How to place interstitial ads the right way

Placing interstitial ads in your game is a delicate art – you want to increase revenue without compromising retention and user experience. In this class, we’ll give you tips on how to find that sweet spot, plus 4 interstitial placements you can A/B test.

Welcome back everyone. In the previous session, we explained why monetizing with rewarded video ads is crucial to your game’s success. But your ad monetization strategy shouldn’t end there – to really maximize your ARPDAU, you need to roll out a combination of ad units.

In this session we’ll be focusing on interstitial ads. By the end of this video, you’ll know exactly what they are, why they can provide a big boost to your game’s revenue, and how to best implement them to protect the user experience and retention – all while maximizing ARPDAU.

The fundamentals

So what are interstitial ads? Interstitial ads are full-screen, system-initiated ad units, meaning you as the developer decide when users see the ads and how often.

Remember that’s in contrast to rewarded video ads, which are user-initiated, meaning users choose to open up the ad.

Interstitials give users the option to exit or skip, typically after 5 to 7 seconds, and today they can hold many types of ad creatives like static images, video ads, and playable ads.

This difference means it’s important to be careful with your interstitial placement strategy – you don’t want to risk frustrating users with ads at moments that disrupt the experience.

The good news is that with frequent A/B testing and using the best practices we’re about to share, you can avoid damaging retention rates and see a big uplift to your revenue with interstitials.

So if there’s a risk involved, what’s the fuss about?

So if there’s a risk involved, what’s the fuss about? Think of it like this. Your game has a spectrum of users – depending on your genre, as little as 3% of users might spend money in your game store.

You’ll typically have a larger number of users who aren’t willing to spend money, but are happy to spend their time instead in order to access premium content.

Those users, which might constitute anything between 20 to 35% of your active users, will engage with user-initiated ads like rewarded video.

But then what about the remaining significant percentage of users who neither engage with rewarded videos or pay for in-app purchases?

It would be a missed opportunity not to earn revenue from them. And that’s where system-initiated ads like interstitials and also banner ads come into play.

This ad unit is especially useful for games that don’t have a very complex in-app economy, like hyper-casual games. Having said that, casual and midcore games can also serve interstitials to their users – we’ll dig in to how in a bit.

A quick mention of KPIs

We’re about to dive into the best placements for interstitials. But before that, let’s quickly go through the KPIs you should be tracking and optimizing for.

You’ve got your ad data – which includes impressions – or how many times the ad was seen…

and engagement rates – what percentage of your daily active users are seeing at least one interstitial a day.

You’ve also got your in game analytics like retention and playtime.

If you have a long playtime on average among your users, it means you have more time to show interstitials.

For example, you may add an interstitial placement after level 8, rather than level 1, because you know many users will get to this stage in a single session.

How to find the best placement strategy through A/B testing

Now let’s move on to the juicy stuff – how to actually perfect your interstitial placement strategy.

You should be constantly A/B testing to maximize the value of your “sweet spot” – the point where revenue is as high as it can be, with a minimal impact on your retention.

As you can see in the chart, the more ads you show, the higher your ARPDAU. But, at a certain point, retention starts to drop because the frequency of the interstitial ads may frustrate users. The point where the two lines meet is the sweet spot you want to find.

Here are some things you can A/B test to maximize the value of your sweet spot.

Before jumping in, I want to highlight two things. First, is that it helps a lot to make sure all the ad network partners you’re working with set up a 5 to 7 second ‘X button’ that allows users to exit out of the ad.

Second, it’s generally best to show interstitials when users are experiencing positive emotions, like when they’re winning, getting a reward, or leveling up. Avoid showing them when the user might be frustrated, like after losing a level. With that said, let’s jump in.

1. Cooldown timers

The first A/B test I’d recommend revolves around cooldown timers – which is the interval of time between each interstitial ad you show your users.

For example, you might try a 20 second timer vs a 30 second timer, or 40 seconds versus 80 seconds. For games where users have a shorter session length, like hyper-casual, it’s better to make the interval of time shorter.

Games with longer session lengths have the luxury of being able to experiment with a variety of short and long cooldown timers, while measuring the impact on retention and ARPDAU.

2. Experiment with Levels

Showing interstitials at different stages in the game, for example after level 1 versus level 8, might also impact your sweet spot.

If you show an ad too early, like at level 1, a user who hasn’t gotten hooked into your game yet could easily get frustrated and stop playing. But if they’ve progressed further in the game, and only see an interstitial at a later level, you can reduce the likelihood of them churning.

In fact, we’ve seen a connection between showing interstitials only at later levels and strong late retention rates – for instance high Day 7 retention.

Having said that, if your game has a weaker late retention rate – let’s say D7 retention for your game is below your genre benchmarks, then it’s best not to wait too long before showing interstitials… you don’t want to miss your chance to monetize these users before it’s too late and they churn.

3. Show interstitials before the end level page vs. after the end level page

The final A/B test you should run is showing interstitials either before or after they see the “end level” screen.

If you’re thinking about showing interstitials after the end-level screen, you want to show it only when users choose not to engage with a rewarded video. Let me explain….

Sometimes, when a user completes a level, developers offer them the opportunity to double their winnings in exchange for watching a rewarded video ad. If the user exits out of this screen and ignores the offer, that may be a smart time to show an interstitial.

It’s important to say, some users might feel frustrated being shown an ad right after choosing not to open the rewarded video. And that’s exactly why you should A/B test this against showing the interstitial before the end screen.

Don’t forget to segment

Remember when I said casual and midcore games can also use interstitial ads? Segmentation is what makes that possible. There are several tools to set up segmentation, including one we have in ironSource’s mediation platform.

Segmentation allows you to split your users into groups based on their in-game behavior and value to you. You can then serve certain types of ads to specific user groups.

For example, for casual or midcore games with more complex in-game economies and a bigger focus on in-app purchases, you can split users into payers and non-payers. Then, you can only serve interstitial ads to your non-paying users.

That’s a very common practice, and the rationale behind it is that the potential negative impact on retention caused by serving interstitials to paying users… isn’t worth the boost in revenue from interstitial ads.

You can also segment users by ad whales and non-ad whales. Ad whales are users who generate significant revenue for your app through rewarded videos, and non-ad whales are users who generate a smaller amount of revenue.

For ad whales, who are valuable for your ARPU and more likely to convert into payers, we don’t recommend serving interstitial ads.

For your non-ad whales, who tend to be engaged enough to watch rewarded videos, but not enough to generate serious revenue – you can serve them interstitials with a measured approach.

Always A/B test to check the perfect frequency and to see the value these ads generate. If they’re hurting retention and overall ARPU, stop showing them.

Final takeaways

To finish, make sure you stay on top of market trends. Keep tabs on other games in your category – and even outside your category – to get inspiration and see what new trends are emerging in terms of innovative new placements and strategies for interstitials.