Four Common Ways App Publishers Are Leaving Money on the Table
The thoughts and opinions expressed are those of the writer and not Gamasutra or its parent company.
As any successful freemium game developer can tell you, monetization is an ever-evolving task. There’s always new promotions to run, additional in-game items to merchandise, and innovative ways to optimize your ad strategy.
But every freemium game developer will also tell you that they live in constant fear of leaving money on the table. They know that there’s always more revenue to be earned, if only they could further optimize their efforts and identify the right mix of monetization strategies. The challenge lies in knowing which strategies produce the best results and which pitfalls might be causing them to leave potential revenue untapped.
We’ve spoken with over 10,000 freemium app developers and compiled a list of four of the most common practices that cause app publishers to fail to fully realize their monetization potential.
1. Relying too heavily on video ads
Rewarded video ads have become very popular of late, and for good reason: they’re a quick, easy and low-friction way for users to earn in-game rewards. But many game developers have come to rely too heavily on video ads – to the detriment of their revenue. For users with a thirst to complete more (and higher paying) ad offers, videos just don’t cut it. These players would benefit from exposure to other ad formats, such as an offerwall, which provides a robust list of offers that allow users to earn more value for their actions. Offerwalls work particularly well for titles with higher value economies, since the goods exchanged for watching a few video ads generally won’t satisfy the appetites of more dedicated players. That’s why offerwalls are of course a natural fit for mid-core freemium titles, but we’ve seen them work well for a wide variety of apps – even non-gaming ones such as messenger apps, dating apps, and news apps. Virtually anything that offers high value premium content is a great match for offerwall.
2. Treating all users the same
Different players interact with games in fundamentally different ways – which is why they should also be treated differently when it comes to monetization. For example, don’t expect that an IAP promotion will work for players who are never going to make a purchase. And it doesn’t make sense to show ads to players who are already your top spenders, since you want to keep them focused on IAP. You should also treat players differently based on how long they’ve been playing your game – by serving ads at different intervals, for instance, or implementing a dynamic exchange rate for rewarded ads so that highly engaged players are offered more incentive to progress through the game. Regional differences should affect monetization strategies as well, since purchase behaviors and advertising preferences often vary from country to country.
3. Not looking for ways to tie monetization to engagement
The goal of currency and IAP promotions isn’t always solely to make money – or at least it shouldn’t be. Sometimes the goal should be to increase retention, reduce churn or deepen engagement. After all, when a user has more currency to use in your game, they can access more content, unlock achievements, play for longer and are more likely to have a better overall experience. Sometimes it’s worth offering discounts (what retailers would call “loss leaders”) in order to drive more engagement. If users have failed to engage for a certain period of time, why not target them with a notification to earn rewards through an offerwall? Or experiment with holding a currency sale in which users can, for a limited time, earn bonus currency for every purchase they make or ad they complete. For your more dedicated players, the pace at which they can earn rewards through video ads is often too slow and incremental, leaving them feeling frustrated and inadvertently holding them back. By giving them an offerwall, however, you’ll make it possible for them to earn rewards more quickly and therefore progress more easily through the game.
4. Failing to evolve your monetization strategy
As a game matures, its monetization strategy must evolve with it. If it’s fortunate enough to sustain success into a second or third year, what worked in year one won’t necessarily work in subsequent years. For example, a developer may find that their initial monetization channels no longer serve the needs of every user. Perhaps they initially launched only with rewarded video, but find that it doesn’t offer high enough eCPMs to maximize the value of their most engaged users. In this case, introducing an offerwall may not only help boost ARPDAU, but also provide highly-engaged users with the opportunity to unlock additional content and drive deeper engagement with the game. Similarly, a game that relied solely on IAP for monetization in year one, might find that its population of non-paying users has grown too large to ignore the benefits of ad monetization. There’s also the fact that in-game economies often change over time and that a game’s user base constantly evolves. Older players will be wiser in terms of how currency affects gameplay, and new players will come to the game with certain expectations. All of these factors affect the delicate balance between action and reward and should be reflected in the game’s monetization methods and exchange rates. A developer’s job is to constantly test, measure and re-evaluate their monetization strategies in accord with all these changes.
Consumer preferences and mobile behaviors are constantly changing, so getting monetization right requires continually evolving your strategies. To truly get the most out of your app’s revenue potential, it’s important to put yourself in your users’ shoes and try to understand how they want the app experience to unfold. By executing monetization strategies that are tailored to user expectations and designed to evolve with your audience, you can learn to home in on what matters most and reduce the chance that you are leaving money on the table.