The Best Mobile App Monetization Tactics!
I’m asked by Game Developers on a daily basis, “What’s the best way to monetize my app?”
Instead of having the same conversation ten thousand times, I figured I’d write a blog post addressing some key monetization strategies and tactics that I’ve deployed over the years
By reading this blog you’ll learn the following app monetization tips:
- Free 2 play (f2p) over Paid apps
- Focus #1 on the player
- Tracking users & usage in app
- Hybrid Ad + In App Purchase (IAP) business model
- Ads > Integrate an Ad serving platform
- Best Ad Networks
- In App Purchases, best practices
Get ready to take notes, let’s jump right in!
1. Free 2 play (f2p) over Paid apps
Go F2P.
F2P apps attack the largest market on the app store. Over 90% of all installs are free! [1].
P2P, aka premium games that cost money upfront are still a viable solution for publishers and developers who have amassed a minimum of 10,000 active followers.
For the rest of us starting to build this momentum, I highly recommend choosing the F2P model.
2. Focus #1 on the player
Before we go ahead and continue down the monetization path it’s critical to note that your games should focus on the player! Do not build a game primarily with monetization in mind, it will fail. Your game needs to be engaging, lengthy and addicting. By focusing on improving player feedback, adding polish, and bringing out the addicting aspects of your game will drive long term compounding revenue!
The most overlooked metrics for games by smaller indie studios is user retention. Often times games are installed and quickly deleted afterwards because a level was far too difficult early on, or they found the game to be boring and were let down. Don’t let this happen to you!
3. Tracking users & usage in app
Action point: Install Google Analytics or Flurry Analytics.
These tracking tools will give you extremely valuable data points you can use to tweak your game. Setup goals for individual levels, and monitor where users abandon your app. Understanding the flow of your audience through your app will tell you exactly how to improve and optimize it!
For example, if by level 3 you have already lost over 50% of your traffic you will need to revisit your first few levels
Action points you can take are:
a) adjust the tutorial
b) make levels easier
c) make levels shorter
d) focus on hooking the user
In addition to this, you will also be able to see how much time users spend in your app, what countries they come from, and where they go in your app!
That’s Huge.
To monitor installs and chart ranks you can use App Annie or Appfigures.com.
The primary objective as a game developer once you’re app is launched is to start thinking in business terms. Focusing and understanding the players becomes the foundation for your game studios success.
To recap: The #1 focus is the player. The #2 focus is the player. Capiche?
4. Hybrid Ad + In App Purchase (IAP) business model
So now that you’re focused on players and have tracking implemented in your app, we’re ready to approach monetizing.
In my opinion whether your Self Publishing or a Publisher — the best approach to monetizing your apps is a hybrid business model of In App Purchases (IAP) and Ads.
Why?
Only a fraction of your audience will purchase something in your app. Typical conversion averages range from 1-5% [1] with more mid-core to core games around 10%.
Meaning, 95%-99% will passively play your game, and if you develop mid-core games around 90%. It’s a big chunk of your downloads, and surely should be monetized. Considering that you’re giving away your hard work free of charge, having a few ads in your game will not drastically effect it’s rating and reviews. The key here is few ads. Do not launch an all out ad attack on players, use your common sense.
I advise 1 banner in a key location, either on the level win screen or game play area. These locations have the highest CTR and will subsequently generate the highest CPMs. In addition to a mobile banner, every 5 or 10 levels place an interstitial ad. These monetize quite well, above $5cpm+ for top tier countries!
Don’t knock ads in your game, often times developers will tell me that they have made significantly more money off their ads vs. IAPs!
5. Ads > Integrate an Ad serving platform
First and foremost, I strongly advise using an ad serving platform. An ad serving platform allows you to easily change ad networks within your app. No need to update your app, or integrate several ad network specific SDKs!
There are a number of ad serving platforms out there, but Mopub.com is pioneering the industry. Recently acquired by Twitter, Mopub has exceptional tools that provide statistics and monetization solutions from a number of ad networks.
