Are Interstitial Ads Really Bad for Monetization?
Launching a game after countless hours of development is just the beginning. The real challenge comes afterward—analyzing game data to optimize revenue.
This process is not only resource-intensive but also highly uncertain, with no guaranteed success. That’s why many developers default to benchmarking successful games—a low-risk, quick-to-implement fallback. As a result, monetization strategies across casual games begin to look alike.
The impact of this uniformity is clear to both industry professionals and players. Even while playing a newly downloaded game, users often think:
“This is probably where a forced ad will appear.”
“At this difficulty, I’ll likely need to watch a rewarded ad to progress.”
A Shared Mindset
Through discussions with monetization managers from casual gaming companies worldwide, a consistent pattern emerges. Not only do casual games share similar monetization strategies, but the perspectives of those managing monetization also align.
Most aim to increase in-app purchase (IAP) and rewarded ad revenue, while viewing interstitial ads as a trade-off—an unavoidable disruption best kept to a minimum.
In many cases, studios reduce or eliminate interstitials, believing that prioritizing IAP will lead to stronger monetization. This, however, often creates a self-fulfilling prophecy: when interstitials are intentionally underused, their impact remains small, further reinforcing the belief that they’re ineffective.
The Cost of Early Interstitials
There’s no question that interstitial ads can negatively impact retention. Players dislike them, and the data supports this.
According to research conducted by the Airbridge Data Science Team, players who are shown interstitials early in their gameplay churn significantly faster than those who encounter them later. This pattern has been observed across dozens of games.
The bigger question, however, is:
Who exactly is leaving?
Are studios losing potential whales, or casual players who likely wouldn’t monetize anyway?
If high-value users exit early because of excessive interstitials, the lost opportunity includes not just ad revenue but also future IAP that may have materialized later in the user lifecycle. This is a core reason why many casual game PMs remain wary of interstitials—they fear weakened retention could undermine monetization potential, particularly from whales.
Case Study: When Interstitial Ads Help vs. Hurt
Take Game A, for example.
A six-month data analysis revealed:
Players exposed to early interstitials watched 8% fewer rewarded ads
Their 14-day LTV (excluding interstitial revenue) was 7% lower
Players with higher interstitial exposure had 11% lower 14-day LTV from IAP and rewarded ads combined
On the surface, this suggests that interstitial ads hurt monetization. But a contrasting case offers a different perspective.
In Game B, an experiment increased interstitial frequency by 1.6x.
The outcome was striking:
+23% interstitial ad revenue
+2% rewarded ad revenue
+9% IAP revenue
How did this happen? Three key factors aligned:
Short retention cycles in casual games
Most players churned early. Increasing interstitials ensured that more users saw ads before leaving, increasing revenue from users who wouldn’t have converted otherwise.
Stronger incentive to purchase the ad-removal package
With more interstitials shown, players were more inclined to pay to remove them—boosting IAP performance.
Higher retention among ad-removal purchasers
Players who removed ads stayed longer and engaged more deeply, driving up rewarded ad revenue.
Interestingly, even Game A—despite early negative patterns—ultimately saw a 14% increase in total LTV, driven by similar dynamics observed in Game B.
Are We Creating a Self-Fulfilling Prophecy?
Unity’s 2024 monetization insights point to explosive growth in the rewarded ad market, indicating a shift in monetization strategies toward rewarded formats.
But before taking this trend at face value, we must ask:
Is this a sign that interstitials are truly declining in importance?
Or are we seeing the result of the industry’s collective bias against them?
If developers assume interstitials are ineffective and reduce their usage, the resulting drop in performance becomes a self-reinforcing cycle. Reduced exposure leads to reduced revenue—confirming the original belief.
This feedback loop could cause the industry to prematurely abandon a viable monetization stream.
Are We Wrong?
It’s worth revisiting our assumptions:
Do interstitials really drive whales away?
Do the short-term revenue gains from showing interstitials to more players outweigh the long-term value of retaining potential high spenders?
What if increased interstitial frequency actually boosts ad-removal purchases—leading to greater revenue overall?
These aren’t theoretical questions. They’re testable—and they should be tested, using real data from actual player behavior.
The Bottom Line
This isn’t an argument for increasing interstitials across the board. That would be an oversimplification—and a risky one.
But the industry needs to challenge the belief that interstitials are inherently bad.
Ask:
Are we benchmarking “less interstitial” games because they succeeded, or because we believe they succeeded because of that choice?
Have we been interpreting past experiments too broadly—and applying conclusions from specific games too generally?
Yes, players often dislike interstitials.
But the more important question is:
Are we letting our assumptions blind us to their true potential?
Instead of relying on assumptions or industry averages, teams need to look inward—toward real, tested data in their own games.
“Numbers reveal the truth—if we’re willing to test for it.”
