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Making money with free Android apps
by Betable Blog on 08/15/12 01:17:00 pm   Expert Blogs   Featured Blogs

The following blog post, unless otherwise noted, was written by a member of Gamasutra’s community.
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.

 

Making money on Android can be hard. Many developers devote countless hours to building, testing, and marketing their apps only to fall short of that income-independent holy grail. We went through over 50 Android game & app postmortems and developer income reports to put together a list of common best practices and tactics that worked. 





In-app purchases versus Advertising
We are big proponents of freemium game design on our blog, so imagine our surprise when we found out how the majority of independent Android game developers make their living: ads! 

As it turns out, implementing a fully baked freemium game design is rather difficult. You can’t simply tack on freemium monetization after the fact: you need to build the game for freemium monetization from the ground up, complete with appropriate gating and enticing in-app purchases. When faced with this daunting design challenge, most developers opt for in-game advertising instead. Even when they did implement in-app purchases, it typically accounted for less than 5% of their revenue.

But Betable, you say, won’t users hate having ads in their game? Yes, they will. However, what’s surprising is how few of them are willing to pay to get rid of them: we found that less than 1% of revenue typically comes from Paid, ad-free versions of Free apps. This may also be a function of the frequency of advertising in apps on the Android platform, but it’s still a very low number. This tells us that while users dislike ads, they dislike paying for apps more.


Use multiple ad providers
One of the key tips we found for maximizing ad revenue is to use a mix of small and large ad providers. Small ad providers have low fill rates, but pay you well for the ads that you show. Large ad providers can always fill your inventory, but typically have a significantly lower eCPM. A common strategy is to work with one or two small ad providers to fill as many spots as possible, and then let the large provider fill the remaining inventory. This is also very important because revenue from each provider can fluctuate wildly month-over-month, so diversifying your ad providers gives you some insulation against those changes.

For fun, we wanted to post the average eCPM and inventory fill rate from each popular Android ad provider below. These numbers should not be taken as gospel, but hopefully help:

  • AdMob - $1.00 eCPM, almost unlimited inventory
  • InMobi - $1.00 eCPM, large inventory (especially international)
  • Millennial Media - $1.25 eCPM, large inventory (mostly US)
  • Madvertise - $6.00 eCPM, small inventory
  • Leadbolt - $3.5 eCPM, moderate inventory
  • revmob - $6.50 eCPM, small inventory, interstitial ads only
  • Mobfox - $6.00 eCPM, very small inventory



Utilize App Store Optimization
While we’ve written a whole post about this in the past, this tip belongs here: The key to discovery in the Android Market is Search. If you aren’t optimizing your app store icon, listing and description, you’re leaving users and revenue on the table. In a nutshell, App Store Optimization (“ASO”) is just like SEO: you need to identify the keywords that you want associated with your app and then optimize your listing and description for those keywords. Since that post, some key tools have become available to help you with app store optimization, including AppAnnie and MobileDevHQ.

Optimize your ad placement
Optimizing your ad placement is tricky business. You’ve got to eat, so you need to make money, but you’d also like do so in a way that doesn’t totally ruin the user experience. Taking equal inspiration from Zack Hiwiller and Johannes Borchardt, we’ll show you some potential optimizations and then you can decide which approach is right for you.

Option 1: Optimize for Visibility
With this method, you place your ad where users are most likely to see it, but not in the line-of-fire of gameplay. The goal here is to maximize the likelihood that a user sees the ad, is interested in it, and then clicks on the ad. This generates the highest quality clicks.


Option 2: Optimize for Clicks
With this method, you place the advertisement where users are most likely to click, whether it's by accident or because the ads are in an area of the screen that is a focal point during gameplay. The goal here is to maximize the likelihood that a user clicks on an ad, period. This generates the most clicks but can lead to disgruntled users. Also, if done too intrusively, it can upset your advertisers.


Option 3: Optimize for Gameplay
With this method, you place the ads in non-gameplay screens such as the menu, the inventory screen, and others. The goal here is to leave gameplay intact to preserve the user experience. This method generates the least clicks, but is least likely to prompt complaints from your users.

When optimizing for gameplay, many developers opt for interstitial ads. These ads have the benefit of fitting well in between gameplay chunks, such as between turns in an asynchronous game or between levels in a puzzle game. These ads often pay well compared to banner ads and don’t intrude on your game’s immersion like banner ads.

Build multiple apps in different categories
This might be the most obvious tip here, but a developer with a diversified portfolio of multiple apps always outperforms the developer with one project. Other than the truism that you shouldn’t place all of your revenue eggs in one basket, there are a number of advantages to this approach. By building different games and apps for different audiences, you’re increasing your overall target audience. You’re also attacking different niches, which might be less competitive than your current target niche of app or game type. It’s very common for one game or app in your stable to generate the lion’s share of your revenue and impressions. You won’t know which app this is until you create it, but having a workhorse app can power your entire ecosystem with cross promotion.

Cross promote your other apps with House Ads
Admob and other services on Android give you the ability to cross-promote your apps using your own ad space. This is huge for growing your ecosystem, as you get to double-dip in revenue and impressions from your users. Furthermore, you can maximize the engagement of your existing audience by matching them with the right app. And perhaps most importantly, this gives you a ton of free marketing firepower for promoting your next project and extending your ecosystem further.


Conclusion: Build an ecosystem
To tie together the tips mentioned above, developers need to think of their entire user base as one ecosystem. Like Reddit or ICanHazCheezburger, mobile apps that cover diverse interests can build on each other around a central brand. Even though they cast wide nets, these sites are good examples because they can still narrow down their target audience to only a few key demographics. To figure this out for yourself, think about why your users use your apps or how they get value out of them. Do your users enjoy your dead-simple budgeting app? They might appreciate a dead-simple to-do list. Think about what type of person is using your most popular apps to identify opportunities for new apps. Maybe that user who loves your dead-simple budgeting app would play a stat-driven baseball sim? You won’t know until you try, but by thinking of your user base across all apps as a single ecosystem, you can identify which audience you have struck a chord with and continue to grow. And as your ecosystem grows, the downloads, impressions and revenue will follow.


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Comments


Chris Moeller
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Awesome article! I should have seen this 4 months ago.

I've had a game on the market for over a year, but still having trouble finding good resources + advice from other developers, on what has worked and not worked for them.

I would like to know what niches, or the names of the apps that you have seen that kind of ecpm. IN my experience, Admob is lucky to reach $0.50 eCPM, as well as mobfox, whereas mMedia does provide roughly $1 eCPM, depending on the month/ time in the quarter.

Dreading next month. Last year eCPMs fell to the $0.11-$0.17 range for admob, assumably since advertisers had spent most of their ad revenue for Q4, biggest spending season of the year.


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