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App Revenue: How Are You Sabotaging It?

(This article was originally published on Udonis’ blog.)

Choosing to monetize your app through ads is common, but it is not necessarily easy. To make your app revenue steady and valuable, you need a significant user base as well as quality ads that will not deter your users. It can be challenging at first since not many people like ads, to say the least.

To achieve the best results, you need to carefully craft your monetization strategy. If you want to attain the highest app revenue, try to avoid the mistakes listed in this article.

These are the mistakes that could sabotage your ad revenue:

You’re Not Measuring Ad Monetization Properly

To optimize your monetization strategies, you first need to know what’s working and what’s not. That is why not measuring your ad monetization will cost you more in the long run.

Choosing a good measurement tool will help you identify what you’ve been doing wrong with your ad monetization. If you choose the right tool, it will provide you with accurate and unbiased data about what are your users doing in the app.

If you’re tracking all the important events in your app with the mobile app analytics platform, you’ll have a better understanding of your users.

Choosing the Wrong Ad Network

Ad networks are deciding which ads are going to be served to your users. However, their goal is also to make money while doing that, and their interests might not always be the same as yours.

Choosing quality over quantity means that the ads will fit organically in the app and align with the interests of your users.

Another mistake you might be making here is relying on one ad network only. If this is the case, a lot of ad space in your app will remain unfulfilled. This is because a single ad network is estimated to provide only a 25% fill rate. (DeltaDNA)

If this is the case, you’re missing out on potential earnings. Therefore, for maximum fill rates, you should rely on multiple ad networks.

Not Using Cross-Promotion

Cross-promotion can be considered in two different ways. It is either promoting your app through other apps you might have (some game publishers publish an app every two weeks or so, so cross-promotion is the most logical step) or signing a partnership deal with another company whose app you’ll promote and in return, they will promote your app.

Using Old SDK’s

The mobile app market is a highly dynamic environment and things are constantly changing. That includes SDKs (Software Development Kits) as well. Change your SDKs often and update them as the new version is released.

Your Ads All Look the Same

If you’re struggling to attract players to your game, this may be because they are suffering from ad fatigue. If your ads are all the same, you could easily bore your users and increase churn rates. Ask yourself, would you like to see the same ad again and again?

Some users like one type of ads, while others will bring you more ad revenue from other types of ads. Try adapting to every type of user, showing them different types of ads.

These don’t ever have to be wildly different ads. In order to avoid ad fatigue, you can play with small ad elements — ad variations.

You can try and create ads with the same concepts, but different:

  • colors
  • captions
  • soundtracks
  • CTAs
  • dimensions
  • video length, etc.

Change one at a time and figure out what works for you. The best thing about them? They require minimal effort and resources and yet do the job.

Ketchapp, one of the biggest hyper-casual game publishers, has multiple creatives for every game. To find out what kind of ads are your competitors using, you can browse the Facebook Ads Library or use some of the online tools specialized for competition research.

Ads Are Too Frequent

Showing as many ads as possible within your app may seem like a profitable monetization model. However, if you go overboard and show your ads too aggressively, this becomes a safe way to drive the user away. This is especially true in the long run.

When the app is overcrowded with pop-ups it will surely affect retention and session lengths. For this reason, apps need to set frequency capping that limits the number of ads shown within a certain time period.

According to ironSource, an optimal number of ads per user is 3–4 per session or 10 within a day.

Furthermore, to provide the best user experience possible, choose the right timing for your interstitial ads. Follow the app’s flow and show ads only in places where the app has natural transitions. For instance, game apps often show ads before starting the game, between levels, or when you win/lose the game.

Watch out for this mistake, since it can also bring you bad reviews in the app store and directly affect both your ASO and installs.

Ads Are Loading Too Long

The slow loading of the ad will directly affect the revenue of your app. How? Only a fully loaded ad counts as an impression.

But it will also affect the user experience of your app. Nobody likes to be interrupted or wait while something is loading. You could be losing your users due to speed issues within your app.

It is very important to track problems like this, so integrating mobile app analytics and attribution is a must. Only with the right tool, you’ll have an idea of what your users are doing within the app. What are they swiping, tapping and buying, and are there some obstacles on their journey within the app?

