Every day, millions of people download free apps from the app stores—games, social media platforms, productivity tools, you name it. But here's what most users don't think about: these apps aren't actually free. Someone has to pay for the development, the servers, the updates, and yes, the developers need to eat too! So how do these "free" apps make money? The answer lies in advertising revenue, one of the most popular mobile app monetisation strategies out there.
Ad-supported apps have become the backbone of the mobile app economy. They allow developers to offer their creations without charging users upfront, whilst still generating income through carefully placed advertisements. It sounds simple enough, but like most things in app development, there's more to it than meets the eye.
The best ad-supported apps make advertising feel like a natural part of the user experience, not an interruption to it
Getting the balance right between earning advertising revenue and keeping users happy is tricky business. Too many ads and people will delete your app faster than you can say "banner advertisement." Too few ads and you won't make enough money to keep the lights on. That's why understanding the pros and cons of ad-supported apps is so important—it could be the difference between building a sustainable business and watching your app disappear into the digital graveyard.
What Are Ad-Supported Apps?
Ad-supported apps are mobile applications that generate revenue by displaying advertisements to users rather than charging an upfront fee. Think of them as the free apps on your phone that show you adverts between games, at the bottom of your screen, or before videos play.
I've worked with countless businesses over the years who've chosen this monetisation model—and for good reason. Users can download and use these apps without paying anything, which makes them incredibly appealing. The catch? Well, there isn't really a catch for users, but app developers need to carefully balance making money from ads whilst keeping their users happy.
Common Types of Ad-Supported Apps
- Social media platforms like Instagram and TikTok
- Mobile games such as Candy Crush and Subway Surfers
- News and media apps including BBC iPlayer and Sky News
- Music streaming services like Spotify's free tier
- Weather and utility apps
The business model is straightforward: advertisers pay the app developer to show their ads to users, and the developer shares a portion of that revenue with app stores and ad networks. It's a win-win situation when done properly—users get free apps, developers make money, and advertisers reach their target audience.
What makes this model particularly attractive is that it removes the biggest barrier to app adoption: asking people to pay before they've even tried your product.
The Main Benefits of Using Advertising Revenue
After working with countless app developers over the years, I can tell you that advertising revenue offers some pretty compelling advantages for mobile app monetisation. The biggest benefit? Your users get to enjoy your app completely free of charge. This removes the barrier that stops many people from downloading apps in the first place—nobody has to pull out their credit card or worry about subscription fees.
Free apps naturally attract more downloads. When users browse app stores, they're much more likely to try something that costs nothing. This means you can build a larger user base faster, which is exactly what advertisers want to see. More users equals more eyeballs on ads, which translates to higher revenue potential for you.
Key Revenue Advantages
- No upfront costs for users means higher download rates
- Passive income stream that doesn't require user purchases
- Revenue scales automatically with user growth
- Multiple ad formats allow for optimised earnings
- Works well for apps with high engagement rates
The beauty of advertising revenue lies in its scalability. Once you've integrated ads properly, your income grows alongside your user base without requiring additional development work. Users who might never spend money on in-app purchases or premium features can still generate revenue through their engagement with advertisements.
Start with a small number of well-placed ads and gradually optimise based on user behaviour data—too many ads too quickly will drive users away before you can monetise them effectively.
The Biggest Drawbacks You Need to Know
I've worked on dozens of ad-supported apps over the years, and whilst the revenue potential is attractive, there are some serious downsides that can make or break your app's success. Let me be straight with you—these aren't minor inconveniences; they're genuine challenges that need careful consideration.
The most obvious problem is user experience degradation. Nobody downloads your app hoping to see adverts, and poor ad placement can turn users away faster than you can say "uninstall". I've seen brilliant apps fail because they bombarded users with too many ads or placed them at the worst possible moments.
The Main Problems You'll Face
- Slower app performance due to ad loading times
- Increased data usage from downloading ad content
- User frustration with interruptions and pop-ups
- Higher app abandonment rates
- Potential security risks from third-party ad networks
- Unpredictable revenue streams
Revenue inconsistency is another major headache. Ad earnings fluctuate based on seasonal trends, market conditions, and user engagement patterns—you can't rely on steady monthly income like you would with subscriptions. Plus, you're essentially handing over control of part of your user experience to advertising networks, which can display content that doesn't align with your brand values.
Different Types of Ads You Can Use
After years of working with mobile app clients, I've seen every advertising format under the sun—some work brilliantly, others make users want to throw their phones across the room! The good news is there are plenty of options to choose from when you're planning your advertising revenue strategy.
Banner ads sit at the top or bottom of your screen and stay there whilst you use the app. They're the least intrusive but also generate the smallest revenue per impression. Interstitial ads take over the whole screen between natural breaks in your app—like between game levels or when switching screens.
