How to Build Ad Monetization without Undermining Player Retention: Expert Insights by Anton Zaluskyi

In June 2025, Google and Deloitte published a global study confirming what experienced developers have long understood: well-integrated ads in mobile games can drive revenue without compromising player retention. According to the report, players who view ads as a positive experience are three times more likely to return to the game and significantly more inclined to make in-app purchases.

In light of this data, we spoke with industry expert Anton Zaluskyi, founder of Smart Project GmbH, to gain a deeper understanding of how to structure an ad monetization strategy that not only preserves retention but also actively enhances it.

Anton Zaluskyi is an entrepreneur with over 15 years of experience in mobile and social game development. He founded Smart Project GmbH and led the creation of several hit titles. One of them is 5 Differences Online, a game that held the number-one spot in one of the Commonwealth of Independent States' (CIS) social networks for years and ranked among Facebook's top 100 grossing global apps. With millions of downloads worldwide, Zaluskyi's games are renowned for striking a balance between monetization and a frictionless player experience, and his company successfully operates mobile games with 500,000 daily active users. His data-driven approach to adaptive difficulty and ad delivery attracted interest from one of Europe's largest mobile publishers, who eventually acquired a stake in the company. Beyond his commercial success, Zaluskyi also contributes to the broader advancement of the mobile gaming industry by sharing his insights with other developers and helping shape sustainable monetization practices across the sector.

How Players Perceive Different Ad Formats

Before designing a monetization system, it's essential to understand how players perceive different ad formats. According to Zaluskyi, many teams skip this foundational step in pursuit of short-term revenue, which often leads to steep churn in the early stages post-launch.

"Banner ads have become background noise; they don't interfere with gameplay when placed correctly. Rewarded video is viewed positively because players gain something valuable and can choose whether or not to watch. Interstitials are the most sensitive format. They should only appear at natural breaks, like the end of a level. At the start of a level, rarely. At app launch, it's only available to loyal users who have been active for several days. Mid-level, only if gameplay is prolonged and the ad unit has a high eCPM," Zaluskyi explains.

This meticulous, player-first strategy has paid off. Zaluskyi's latest hit, Kitty Sort, demonstrates his deep expertise in mobile game monetization: over 100,000 new players install the game every day, driven by a well-calibrated advertising strategy that enhances rather than disrupts the user experience. By integrating ads as a natural part of the gameplay flow, Zaluskyi has managed to balance revenue generation with long-term player retention. This approach sets his work apart in a crowded and competitive market.

What to Test: A/B Frameworks for Sustainable Monetization

Even the most well-informed assumptions require validation through testing, and for Zaluskyi, data is the cornerstone of any effective monetization strategy. Without systematic A/B testing, it's nearly impossible to measure how different ad mechanics affect distinct player segments.

"We test everything, when to start showing ads, how often to show them, what the reward should be for video ads, and how frequently banners should refresh. We always segment by user lifecycle stage, because new users are far more sensitive to ad pressure than players who've been engaged for a week," he says. "Interstitial performance is especially critical. Sometimes, the best decision is not to show an ad at all if the CPM is too low. In one case, we reduced the number of impressions while maintaining eCPM, which led to improved retention without a drop in revenue. That's Pareto in action: 20% of impressions generate 80% of results," Zaluskyi adds.

This analytical rigor has become deeply ingrained in his company's culture. The team doesn't just build hypotheses; they test them continuously in live environments and adjust based on user behavior.

Common Mistakes That Undermine Retention

Even experienced developers can fall into monetization traps that damage long-term engagement. For Zaluskyi, the key is not just how much revenue a game generates, but how that revenue is earned.

"Players will accept ads. What they won't accept is disrespect for their experience," he says. "The most common mistake is showing ads in the very first session. That's the fastest way to lose a player. The second is ignoring player feedback. When users complain that ads are annoying or disruptive, that's actionable insight. And the third mistake is failing to plan for long-term retention. If you monetize without a retention strategy, you're just cashing in once."

Zaluskyi has repeatedly turned down short-term revenue opportunities that threatened long-term growth. That discipline has allowed Smart Project to create games that not only monetize effectively but also retain players for years. In his view, respectful ad design, data-informed iteration, and strategic restraint are what turn monetization from a necessary evil into a sustainable driver of product growth.