Trends in ad-based monetization
strategies for mobile games

Kaya Taner, Casual Connect
Amsterdam, February 2014
1
Who is talking?
Kaya Taner
•  CEO & Co-Founder, AppLift
•  80 people across 3 offices in
Berlin, San Francisco and Seoul
• ...
The mobile monetization
landscape

AppLift.com Trends in ad-based monetization strategies for mobile games

3
The app value chain

Development

User
Acquisition

AppLift.com Trends in ad-based monetization strategies for mobile game...
Main mobile monetization models
Advertising (ad offers)
•  Monetization of high volumes of non-monetizing users
•  Need to ...
Main mobile monetization models
Advertising (ad offers)

Free apps with in-app purchases

•  Monetization of high volumes o...
Share of revenue by monetization models (US)
Advertising-based monetization has a lot of potential
Mobile revenue breakdow...
Share of users completing IAP
< 3%

IAP monetization is hard
•  97% of users do not monetize
through IAP at all
•  Free-to...
Ad-based monetization – overview of the main
formats

Format type

Banner ads

Offer walls

•  Rewarded or not

•  Non-rewa...
Understanding eCPM
eCPM is a function of the eCPC, the frequency of impressions as well
as the click-through and conversio...
The mobile ad format landscape
eCPM (USD)

10

Video Ads
Offer Walls

5
Static
Interstitials

1
Classic
Banners
(web
legacy...
The old and new worlds of mobile advertising
Innovative
Traditional

Paradigm

Retention/monetization
TRADEOFF

Retention ...
Innovative ad-based monetization
through native advertising

AppLift.com Trends in ad-based monetization strategies for mo...
Towards native advertising
There are two main points to focus on in order to achieve a successful native ad-based
monetiza...
Native ads: integration and engagement
Ad placement and trigger
•  Ad placement
–  Fully align into the UX/UI
–  Align wit...
Optimizing ad placement and trigger
EXAMPLE:
“More Games”
button

Users trigger the ad
themselves

AppLift.com Trends in a...
Maximizing the level of user engagement
Level of ad
integration
in the app
Native ads
Video Ads
Offer Walls
Static
Intersti...
Example 1 – game, natural trigger, extended
customization
Tailor the use of ads and promotions to your product, gameplay a...
Example 1 – game, natural trigger, extended
customization
Average
CTRs

19%

Average
CR

3.5%

Average
eCPMs

$10

AppLift...
Example 2 – non-game, user-triggered, extensive
customization

Average
CTRs

13%

AppLift.com Trends in ad-based monetizat...
Additional customization examples
Akinator

AppLift.com Trends in ad-based monetization strategies for mobile games

Skype...
Additional highly engaging native ad unit
examples
•  Scratch screens
•  Slot machines
•  Gifts to open
•  Shooting target...
Ingredients for native ads
Best way to monetize your audience through native ads
Look
Streamline the design of the ad to y...
Talk to us!

Kaya Taner

CEO & Co-Founder
kt@applift.com

AppLift.com

Berlin | Seoul | San Francisco
24
Backup

AppLift.com Trends in ad-based monetization strategies for mobile games

25
Example 2 – game, natural trigger, extended
customization
Average
CTRs

3.55%

Average
CR

2.05%

Average
eCPMs

$1

AppLi...
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Ad-Based Strategies for App Monetization: Native Ad Units

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This presentations takes a look at the best way to monetize in-app traffic through native ad formats.

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  • In thispresentation – I wouldliketosharesomeoftheexperiencesandinsightswehavegainedalongthewaywhenitcomestomonetizationofappsGeneral conceptofappmonetizationOld approachandnewformsof native advertizingSometipsforadvertizing
  • Herewesee averysimplifiedappvaluechain:DevelopmentUAMonetizationIn thispresentation in fact I am goingtofocus on theMonetizationandwouldliketosharesomeoftheexperiencesandinsightswehavegainedalongthewaywhenitcomestomonetizing mobile trafficThe generalwaysandconceptofmonetizingOld approachandnewformsof native advertizingSometipsforadvertizing
  • Integrate monetization in the user journey (acquisition, open app, monetization)
  • Howisitif normal.Fatfingerproblem (30% clicksare not intended)Interstitial not geared towards appearanceStudies suggest that over 30% of mobile banner clicks result from accidental clicks (fat-finger problem)Click-trough rates are 225 percent lower with traditional banners than with native forms of mobile advertising
  • 3 elementstoaddressthegamersappropriately
  • Ad-Based Strategies for App Monetization: Native Ad Units

