3 things I’ve learned about monetization since my publishing days
Before I joined AppLovin as an analyst, I worked on the publishing side of the mobile industry, building content apps and reskinning games. These days, I work directly with other publishers and game developers to effectively monetize their users and maximize their revenue. From time to time I find myself reflecting on things I wish I had done in my publishing days. Here are a few strategies that I now know should be in every publisher’s toolbox.
Focus on revenue not CPM. Now that I have experience on both sides of the business, I can’t stress enough the importance of focusing on revenue vs. CPM. I frequently come across publishers who focus on CPM, without regard to their overall revenue picture. When I hear this, I always suggest that they look at overall revenue and use a failover system to maximize revenue by working with multiple partners if absolutely necessary. Often an ad partner can provide global fill, but when maximizing towards a CPM, an ad partner can’t run in all countries. Naturally certain countries are not as valuable for advertisers. As a publisher you then end up in a scenario where you need to run multiple demand sources to fill the holes. This can work, but it creates added complexity. Why do this when you should be focusing on improving your core product and streamlining non-essential business systems?
Always consider user experience when implementing ads. Looking back and knowing what I know now, I can’t believe I ever used banner ads. Not only was the return pretty lousy, but they annoyed my users and distracted from the gameplay I worked so hard to create. Back then I also had an aversion to video (I thought I would somehow alienate users if I showed video ads), but now I know from studying the data at work and my knowledge of the industry overall that video ads are actually incredibly effective on mobile, partly because users in fact like them. For level-oriented and endless-style games, well-placed video ads can offer a non-disruptive experience. For mid-core games, rewarded video is incredibly effective because not only does it allow you to monetize the 97%+ of users who are non-paying, it also gives your users a chance to test the premium currency; it helps turn non-paying users into paying users.
Keep in mind that reviews of your app are a great source of information on whether or not the ad format you’re using works in terms of UX. For example, if users say that they find the frequency of ads in your app annoying, adjust accordingly.
Over at Venture Beat you can find a useful guide to different ad formats (written by AppLovin’s CEO Adam Foroughi), and this infographic on our blog breaks down why you should use certain ads and where in a game they should be placed.
Have a profitable ARPDAU in mind, and then make adjustments to get there. Back in my early publishing days, I’d give the network full control over the value of my inventory. But from where I sit at AppLovin, I’d say that far better approach is to be proactive, involved, and strategic. My advice now is to release your title with an ARPDAU in mind and make adjustments in your monetization strategy to get there. For example, if you’re a mid-core publisher, and you’re aiming for 0.40 ARPDAU but you’re currently under 0.30, and you’re not running rewarded video, add it in and you’ll likely see your ARPDAU increase by 0.05-0.10.
These are all very basic strategies, but again, it’s surprising how many publishers don’t deploy them. So think of this as a basic checklist: Focus on revenue over CPM; don’t forget the importance of user experience when it comes to ad implementation; and establish a target ARPDAU and tinker until you reach it.