The bottom line
Top apps now blend ads with subscriptions and in-app purchases, using rewarded ads to earn from users who never pay. This lifts revenue and retention, and the ad income can fund user acquisition.
Key takeaways
- Most users never pay, so ads are the only way to earn from them. 8:08
- On average, 80 to 90% of installs will not pay, and many were bought with acquisition spend.
- Apps in several categories now earn from ads, and AppsFlyer's subscription report points to a blended model for games and non-games alike.
- Ads work best when they are placed at moments users already accept. 2:16
- App open ads shown during the loading screen get the most impressions, and suit one-time utility apps like VPNs, QR scanners and wallpapers.
- An ad offered after a finished round, a death or a lost game feels like a small break, so users watch it.
- Giving a reward first makes users more willing to watch ads. 3:49
- A welcome bonus of 2,000 coins, doubled by watching a video, raised both downloads and ad revenue in the campaigns Steve ran.
- Free currency trains users to spend, as gift cards do, which makes them stickier.
- Daily rewards build the habit that keeps users coming back. 5:22
- Fun Run shows the rewards for each upcoming day, and lets players watch an ad for extra stars.
- Subscription and content apps can add ads without giving up subscriptions. 7:20
- Cleanup asks free users to watch a rewarded ad to delete more photos, and Spotify and Netflix run ad-supported tiers.
- One developer uses ad revenue as the marketing budget while subscriptions bring in most of the income.
The money you make from your ads is your marketing budget. The bulk of your revenues are going to come from subscriptions, but you can always use the money that you make from your ads to supplement and help subsidize your marketing budget.
Steve P. Young, relaying advice from developer Moyo
Chapter summaries
0:00 Ad monetization hacks that instantly increase revenue
Ad tactics are quick to test and work for gaming and non-gaming apps alike.
- Each tactic is a task of about ten minutes. 0:57
- Subscription apps benefit too.
- Ads can drive more downloads.
- The "why" of ad monetization comes before the "how".
- The best-known example apps are shown later.
1:14 Why top apps are shifting to hybrid monetization models
The strongest apps combine subscriptions, in-app purchases and ads instead of relying on one.
- No single revenue source wins on its own. 1:31
- Not only subscriptions, not only ads, not only purchases.
- Top apps now do all three.
- The AppsFlyer chart is hard to read, but its message is the blended model.
- This holds for games and non-games.
2:16 App Open Ads explained (best for Android apps)
An ad that appears while the app loads is the easiest first step, especially on Android.
- Load the ad during the splash screen so it shows as the app opens. 2:36
- Interstitials and video ads can preload while the app starts.
- The user taps continue and lands on the homepage.
- Android users tend to accept an ad more readily than a payment.
- Steve happily watches these on a free currency converter app.
3:49 Welcome bonus strategy that boosts ad revenue
A free starting gift makes the first ad offer feel like a good deal.
- A welcome bonus paired with an optional video doubler lifts downloads. 4:12
- The flow is claim the coins, then watch a video to double them.
- Watching is offered, never forced.
- Steve promoted "every new user gets 2,000 coins" through AppAdvice, now defunct.
- IndieAppSanta can run the same kind of promo today.
5:22 Daily rewards & retention loops
Daily bonuses turn coming back into a habit, and non-games should use them too.
- Showing every day's prize up front gives players a reason to return. 5:44
- Steve dislikes bonuses that hide tomorrow's reward.
- An optional video adds a little extra.
- Fun Run lists day one to day five, including a 200-coin day.
- Some players also spin a wheel for prizes.
6:31 "Watch an Ad to Play" monetization examples
When players run short of coins, an ad can stand in for payment.
- Casual and hyper-casual games trade an ad for another chance to play. 6:31
- A player without enough coins can watch an ad to enter the arena.
- A video can also revive a run after a death.
- Block Blast lets players watch an ad to continue.
- After a level, a 500-coin reward can be doubled by watching an ad.
7:20 How subscription apps monetize non-paying users with ads
A subscription app can still earn from users who close the paywall.
- A rewarded ad can sit behind the paywall as a second offer. 7:34
- In Cleanup, the user closes the paywall and is asked to watch an ad to delete more photos.
- The flow is onboarding, then paywall, then the X, then the ad offer.
- Some users will pay. The ad catches the rest.
- One-time utility apps and AI apps gain most from this. 8:14
- Acquisition cost money, so the installs that never pay should still earn something.
- AI apps now ask users to watch an ad to generate an image.
- The ad turns each use of the feature into a small payment.
8:47 Spotify, Netflix & content app monetization models
Content apps lock features or lower the price in exchange for ads.
- A free tier with locked features and ads is the standard content model. 8:49
- Spotify's free users hear ads, and some features stay locked.
- Spotify's ad is a video ad.
- Banner ads also work. Yahoo Fantasy earns from them.
- Many people accept ads in return for a lower price. 9:39
- Steve often picks the cheaper plan and says Give me the ads. I don't mind it at all.
- Most people don't want to pay, so an ad plan gives them a middle option.
10:00 Using ad revenue to fund user acquisition
Ads in a subscription app can pay for the marketing that brings in more subscribers.
- Developer Moyo runs ads in his subscription apps and spends that income on marketing. 10:05
- Subscriptions still bring in most of his revenue.
- The advice suits indie developers and bigger companies alike.
10:40 Yango Ads monetization strategy & case study
When big ad platforms leave a market, a publisher can grow there with local ads and organic growth.
- Sensus Tech grew to 250,000 monthly active users in Russia after major brands left. 11:35
- The US-based publisher relied on organic growth, localization and optimized monetization.
- Underserved markets can have money and still be hard to monetize.
- The company localized its app in Russian.
- Google Ads leaving made paid search cheaper and ASO more valuable. 12:00
- Ad rates dropped and keyword competition fell, so the company focused on ASO.
- Steve notes that for those who think ASO is dead, not quite yet.
- With AdMob gone, the app needed a local ad network. 12:22
- Yango Ads gave it access to ads in popular local apps.
- It also provided AI-driven targeting for better CPM rates and reliable payouts.
- Monetization performance improved significantly after integration.
In the growth library
Steve P. Young, Host, App Masters (app distribution and monetization experts). Ad monetization tactics for gaming and non-gaming apps, from app open ads and welcome bonuses to rewarded ads inside subscription apps. The core lesson is that top apps now blend ads, subscriptions and in-app purchases, since 80 to 90% of installs never pay.
Lessons that draw on this:
- How to add ads, affiliates and partners
- How to build habit loops that bring users back
- How to structure subscription tiers
- How to win in the App Store
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App Masters · The whole library, and ask it anything