💎 Adding ad monetization to subscription apps: 10 tactics to maximize revenue and mitigate downsides
Several tactics to mitigate the downsides if you're already discounting your subscription app or decide to do so.
Last week, I shared my (schizophrenic) analysis of adding ad monetization for subscription apps along with a decision matrix to help you know if you should prioritize this initiative. Click below if you haven’t read it yet👇
This week, I’m detailing the tips & tactics you can test in order to mitigate the cons of ad monetization and maximize the impact.
Let’s get into more detail!
SPONSORED INSIGHT & RESOURCE
Unless you’ve been off the grid since early March (that sounds nice), you’re aware that RevenueCat put out their must-read State of Subscription Apps 2025 report.
But what’s been less talked about is their FREE Health Score tool.
You enter key app metrics (or have them auto-populate if you’re a RevenueCat customer!), then get an overall score and a neat radar chart showing you how you rank vs. apps in the same category.
It’s the perfect tool to quickly assess how you’re doing (or how your client is doing) vs. your strategy (since you might have made deliberate choices to be strong/weak in specific areas). Try it out, and bookmark it.
1. Study the game
You’re embarking on quite the journey, my friend.
Here’s what I recommend:
Download and study apps generating the most revenue that are also monetizing with ads
Here are non-Gaming apps with over $1M revenue over the last 30 days and Applovin SDK + Admob. You’ll notice that some categories are more heavily represented.
Below is a quick way to see implementations within various apps (with the ability to filter!) on screendesigns.com
Check out some apps’ Advertise with Us sections (like this one from Brainly) to understand the placements they have.
Talk with peers that have gone through it, and ad monetization consultants!
2. Do the math (and confirm expectations)
Last week, I shared a recommendation from Felix to only consider ads if you’re past 30-50k DAU.
Assuming three interstitial ads per user in the US (you typically want to show ads at a lower frequency than in games), you will earn $.15-$.18 per day in ad ARPDAU. Considering the potential loss in retention that comes from adding ads, it would amount to $.30 - $1 in user LTV.
Remember here that we’re also not just talking about DAUs fueled/compensated by new paid acquisition (cf. Monthly user churn is a terrible metric): you need users to actually come back.
Plus, if you focus on particular segments, you’re already narrowing the amount of users seeing ads.
How do you know eCPMs across countries and platforms?
I did find this Benchmark tool but it seems the real answers are:
Asking ad networks for benchmarks for your app peers - Nadir Garouche (Senior UA Manager, Sandsoft Games)
eCPM benchmarks are best from the mediation platforms. Even better from MAX - Felix Braberg (Ad Monetization Consultant)
3. Segment the user base
When adding ads to subscription apps, you want to segment your user base in order to limit cannibalizing your subscription revenue and minimize disrupting the user experience.
💎 Three ways mobile gaming companies segment for ads:
Geo location: identify countries where you have low in-app purchases and high eCPM, and show more ads to these users
Days spent in app: after the time-period where most users typically convert to subscription, start showing (more) ads
Behavior in app: showing more rewarded ads to users that watch rewarded ads, and less to the ones that don’t. Example: Idle game called Golden Goblins.
(08:18) by Felix Braberg (Ad Monetization Consultant) in Applying Gaming Ads in Apps
If you missed the gem from last week regarding how Impulse segments based on the above dimensions, here is the direct link.
4. Put in eCPM bid floors to mitigate retention loss
Last week, I shared several cons from monetizing with ads.
A big one: it hurts the user experience.
The good news is, you can decide at which price this is worth it.
💎 If you are working with interstitial ads, make sure to put in bid floors so you only accept to show an interstitial for a user if you can get a certain price for that user. This helps mitigate retention loss. In the US, a $15 price point is a good practice.
(05:52) by Felix Braberg (Ad Monetization Consultant) in Applying Gaming Ads in Apps
5. Leverage the infrastructure to run in-house ads
If you want to regularly pitch your subscription product to your free users, you can also use ad placements for your own ads.
