Economic pressures are forcing consumers to reduce spending. This downturn affects in-app purchase (IAP) revenue, traditionally central to advertiser strategies. The problem: focusing only on those likely to make purchases creates unstable campaigns dependent on high-value users.
Market Opportunity
The in-app advertising (IAA) sector presents significant growth potential. Projections show expansion from $110.9 billion in 2021 to $343.5 billion by 2027, with a compound annual growth rate (CAGR) of 20.73%. Casual gaming, social, and entertainment apps are particularly suited for IAA.
Previous Challenges
Advertisers lacked timely impression-level revenue data, preventing effective optimization. Modern platforms now enable advertisers to maximize ROAS through IAP, IAA, or hybrid monetization strategies.
Key Benefits
IAA optimization targets engaged users likely to interact with ads, driving higher engagement and reducing acquisition costs. Interestingly, users who interact with ads are more likely to engage with the app and make purchases.
Performance Results
Early adopters reported impressive results:
- Median 11% ROAS increase
- 24% IAA revenue lift
- 22% cost-per-install reduction
Limitations
Ad inventory limitations exist—users can view only finite ads. Implementation requires ad revenue postbacks through measurement partners, though proxy events offer alternatives.
Conclusion
IAA optimization presents minimal-risk revenue diversification complementing traditional IAP strategies.
