You could have adverts in addition to IAP, though you should be careful where you put adverts as they are disruptive to gameplay and lessen the quality of presentation - plus only really worthwhile on games that have enough (viral) downloads.
In app could be anything, such as unlocking other stages sure, usually they are something that will make advancing in the game easier like extra lives or new characters.
Best researching how the top grossing games do it like Candy Crush and Clash of Clans:
https://thinkgaming.com/app-sales-data/