This is exactly what Duolingo does when it run video ads for its Super and Max subscriptions.
As you can see above, this blurs the line between an in-house ad and a video paywall. You can see a similar thing in Brainly.
Video ads are most likely the most powerful, but you can also have a default “subscribe” banner in your banner placement.
You can get more sophisticated and set different conditions for this to happen and not have it be a one-size-fits-all setup (which I suspect Duolingo is doing):
Based on the eCPM bid floor not being met (cf. point above)
More in-house ads for users who show higher engagement
More in-house ads for users showing subscription conversion intent (e.g., displaying the paywall, etc.)
If you have a portfolio of apps targeting the same audience, then these in-app ads are also helpful for cross-promotions).
In-house ads are especially relevant if you are not sending a lot of CRM communications to your users.
6. Explore direct deals
Advertising your own products and advertising through ad exchange platforms are not your only choices.
You can also broker direct deals with big advertisers for which your audience is a good match. It can increase your eCPMs drastically.
If your audience is at least little niche (antiquities, heavy lifters, cycling buffs, etc.), and you have >200k users in the western countries, it is worth trying to sell directly to advertisers via a sales person if you want eCPMs jump 10x
By Jakub Chour (Paid, Organic & Revenue Growth at HER App)
7. Increase your refresh rate
An ad refresh is when the displayed ad gets replaced by a new one. This is done at regular intervals during a user session.
The upside of increasing the refresh rate is that you end up showing various ads to the same user, increasing your revenue and making them more likely to have one they end up clicking on.
💎 For banner ads in your app, use a refresh rate of 15 seconds. It’s pretty “aggressive”, but it’s good to get the revenue up and is pretty average for gaming. Adjust the banner refresh rate based on how it impacts retention.
(28:00) by Felix Braberg (Ad Monetization Consultant) in Deconstruction of App businesses from UA, GD & Admon perspective
8. Add a challenger exchange
By adding a challenger exchange strategically, you can manage to increase eCPMs on part of your inventory.
💎 You always want to have a challenger exchange to AppLovin Exchange (ALX) or ironSource Exchange. DT Exchange (by Digital Turbine, previously Fyber) is the best choice. ALX never competes with ironSource exchange, but they do compete with Digital Turbine, so when you add DT Exchange, you get DSPs to compete with themselves for the lowest third of the inventory.
(20:40) by Felix Braberg (Ad Monetization Consultant) in Google AdROAS campaigns, Admon Exchanges, Survivor.io update
9. Everything can be negotiated
Apparently, it is quite common to negotiate.
💎 Whenever you deal with an ad network, everything can be negotiated. This starts as soon as you get assigned an account manager at an ad network.
(24:10) by Felix Braberg (Ad Monetization Consultant) in 7 Ad monetisation secrets how to make more revenue
Negotiating things with Facebook or AppLovin is harder, but it’s possible. This is easier when you have more leverage (i.e., you’re not just a small fish).
10. Use SKOverlay for banners
This is a tip I’ve only heard once, so I’m not sure how legit it is.
💎 When monetizing with ads, use Apple-supported creative offerings like SKOverlay. This provides a seamless experience because users can download the app right from the banner and don’t have to leave the app or interrupt what they’re doing. Moloco has seen customers get up to +30% increase in SKAN conversions by using these.
(39:13) by Jihyo Kim (Senior Director, Partnerships at Moloco) in Mastering ROI for iOS Apps Advanced UA Strategies and Hybrid Measurement
I did see this in a few different apps (like Impulse, Duolingo), so something to look into, but most likely an attribute of the ad platform you use.
I hope this helps you decide what to prioritize for maximum impact.
Stay curious!
— Sylvain
Chief Insights Miner at Growth Gems ⛏️
(Fractional) Head of Growth at Reading.com
Growth Consultant/Advisor for high-potential subscription apps (hit reply if you want to chat - bonus if you’re in Education, Meditation & Cooking categories)
Acknowledgments 🙏
Huge thanks to Thomas Petit, Kurtis Morrison, and Jakub Chour for their feedback on this edition.