There’s an iOS & Android SDK
3rd party developers have created a Mopub Native AIR extension, Unity plugin for iOS and Android
By using an ad serving platform, you will be able to further monetize your app by testing different ad networks to see which pay the best rates. The way I’ve approached both monetizing websites and applications is by finding boutique ad networks for individual countries. By geotargeting highly paid ads in individual countries, you’re able to maximize your ad revenue!
6. Best Ad Networks
What ad networks pay the best?
For interstitials and banners, the highest paying ad network that fills the most impressions is AdMob.com, which is a Google owned company.
For those familiar with monetizing websites, this is the equivalent of using Google Adsense. Admob has a very large advertiser base, which services advertisers who use Google Adwords!
In addition to Admob, iAds seem to work well but fill a lower % of your ad inventory. You can integrate and analyze iAds using itunesconnect.
It’s worth testing iAds versus Admob to gauge revenue performance. Once you gain an understanding of the best performing network, setup mopub delivery settings to prioritize the highest paying.
I will write a follow up blog at a later time discussing how to properly setup A/B tests for your ads, and develop an even stronger waterfall approach to monetizing your app with multiple ad networks.
In addition to these mobile ad networks, it’s worth looking into the follow:
Chartboost - interstitials + cross promo capabilities
NativeX - customizable ad wrappers
LeadBolt
StartApp
If you’re interested in replacing your interstitials with video preroll which earns very high cpms, I recommend YuMe.com. The implementation of video in your app needs to be less frequent than interstitials, as they are really annoying. Usually ads run for 30 seconds and depending on the users internet connection this could run up to 45s due to buffering! Monetize with video in rare instances!
Now that we’ve covered the fundamentals of analytics, ad serving and ad networks > we can move onto In App Purchases!
7. In App Purchases, best practices
In app purchases can be extremely lucrative if integrated intelligently, with user intention and respect in mind. The first element in setting up your in app purchases is understanding how players interact with your game (reread Tracking Users).
Understanding how players perceive your game goes a long way.
The highest converting in app purchases that I have found have resulted in players getting something they really enjoy out of the game. Whether that’s completing a challenging level by getting extra moves, to equipping your character with extra skills and weapons.
As a level designer it’s essential to convince players that you’re game is addicting. Have 10 easy levels to start your game off, and really hook users. No IAPs will convert before a user is engaged with your game.
Once you have their full attention, increase the difficulty and present challenges. Design your game to have a rollercoaster of ups and downs in difficulty, instead of each level being linearly more difficult than the previous.
The most challenging parts of the game will be where your users are most likely to convert on IAPs, and knowing that ahead of time will allow you to plan and setup an effective monetization system.
I call this IAP tactic Loss Aversion.
Users don’t want to lose, especially once they have invested time into your game. Taking advantage of this is by far the highest converting In app purchase for major titles.
Let’s take a practical example of Loss aversion. Puzzle games. If a user is stuck on a particular level, and have tried time and time again to beat the same level… they are likely willing to pay to beat it!
On the lose screen, implement an IAP to help them beat a particular level. This should not be a simple SKIP button, but rather more turns or more hints to help them progress through the level.
It’s always best to aid the user, instead of jumping them to the next level. They become more satisfied and excited to continue playing.
Some additional IAPs that are common, but convert poorly (and aren’t worth integrating) are:
- Pay to remove ads
- Items with no attributes and are simply visual improvements
- Pay to play mini-games
Better alternative options for In app purchases are:
- Pay for new level packs, BUT these also need to be setup where users can earn them through in game currency… not simply locked off levels for paying users
- Pay for in game currency, redeemable for items in the game that will assist players
- Hints, tips, or walkthroughs
In app purchases should be a means to speed up game play and guide players. Understanding this is critical to your monetization strategy and will contribute significantly to your app’s revenue success.
Combining both Ads + In app purchases will provide a diversified revenue stream for your game. Optimize the game play and retention and you’re revenues will compound over time!
I’m very interested in hearing your thoughts, insights and success stories! Have you launched an app using this hybrid approach? What’s your ARPU?
Message me, I’m super active on twitter: @kylewaring or write me in the comments below!