    1. 1. Trends in ad-based monetization strategies for mobile games Kaya Taner, Casual Connect Amsterdam, February 2014 1
    2. 2. Who is talking? Kaya Taner •  CEO & Co-Founder, AppLift •  80 people across 3 offices in Berlin, San Francisco and Seoul •  Acquiring millions of users for 200 game publishers •  Monetizing the mobile traffic of 2,000+ partners AppLift.com Trends in ad-based monetization strategies for mobile games 2
    3. 3. The mobile monetization landscape AppLift.com Trends in ad-based monetization strategies for mobile games 3
    4. 4. The app value chain Development User Acquisition AppLift.com Trends in ad-based monetization strategies for mobile games Monetization 4
    5. 5. Main mobile monetization models Advertising (ad offers) •  Monetization of high volumes of non-monetizing users •  Need to be implemented carefully (risk of UX disruption/user dropout) Free apps with in-app purchases •  In 2013, 90% of apps are free, and in 2017, 94.5% will be free (Gartner) •  Soon, IAP will make up 70% of all app revenue (Flurry). This figure is higher in Asia. •  By 2017, 48% of app store revenue will come from IAP worldwide, up from 11% in 2012 (Gartner) Paid apps with in-app purchases and/or advertising •  In most cases, not recommendable Paid apps •  Hard to promote, very few app categories are suited for a paid model (much harder for games) AppLift.com Trends in ad-based monetization strategies for mobile games 5
    6. 6. Main mobile monetization models Advertising (ad offers) Free apps with in-app purchases •  Monetization of high volumes of nonmonetizing users •  In 2013, 90% of apps are free, and in 2017, 94.5% will be free (Gartner) •  Need to be implemented carefully (risk of UX disruption/user dropout) •  Soon, IAP will make up 70% of all app revenue (Flurry). This figure is higher in Asia. •  By 2017, 48% of app store revenue will come from IAP worldwide, up from 11% in 2012 (Gartner) Paid apps •  Hard to promote, very few app categories are suited for a paid model (much harder for games) AppLift.com Trends in ad-based monetization strategies for mobile games Paid apps with in-app purchases and/or advertising •  In most cases, not recommendable 6
    7. 7. Share of revenue by monetization models (US) Advertising-based monetization has a lot of potential Mobile revenue breakdown App Store Revenue 77% IAP Revenue from Free Apps 55% Advertising Revenue 23% IAP Revenue from Paid Apps 18% Paid Revenue 4% Source: Flurry, Distimo AppLift.com Trends in ad-based monetization strategies for mobile games 7
    8. 8. Share of users completing IAP < 3% IAP monetization is hard •  97% of users do not monetize through IAP at all •  Free-to-play mechanics are hard to master and are extremely data-driven •  Advertising represents a huge opportunity to boost revenues by about 20% to 30% (AppLift Data) Paying Users Non-paying Users Source: Flurry AppLift.com Trends in ad-based monetization strategies for mobile games 8
    9. 9. Ad-based monetization – overview of the main formats Format type Banner ads Offer walls •  Rewarded or not •  Non-rewarded •  Rewarded ads •  Non-rewarded •  Rewarded ads •  User value •  Intrusive •  High user value •  Rather intrusive •  High user value •  Amount of impressions •  High amount of impressions •  Very low amount of impressions •  Lower amount of impressions •  Very low amount of impressions •  eCPM level •  Low eCPMs •  High eCPMs •  Medium eCPMs •  High eCPMs •  Pricing model •  CPC •  CPA •  CPC, CPI •  Main players •  Admob, iAd •  SponsorPay, Tapjoy, SuperssonicAds, •  Most networks, Chartboost •  CPV (cost per view), CPI AppLift.com Trends in ad-based monetization strategies for mobile games Interstitial ads Video ads •  AdColony, Vungle 9
    10. 10. Understanding eCPM eCPM is a function of the eCPC, the frequency of impressions as well as the click-through and conversion rates eCPM=f(eCPC, Impressions, CTR) •  CTR •  CR •  CPC AppLift.com Trends in ad-based monetization strategies for mobile games •  Frequency of impressions 10
