising provides you with full screen use for your app = more space for your content
Some 3rd parties like, Chartboost, enable you to cross-promote directly with other app publishers providing you with a fantastic way to drive installs of your own apps
Ability to reward users: You can reward users with free currency for watching video on iOS or downloading a 3rd party app on Android. Not only does this provide you with a revenue source, but enables you to reward your users for engaging with advertising creating a longer lasting, profitable, relationship
Mobile ad interstitials are interruptive, if you display them more often than every 2-3 minutes, your retention rates may decrease
Despite higher eCPM’s, mobile ad interstitials do not necessarily generate more revenue than mobile banner ads on aggregate given comparably low impressions
Mobile video impressions are typically between 15-30 seconds. That’s a lot of time to ask one of your users to spend viewing an ad within a 3-5 minute app session, especially if they aren’t interested in the content
Difficult to find appropriate advertising for your user base: A majority of interstitial advertising and video advertising is for the promotion of 3rd party games. If your user base is not predisposed to games your ability to fill a large percentage of requests with relevant ad inventory may be limited, and your revenue opportunity more so.