My advice would be to focus your plans on In-App Purchase. If you do it right you can improve both retention and monetization with a good in-game shopping experience.
See also these resources:
3 Reasons for Adding In-App Purchase by SOOMLA
Comparison for IAP vs. Ads by Flurry
On that, would you think that sometimes social games today are going too far in their in app purchase?
In the sense of making the game pay-to-win, or just intentionally get players stalled somewhere down the road, to make them pay to progress.
Zynga lately announced about their up coming project, i think its a theme park ville somewhat, admitting that in the past they've been using that strategy to monetize their games, but are going to change this way of doing things, allowing free to play players to eventually gain access as much as paid players.
But that leads to a much deeper discussion of where to draw the line, which I am curious of you and everyone here's opinion.