    11. 11. The mobile ad format landscape eCPM (USD) 10 Video Ads Offer Walls 5 Static Interstitials 1 Classic Banners (web legacy) 0.5% AppLift.com Trends in ad-based monetization strategies for mobile games 5% 10% Average CTRs 11
    12. 12. The old and new worlds of mobile advertising Innovative Traditional Paradigm Retention/monetization TRADEOFF Retention AND monetization User Impact Intrusive Value-adding Ad Format Standard Native eCPM Low-Mid High AppLift.com Trends in ad-based monetization strategies for mobile games 12
    13. 13. Innovative ad-based monetization through native advertising AppLift.com Trends in ad-based monetization strategies for mobile games 13
    14. 14. Towards native advertising There are two main points to focus on in order to achieve a successful native ad-based monetization strategy: 1 Maximize the level of integration within the app by optimizing the ad trigger and placement as well as adapting the ad unit to the app’s UI and UX 2 Maximize the level of user engagement with the ad AppLift.com Trends in ad-based monetization strategies for mobile games 14
    15. 15. Native ads: integration and engagement Ad placement and trigger •  Ad placement –  Fully align into the UX/UI –  Align with the app’s look and feel •  Trigger Engagement •  Engagement –  User interacts with the ad unit –  The ad is perceived as content rather than advertising –  Example: mini games –  Natural Trigger –  User-triggered AppLift.com Trends in ad-based monetization strategies for mobile games 15
    16. 16. Optimizing ad placement and trigger EXAMPLE: “More Games” button Users trigger the ad themselves AppLift.com Trends in ad-based monetization strategies for mobile games 16
    17. 17. Maximizing the level of user engagement Level of ad integration in the app Native ads Video Ads Offer Walls Static Interstitials Classic Banners (web legacy) Level of in-app user engagement AppLift.com Trends in ad-based monetization strategies for mobile games 17
    18. 18. Example 1 – game, natural trigger, extended customization Tailor the use of ads and promotions to your product, gameplay and enrich the user experience Natural trigger The colors, designs, character of the game are seamlessly integrated into the ad AppLift.com Trends in ad-based monetization strategies for mobile games Interactive integration 18
    19. 19. Example 1 – game, natural trigger, extended customization Average CTRs 19% Average CR 3.5% Average eCPMs $10 AppLift.com Trends in ad-based monetization strategies for mobile games 19
    20. 20. Example 2 – non-game, user-triggered, extensive customization Average CTRs 13% AppLift.com Trends in ad-based monetization strategies for mobile games Average CRs 16% Average eCPMs $33 20
    21. 21. Additional customization examples Akinator AppLift.com Trends in ad-based monetization strategies for mobile games Skype 21
    22. 22. Additional highly engaging native ad unit examples •  Scratch screens •  Slot machines •  Gifts to open •  Shooting targets AppLift.com Trends in ad-based monetization strategies for mobile games User completes an action User feels the action as part of the app’s user experience User perceives the ad as the result of this action 22
    23. 23. Ingredients for native ads Best way to monetize your audience through native ads Look Streamline the design of the ad to your app to embed it naturally into the UI Non-intrusive placement Place the ad in a subtle and non-disruptive way for the user •  Natural breakpoint within the game •  Self-trigger Interactivity/Playfulness Engage the user through interaction with the ad AppLift.com Trends in ad-based monetization strategies for mobile games 23
    24. 24. Talk to us! Kaya Taner CEO & Co-Founder kt@applift.com AppLift.com Berlin | Seoul | San Francisco 24
    25. 25. Backup AppLift.com Trends in ad-based monetization strategies for mobile games 25
    26. 26. Example 2 – game, natural trigger, extended customization Average CTRs 3.55% Average CR 2.05% Average eCPMs $1 AppLift.com Trends in ad-based monetization strategies for mobile games 26
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