The Definitive Guide to Mobile Monetization

Transcription

1 The Definitive Guide to Mobile Monetization Appia Footer320 Blackwell Street Durham, NC

2 Introduction There is no silver bullet to mobile monetization. Crafting a monetization strategy that drives revenue by creating a valuable, engaging user experience is key. But users demand that a majority of content they consume on their mobile devices be free. In fact more than 90% of all apps across App Store and Google Play now are free to install. This creates a unique challenge to developers creating a monetization strategy post-install. Consider which monetization method is ideal for your user experience and answer these critical questions. Do I want to provide upsell/cross-sell opportunities in app? Do I want to add advertising to my in-app experience? What innovative ad units are available and performing well? What is the right balance between creating a positive user experience and bringing in as much revenue as possible? What level of flexibility do I have in testing and exploring monetization tactics? In this guide, we will outline multiple mobile monetization tactics and strategies to consider as you exploring driving revenue through your apps and mobile web sites. Monetization Methods 101 There are several different ways that publishers can monetize their content. Paid apps, subscriptions, in-app purchases, and ad monetization are all viable options for publishers and developers looking to drive revenue. Publishers can leverage one or several of these methods to monetize their traffic. Whether an app is priced at 99 cents or at a premium price, making the pricing decision can be tough. Paid app pricing works best for static content that doesn t change much. This is the easiest, most straightforward monetization method, and users are willing to pay if there is a perceived value. When users come across a paid app they are interested in, they will typically look for a free alternative before going with the paid version. 2

3 3

4 Additionally, once users pay for an app they expect all future updates for free, meaning publishers can t make additional money without advertising or in-app purchases. Subscription services are great for apps that stream media, newspapers, and magazines. Apps that are refreshed regularly, or use cases that involve long sessions on a regular basis are good candidates for subscription monetization. Subscriptions are a great way to see a steady revenue stream, but there is typically a single, set price for all users. Power users may have been willing to pay more, but a higher price could deter less frequent users. In-app purchases are ideal for apps with a large amount of content or apps that have a deep, repetitive experience. Games traditionally perform well with in-app purchases. Because the app is free upfront, there is a low barrier of entry and users only pay for upgrades as they go. Gartner predicts that 48% of all mobile revenue will come from in-app purchases by Mobile advertising is an additional monetization strategy that can work for any app or mobile website. In fact, research from UK-based Oxygen8 Group found that 54% of mobile users want to receive discounts or coupons from brands they engage with. Additionally, 62% of those polled say that their purchasing behavior has been influenced by mobile ads. This data is key, and shows that users actually want to receive targeted, relevant mobile ads. There are seemingly endless combinations of formats and placements to choose from, allowing publishers to customize the advertising experience to their audience. Balance is important though. If too many ads interfere with an app experience, publishers run the risk of losing users and in turn, losing revenue. 4

5 Innovative Ad Units: The What, Where, and How? New ad units are emerging all the time due to the fast pace of the mobile ecosystem. This is great for publishers because they can leverage the ad formats that perform best for their audience. The What? Currently there are several types of ad formats available: standard, video, rich media, and native ads. Standard ads refer to more traditional mobile ad units like static banners and interstitials. Video ads play short video clips, typically around 15 seconds each. Rich media ads entice users to interact with the ad to access the content. Native ads appear seamlessly within the content of a mobile site or app. Banners and Interstitals Banner and interstitial advertisements are easy to create and the most simple ad unit to integrate into an app or mobile website. While these ads are the easiest to implement, they are still highly successful for Publishers looking to monetize traffic. Users expect some level of advertising in exchange for a free app. Video Ads Video Ads offer a higher conversion than other ad units, but there is fewer inventories available. There are several different ways to integrate video ads into a mobile site or app. Prerolls are videos that run before users can access content or gain entry into an application. 5

6 There are also different ways to initiate user interaction with video ads; push to play and in-app auto play options. Video ads are high performing and offer a superior user experience and compelling calls to action. Rich Media Ads Some of the most sophisticated mobile ad formats, rich media ads are technically advanced and highly engaging. Rich media ads require users to touch, swipe, shake, or scroll to access content. Because these rich media ad format is so technically complex, it is important to test and ensure all of the features are functioning properly. Native Ads Native ads are made to match the look and feel of an app or site. This ad format has been growing in popularity recently. Despite the growing popularity, native ads have had their share on controversy among Publishers. Opponents of native ads feel that this ad unit is an advertorial and misleading to users. Mobile marketing is not about misleading users. The native ad format is meant to be non-intrusive while still offering them targeted ads they would find relevant. The Where? Placing advertisements within an app or mobile website should feel natural, not overly disruptive to the user experience. Some examples of places where ads can be served are at breaks in game play, the beginning or end of content, or as a More Apps button embedded within an app s navigation. It is important for publishers to balance the number of advertisements shown while maximizing their potential monetization. Too many ads will create a negative user experience, and the potential for losing that user for good. Serving relevant, targeted ads based on a user s behavior, location, and interests will enhance user experience, creating a higher lifetime value (LTV). The How? How can publishers decide which ad formats are best for their audience? Testing! 6

