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

1. Trends in ad-based monetization
strategies for mobile games
Kaya Taner, Casual Connect
Amsterdam, February 2014
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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
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3. The mobile monetization
landscape
AppLift.com Trends in ad-based monetization strategies for mobile games
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4. The app value chain
Development
User
Acquisition
AppLift.com Trends in ad-based monetization strategies for mobile games
Monetization
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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
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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
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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
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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
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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
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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
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11. The mobile ad format landscape
eCPM (USD)
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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
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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
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13. Innovative ad-based monetization
through native advertising
AppLift.com Trends in ad-based monetization strategies for mobile games
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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
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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
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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
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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
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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
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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
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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
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21. Additional customization examples
Akinator
AppLift.com Trends in ad-based monetization strategies for mobile games
Skype
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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
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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
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24. Talk to us!
Kaya Taner
CEO & Co-Founder
kt@applift.com
AppLift.com
Berlin | Seoul | San Francisco
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25. Backup
AppLift.com Trends in ad-based monetization strategies for mobile games
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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
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