Show Me the Money: Four Tips to Completely Nail App Monetization

mobile adsEverywhere we turn there’s a new article on how “mobile is eating the world.” While some are just now jumping on the mobile bandwagon, others have focused on mobile for years. Experienced developers know that the key to making a business out of a mobile app is to plan for monetization from the beginning, consider multiple monetization strategies and constantly iterate.

As people spend more and more time on their smartphones, one clear path to monetization is the increased revenue opportunity that mobile ads present. It seems pretty simple: leverage compelling ads to make more money. But as the landscape evolves and more apps hit the market, it’s important to stay focused on user experience — even with the ads. Top developers do an excellent job of focusing on both user experience and monetization. We took a look at top developers and found four core themes they all employ to optimize ads for higher monetization:

1. Bigger and better creative rules:

Interstitials/full screen and video ads are more immersive and gain undivided user attention. Advertisers gain more user attention, generate higher click-through and receive stronger conversions and that means they are willing to pay higher eCPMs. The top developers have turned to more full screen ads to show products and offers in a creatively compelling way because they know interstitials generate higher conversion and yield them higher eCPMs. Conversions can often be 10x higher for full screen creatives and this can lead to eCPM payouts that are 9-11x higher than traditional banner ads.

2. Placement matters:

Banner ads or poorly placed ads at inopportune times can interrupt users’ interactions with the app and will cause DAUs (daily active users) to drop significantly. The best developers employ strong practices around where to place the ads.

Interstitial and video ads give your users the option to close or ignore them and get back to your app. By placing ads at natural breaks in the app there is minimal disruption to the user experience. For example many popular apps serve ads opening or upon exiting the app, when going back to the menu screen, or in between levels or screens in games.

3. Keep it relevant:

Users don’t want to be interrupted with irrelevant content. In 2013, 74% of users reported that they were frustrated with ads, offers, and promotions that had nothing to do with their interests. It seems obvious – users have a better experience when they are receiving ads for products and offers they want. Ultimately relevant content all ties back to the user’s intent and interest while in the app.

Mobile gaming companies are leading the pack when it comes to relevant ads. The top game developers are experts at running ads that are specific to their game’s genre. They partner with ad platforms that develop algorithms to understand the best ads to serve to each user. It’s very simple – an ad for a word game in a social casino game might make less because the content isn’t relevant to the users and the users don’t engage with the ad. But, a full screen ad for a casual game in a word game can 43x more because users who play casual games also play word games so they find it relevant, click, and download.

4. Track the entire funnel:

Partner with a platform that allows for advanced funnel tracking. Sound complicated? It’s not. Just think of a funnel. At the top of the funnel, you can track downloads and usage. Then in the middle, you should understand retention and engagement. And finally at the end of the funnel, you should tie users back to revenue. All of these phases can be done at the user level.

What does this mean for monetization? Your reporting allows you to optimize your revenue for each user. With funnel tracking you can get a better idea of user behavior, ideas on how to refine your app, and data to help you optimize for monetization.

One developer we talked to explained how much intelligent ads have helped their overall revenue: “Relevant and engaging ads have helped us increase our ARPDAU (average revenue per daily active user) by 20%. That’s a huge increase to our overall revenue that we weren’t getting before,” says Nick Talarico, CEO and Founder of Super Lucky Casino, one of the larger mobile social casino companies.

As intelligent monetization strategies will continue to evolve on mobile, it’s important to consider how to monetize from the onset and grow your monetization solutions. Integrating mobile ads provides a strong way to grow your app’s revenue when it’s done correctly. What should you do now? There are many strong solutions out there. Make sure you take the time to research and partner with platforms that have a high inventory of full screen ad creatives and a strong advertiser client list. Also consider platforms that take a data driven approach to ensure relevant ads that will perform and allow you to track performance through the entire funnel.

Mark Rosner, Chief Publishing Officer of AppLovin is the author of this post.