The Android app ecosystem thrives on free apps and games. While users do pay for some content directly, they flock to free options in much larger numbers. Many developers are still able to make money from these apps — the monetization methods are simply different than the traditional purchase model.

One good thing about advertising is that it can be fairly easy for developers to insert ads into an app and release it for free. With a number of self-serve advertising networks available, the barriers to entry are low.

Advertising basics

The most basic ad unit is the common banner ad. The ad size for mobile apps has more-or-less standardized to 320×50. You’ll see a few slightly smaller variations of that, but in general banner ads fit within a space of that size.

Banner ads can often be very easily added to an app or a game. While it can take some work to optimize ad placement and not obstruct the use of the app, most developers should be able to get advertising up and running fairly quickly. Read my previous article on implementing banner ads in code or XML layouts for examples.

Most ad networks have how-to guides with sample code to get you started. Not all of the ad networks that I have researched make it easy, however, and I generally recommend avoiding companies that make it extra difficult for you.

The good thing about the size being standard is that a lot of ad mediation is possible with this common format; you can even display some banner ads without using any SDK at all — for instance, I recently wrote a tutorial on implementing HTML banner ads in just an Android WebView.

More ad formats

There are many more ad formats besides the small banner. I’ll break advertising down to three categories:

  • On-screen advertising, such as banners and rich media that exist on the same screen as the content.
  • Intermittent content, such as interstitial ads, ads at an activity’s start and end, or pop-up ads while in the app.
  • Out-of-app advertising, such as push notifications and homescreen icons.

I previously covered the difference between cost-per-click and cost-per-action ads — that just covers what happens after the click. Both types of ads can be displayed in each of these formats.

On-screen advertising

Banner ads are on-screen advertising. The user may be tempted by the ads displayed while they are using the app, and can touch/select them at any time.

There are other sized ads, such as 300×250 and square ad units. According to the Interactive Advertising Bureau, the larger ad formats are not nearly as well standardized as the 320×50 banner format, which means different ad networks may offer different sizes. With tablets and larger Android devices becoming more common, the larger ad formats may be more appropriate to fill up the space without getting lost, as a small banner might.

So-called rich media ads contain video or other interactive elements, and some of them can be configured to jump up from a small banner to a full-screen ad. This can combine elements of on-screen and intermittent advertising formats.

Intermittent ads

Intermittent ads might include full-screen ads, videos, and a number of ad walls (also known as offer walls, unlockers, and a number of other proprietary names). There are also pop-ups and other event-driven ad displays.

Interstitial ad formats are often used with apps and games that have an episodic flow — i.e., a user completes one screen, and there is a natural break while moving to the next screen. One advantage of this method is that the user is expecting a break, so they may be more receptive to advertising before they return to the next screen. This can also make it easier to lay out the app, since content and ads don’t need to compete for space.

Pop-ups and other event-driven ads may appear at any time, or be tied to specific user actions where users may be more receptive to advertising. These kind of ads may require more planning to not disrupt the flow of using the app or the game; this task may be more difficult for some games and apps than others.

Out-of-app advertising

Out-of-app advertising takes advantage of having access to the device even when the user is not inside your app. Not surprisingly, many users do not expect the ads to continue after their use of the app is closed.

To help clean up some shady practices, Google recently made changes to the developer policy, which should help prevent both accidental or intentional violations of the good faith of users. Ad networks offering these ad formats generally require a statement in your app’s description to notify users that your app is supported by this kind of advertising.

All the same, consider the user’s experience with using their device, not just while using your app. Many users may not read the description fully and may be surprised when these ads appear. If they spend time tracking down what app has injected these ads, they may be more likely to leave a bad review when they find it. Be very careful with these kinds of ads.

Read about considerations in selecting an ad format.

Considerations in selecting an ad format

The choice of which ad format to use goes far beyond what seems like it would make the most money. First of all, don’t trust advertised eCPM (effective cost-per-mille, or thousand impressions) values — that’s just marketing material, and results will vary, as there are only a few guaranteed eCPM ad campaigns out there. Additionally, eCPM values can’t be compared across ad types — not only can different ad types be displayed at different frequencies, they also have a different effect on the user’s perception of the app.

Some ad types (and ad networks) work better with different types of apps or games, and oftentimes the only way to find out is testing. My previous article talks about split-testing to find out which network performs better. A more robust solution is to mediate ad traffic between different networks; I do that with all of my apps that have banner ads, because it allows me to redirect traffic when I discover that one network is not as well suited to a particular app.

Only some kinds of ads (specifically ad types that are common such as banners and other image blocks) are easy to mediate. Specialty ad types usually require the SDK of the hosting ad network, and are not as easily interchangeable with ad formats from other networks. For this reason, I am hesitant to try new ad formats on new networks. That might require releasing an update to my app with the new SDK, and time to add the unique ad format to my app. If I don’t like the results, I need to release another update to my app to remove the SDK. Don’t let that discourage you from trying new things though — finding the ad formats that work best for your app can boost revenue from an app significantly.

The decision of which ad format to implement involves a number of factors that can be more than just the advertised eCPM. The ability to easily integrate ads and mediate between networks is of importance to some developers. Perhaps more importantly, the user experience should be carefully considered — an ad format that fits well with the app can have a positive impact on ad performance.