📢 IAA (In-App Advertising)
Quick Summary
IAA (In-App Advertising) is a monetization model where revenue is generated by displaying advertisements within the game to players — primarily the free-to-play player base who do not spend money on direct purchases (IAP).
IAA and IAP are the two primary revenue pillars of the mobile game economy. While IAP captures revenue from the paying minority (“whales”), IAA monetizes the much larger non-paying majority.
Common Ad Formats
| Format | Description | Player Experience |
|---|---|---|
| Rewarded Video | Player voluntarily watches a 15–30 second video in exchange for in-game rewards | Positive — player-initiated |
| Interstitial | Full-screen ad shown between gameplay sessions or level transitions | Neutral to negative |
| Banner | Persistent display ad at the edge of the screen | Low impact, low CPM |
| Playable Ads | Interactive mini-games used as ads to attract new installs | Positive — engaging |
Key Metrics
- CPM (Cost Per Mille): Revenue per 1,000 ad impressions — the primary pricing unit for ad networks.
- eCPM (Effective CPM): Actual revenue earned per 1,000 impressions after accounting for fill rates.
- Fill Rate: Percentage of ad requests that result in an ad being displayed.
Design Tension
The primary design challenge with IAA is balancing ad frequency against player experience. Too many ads → high Churn Rate. Too few → insufficient revenue.
Rewarded Video Ads are widely considered the gold standard because they are opt-in — players choose when to watch ads in exchange for clear value, creating a positive rather than disruptive experience.