That's a pretty good method , i like it. I guess average time based ads would be better. Which means i'll need to finish the game fully and insert ads after i figure out the time it would take to finish levels etc especially with skill progression causing a player to see less ads seems a great idea.
Thanks for the reply
Yes it is. In fact if your game is a top down shooter, say like Hotline Miami where the player WILL lose lives it'd be a bad idea to make it a life counter since it has a 1 hit death mechanism. That's what takes a 5 star game into a 1 star game.
On the other hand, if it's level-based the player will be able to complete levels faster thus will feel more invaded by ads as he gets better. So sometimes it's better to create a "The better the player = The less ads" system
or just go with a time counter instead like display ads every 20 minutes.
It's good to get feedback from newbies of your game [casuals and first time players preferably. not skilled players] before you can decide.