Video and Rewarded Formats
Video ads have become massive in recent years; they can be short clips that play automatically or longer videos users choose to watch. Rewarded video ads are particularly clever—users get something valuable in return for watching, like extra lives in a game or premium content access.
The key to successful mobile app monetisation isn't just picking the right ad format, it's about placing them where they feel natural to the user experience
Native ads blend into your app's design so well that users barely notice they're advertisements. They feel more like content recommendations than traditional ads, which means higher engagement rates and better user satisfaction.
How Much Money Can You Actually Make?
Right, let's talk numbers—because that's what you really want to know, isn't it? The truth is, ad revenue varies wildly depending on your app's performance and audience.
Most apps using banner ads earn between £0.10 to £1.00 per 1,000 impressions (that's called CPM). Video ads pay much better, often £5-25 per 1,000 views. Sounds decent until you realise you need serious user numbers to make real money.
What Affects Your Earnings
Your location matters more than you'd think. Users in the UK, US, and Australia generate higher ad rates than those in developing countries. Your app category plays a role too—finance and shopping apps typically earn more than gaming apps.
User engagement is the real game-changer though. An app with 10,000 highly active users often outearns one with 100,000 casual users.
Realistic Expectations
- Small apps (under 10,000 users): £50-500 monthly
- Medium apps (100,000+ users): £500-5,000 monthly
- Large apps (1 million+ users): £5,000+ monthly
The sobering reality? Most apps never reach 10,000 active users. Building a sustainable ad-supported business takes time, patience, and often a bit of luck with user acquisition.
Best Practices for Implementing Ads
Getting advertising revenue right in your mobile app isn't just about slapping some banner ads everywhere and hoping for the best. Trust me, I've seen too many apps crash and burn because they rushed into monetisation without thinking it through properly.
The golden rule is simple: your users come first, always. If people can't use your app properly because there are ads blocking buttons or interrupting every action, they'll delete it faster than you can say "advertising revenue". Start with fewer ads and gradually increase them as you understand how your users behave.
Timing and Placement Strategy
Where you put your ads matters more than you might think. Natural break points work best—between levels in games, after completing tasks, or during loading screens. These moments feel less intrusive because users expect a brief pause anyway.
Test different ad placements with small groups of users before rolling out to everyone. What works for one app might be terrible for another.
Key Implementation Rules
- Never place ads near important buttons or navigation elements
- Give users a clear way to close ads (and make sure it works!)
- Test loading times—slow ads will frustrate users quickly
- Match ad content to your audience demographics
- Monitor user feedback and adjust accordingly
Remember, successful advertising revenue comes from keeping users happy and engaged, not from maximising every possible ad opportunity. The apps that get this balance right are the ones that build sustainable income streams.
Common Mistakes That Kill User Experience
I've seen plenty of apps crash and burn because developers got greedy with their ad placement. The biggest mistake? Showing ads immediately when someone opens your app. You're basically telling users that making money is more important than their experience—and trust me, they notice.
Another massive error is using ads that are too similar to your app's content. These "native" ads might seem clever, but they trick users into clicking accidentally. When people realise they've been fooled, they get annoyed and often delete your app altogether.
The Most Common Ad Placement Blunders
- Placing banner ads right next to navigation buttons
- Using full-screen ads that can't be closed easily
- Showing video ads with sound that starts automatically
- Displaying ads during time-sensitive actions like gaming
- Making close buttons too small or hard to find
Pop-up ads are particularly dangerous. They interrupt what users are trying to do and create friction. If someone is reading an article or playing a game, the last thing they want is an ad jumping out at them.
The golden rule? Always put user experience first. Yes, you need revenue, but destroying the experience for a few extra clicks will cost you users in the long run. Test your ads thoroughly and listen to user feedback—they'll tell you when you've gone too far.
Conclusion
After working with countless clients over the years, I've seen advertising revenue transform mobile app businesses—sometimes for the better, sometimes not so much. The truth is, there's no universal answer to whether ad-supported apps are right for your project. It depends on your users, your content, and most importantly, how well you execute the strategy.
What I can tell you is this: the apps that succeed with advertising revenue are the ones that put user experience first. They understand that every ad placement is a trade-off between monetisation and user satisfaction. They test religiously, they optimise constantly, and they're not afraid to remove ads that aren't working—even if it means short-term revenue loss.
The mobile app market isn't getting any less competitive, and users aren't getting any more tolerant of poor experiences. If you're going to use advertising revenue, you need to do it properly. That means choosing the right ad formats, working with reputable networks, and always keeping your users' needs at the centre of every decision.
Remember, a mobile app that generates modest advertising revenue but keeps users happy and engaged will always outperform one that maximises short-term ad income but drives people away. The best monetisation strategy is one that your users barely notice—and that's the real challenge.