7 7

8 8 All of the aforementioned ad units can be A/B tested for optimization. Regardless of the ad unit, creative should be rotated frequently to combat ad blindness. Keeping creative fresh, engaging, and relevant will increase ad monetization. Learning what drives user performance in a controlled A/B testing environment means more revenue. Balancing User Experience In a world where mobile users largely demand content for free, Publishers need to find a way to bring in revenue. If ads weren t bringing in enough cash, the simple solution would seem to be clear: add more advertisements! Unfortunately the resolution is not that easy. Ad space that never results in a high volume of impressions, clicks, or installs is not attractive to mobile advertisers. Additionally, overwhelming users with ads will disengage your users. A better solution to drive more revenue without disrupting the user experience is to integrate more interactive ad units that fill at higher price points. Advertisers are willing to pay a premium for ad space that returns highly engaged users. Striking a balance between serving contextually relevant ads to users while maximizing revenue is a challenge every publisher faces. Positive experiences with apps that serve meaningful, targeted advertising is the key to success for mobile publishers. Publisher KPI s to Consider There are countless ways that publishers can measure their performance, but it is important not to get stuck into analysis paralysis and drive meaningful revenue. Here is an overview of some of the popular ad spend models that are used today. CPM Cost Per Mille or Cost Per Thousand impressions CPC Cost Per Click CPA Cost Per Action CPI Cost Per Install

9 Publishers prefer each model for different reasons. Some prefer to work on a CPM basis because they generate revenue any time an ad is shown. CPC is pretty straightforward. Any time a user clicks an ad the publisher gets paid. Mobile Advertisers are not typically inclined to work on a CPC basis, especially due to the small screen size and accidental clicks that happen on mobile. CPA and CPI models are becoming popular because they are performance-based. CPA can mean any number of actions, including video views, registration, etc. In the mobile app space, many publishers are moving to a CPI or Cost Per Install model. In this case, publishers are paid when a user clicks on an ad, is taken to the App Store or Google Play, and downloads the app. Many mobile publishers like being paid on a CPI basis because they are able to show quality traffic is being driven from their site or app. CPI rates are also higher than CPM rates because advertisers are willing to pay more for active, engaged users with intent. Optimization Optimizing campaigns and inventory is crucial in the fast paced world of mobile marketing. Advertisers will be quick to leave if they aren t seeing performance. Publishers can optimize on ad types, placements, device, and use data not only to make informed decisions, but to increase bid rates from advertisers as well. As discussed earlier, there are plenty of ad types for publishers to integrate into their apps or mobile websites. Finding out what ad formats are going to resonate with an audience and drive engagement is a bit of trial and error. Not only can publishers optimize on the ad type itself, testing different ad placements can help optimize on conversions as well. Some examples of potential placements include exit interstitials vs interstitials between levels, a more apps button within an app s navigation bar that takes users to an app wall vs a free apps tab at the bottom of the screen, native ads 9

10 10

11 embedded within content vs native ads that come at the end of content. There are countless ways to test and tweak ad placements. Targeting can greatly enhance optimization in many different ways. If testing has shown that Android users respond better to a certain type of ad, but ios users typically prefer a different format, publishers can optimize on this information to give users a great experience while increasing the likelihood of conversion based on their device. Something that publishers need to keep a close eye on is ad serving. Serving the same ads to the same user multiple times is a poor user experience, and will lead to lower conversion rates. If the user didn t convert the first time, it is unlikely that they will convert the second or third time they are shown an ad. Another way to optimize ads that are shown in-app is to understand what apps the user already has downloaded on their device. This data can help publishers serve ads that are similar to their audience s interests and preferences. behavioral data or collect location and demographic data about their audience will be at a competitive advantage with advertisers that are looking for user acquisition from a specific audience. Optimization is a matter of making strategic decisions for the long term while still bringing consistent, quality results in the interim. Conclusion There is no one size fits all approach to monetization for mobile publishers. Decisions must be made about what monetization method is the best fit for their audience, which ad formats will perform best, and how to optimize traffic. Publishers have to focus on the huge challenge of finding a balance between giving users a great user experience and making as much money as possible. Each publisher will have to test to find what works best for their app, their traffic, and their wallet. Publishers who can learn from 11

12 Appia 2014 Appia is the leading mobile user acquisition network, delivering more than 75 million app installs globally. Ranked #22 on the Wall Street Journal s 2012 Top 50 Venture-Backed Companies, Appia provides non-incentivized performance mobile ad solutions for developers, publishers and advertisers. With offices in San Francisco and Durham, as well as global sales locations in the UK and Mexico, Appia has quickly become the largest, non-incentivized app install network. For more information, please visit