Not Introducing Rewarded Videos Early Enough

Rewarded video is a specific type of video ad that is shown in exchange for a reward, such as unlocking a life to continue playing or for in-game currency. They are also called incentivized ads. Since the user is rewarded for watching the ad, he is less likely to hate it.

Some additional advantages of the rewarded videos are:

  • They are easy to integrate into the app
  • This format benefits all parties — the user, the marketer, and the developer
  • The advertiser has direct profit because the user has to watch the whole ad
  • High eCPM and CTR rates

According to a study from Smaato, the costs for rewarded video ads are up to 86% lower than for all other video ad types. This is a huge difference since they traditionally have similar conversion rates.

A vast majority of users, around 80%, traditionally churn during the first week. This is why introducing rewarded video before it happens can have a positive effect on the revenue of your app.

Not Showing Ads to Paying Users

The recent statistic shows us that in-app ads have taken over in-app purchases in terms of profit. So think twice before restricting ads to non-paying users only.

One wise thing you can do is to split your users into groups based on their previous in-app behavior. More precisely, based on their spending habits.

For example, you can split them into regular spenders, occasional spenders, and one-time spenders.

Regular spenders are the only group you should spare from seeing constant ads.

When it comes to occasional spenders, you can decrease ad frequency. Another thing you can do here is only to show opt-in ads like rewarded video ads or offerwalls. After all, interstitial ads take over the users’ whole screen, and they can scare users away.

Finally, if you have one-time spenders who made their one purchase a long time ago, feel free to serve them ads.

A carefully planned ad strategy won’t scare away your users. Of course, if one benefit of the paid version of your app is not including the ads, then you shouldn’t show them ads, but otherwise, why not?

Not Combining Different Monetization Models

Hybrid monetization is a growing trend in 2021, especially for gaming apps. This monetization model allows developers to tap into multiple revenue streams.

Instead of choosing between in-app ads, in-app purchases, and subscriptions, you can combine them.

To get the most out of these models, implement at least two of them. The thing is, relying on a single revenue stream often means missing out on others.

In most cases, multiple monetization models are incorporated in a way that one is primary, while others complement it.

The main purpose of this model is to expand the user base you can monetize. Leaving it up for a small group of users to generate all the revenue often comes off as the most expensive option. Most users fall into the non-paying category, while others are willing to pay for a premium gameplay experience.

For example, if your monetization model includes in-app purchases, you don’t have to give up on ads. One ad format is particularly common in IAP-monetized games: rewarded video ads. This way, you can utilize your non-paying user base.

The only thing you need to look out for here is not going overboard with offers. Implemented strategically, this model can do wonders for game revenues.

You’re Only Going Only after Paying Users

According to data, in most top-grossing games, the whales represent the smallest percentage of users but are responsible for up to 50% or more in revenue sales of an app.

Mobile games whales.

Whales are special, rare, but very valuable users that every mobile app or game is going after. Whales are the users that are spending hundreds, thousands, or even millions in a mobile game. And the mobile games whales will often make a difference from break-even to being profitable.

And the latest data shows us that more and more users are becoming open to in-app purchases, and consumer spend grew rapidly. Game publishers don’t need to rely on mobile game whales anymore to bring their profits up. An occasional mobile games whale will be a great catch, but with plenty of other fish in the sea that is willing to spend the money, game publishers changed the rules of the game.

So you don’t need to target only paying users since there are plenty of other users your app can generate from.

Stay On Top of the Changes

Changes in the world of mobile are constant and they happen fast. And if you recognized some of the mistakes you have been doing, that are great news. The first step of optimizing is knowing what are mistakes you need to stop making.

With the help of the right partner, everything is easier. Mobile games are a business of a scale, and that’s one thing we’re great at. If you can acquire 100 or 1000000 users, while keeping the CPI the same, congrats, you’ve hit the jackpot. 🎉🎉🎉

About Udonis

Since 2018 until today, Udonis Inc. has acquired over 150 million users for mobile apps & games. We’re recognized as a leading mobile marketing agency by 5 major marketing review firms. We helped over 20 mobile apps & games reach the top charts. Want to know how we make it look so effortless? Meet us to find out!

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Udonis Inc. is an award-winning marketing agency specialized in mobile apps & games.

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