Mobile app monetization has opened the digital world up to many creative and interactive ways of monetization. Where on one end the world witnessed an emerging mobile advertising industry, others introduced multiple strategies such as in-app purchasing, subscriptions etc. All these and much more came out of the need for monetizing mobile games and apps. To make such processes of monetization easy especially by in-app advertising, many ad mediation platforms and mobile ad networks emerged.

When it comes to choosing the perfect model for game or app monetization, publishers look forward to choosing the best. The goal is to opt for the most rewarding model that essentially increases revenue generation without much hassle. Therefore, publishers are often sceptical about whether in-app advertising can lead to greater revenue or in-app purchasing? Here is all that you need to know!

What is In-App Advertising?
In-app advertising is a mobile game and app monetization solution that enables revenue generation based on the ads served within a mobile game or app. For monetizing a mobile game or an app a publisher can make a direct deal with an advertiser for serving in-app ads. If not, a publisher can opt for an Ad Mediation platform or a single Ad Network for enabling in-app advertising.
What is In-App Purchasing?
In-app purchasing is a mobile game and app monetization strategy that enables revenue generation based on in-app sales. To execute this strategy, game or app publishers often put up special features and upgrades for sale within their mobile game or app. Besides just features and upgrades, in-app purchasing has evolved in a much more creative way. Today we see publishers selling merchandise and goodies within their mobile games and apps which is a prominent attraction for users.
Now coming to the real debate, in-app advertising revenue vs. in-app purchase revenue. Which one among these will take over the revenue charts in the upcoming years?
In-App Advertising Revenue VS In-App Purchase Revenue
According to the Business of Apps Android and iOS app revenue reached 111 billion dollars revenue in 2020 which was a 24% increase that 2019. In 2020, as reported by TechJury, app revenues soared up to 581.9 billion dollars. Whereas Statista has forecasted that by 2023 mobile apps will be able to generate more than 935 billion U.S. dollars in revenues.
But where do in-app advertising and in-app purchases position themselves within these statistics? Here are the key finding related to both:
As mentioned by TechJury, users worldwide have spent over 380 billion dollars on in-app purchases in the year 2020 adding to the greater chunk of app revenues. However, on the other hand, Statista believes that out of the 935 billion dollars expected in 2023, paid downloads and in-app advertising will stand out.
eMarketer mentioned Sensor Tower estimating the global in-app purchase revenue for first half of 2020 to be 23.4% higher than 2019. Out of this, 21.2% in-app purchasing was done within mobile games alone.
All these statistics show rapid growth in revenue generation by both in-app advertising and in-app purchase. It is important to keep in mind that not all models can work for your mobile game or app to generate revenue just as they do for others. To save your time and energy we have a great solution to end this tug of war between in-app advertising and in-app purchase revenue. The solution is:
Hybrid Monetization
To save mobile game and app publishers from making harder choices between in-app advertising and in-app purchase, hybrid monetization came as a lifesaver. Hybrid monetization is when you merge two monetization strategies and make the most out of them. So whether in-app revenues go up because of advertising or purchases, a publisher makes the most out of them together.
In the case of merging these two models, a publisher can easily run ads to promote in-app purchases that he or she has deliberately planned. Whereas, other ads from various advertisers can add to the incremental revenue that a publisher earns.
Currently, there is no standing point in terms of crediting which model from between in-app advertising or in-app purchase stands out. Therefore, hybrid monetization is a perfect way to end the rift and make the most out of the revenue generation.