How to monetizing Your App with High Revenue and Good User Experience
The global app market is embracing in-app advertising
A decade after we enter the mobile age, smartphones have become an indispensable part of modern life. Analytics firm App Annie has predicted that the global application market will eye on a staggering growth to be worth $6.3 trillion by 2021, a 380% increase compared with just a few years back in 2016. Today, apps are so much more than just a tool, but also an important source of income for app developers.
There are plenty of ways for developers to capitalize on their apps. According to a survey, in-app purchases (IAP) have driven 39% of total publisher revenue, and in-app advertising (IAA) has become the most profitable app monetization method, making up 55% of total revenue.
Smartphones are everywhere. You see people chatting with family and friends in the malls and on transit systems. You see people of all ages playing “Angry Birds”, “Cut the Rope” or some other entertaining app. People can cruise through websites with a tap and swipe on smartphones, all while away from their home computers. For years, advertisers capitalized on home-based (or office-based) computers to provide real-time and context-specific advertisements to web surfers (via their browsers). Money could be made for “pay-per-click” or similar ad models. This method still works, but the problem for advertisers is that people aren’t using their desktop PCs much anymore. They’re using their smartphones.
eMarketer’s survey shows, mobile ad spending will grow 20% to $70 billion and will account for 75% of total digital ad spending in the U.S. Inevitably, in-app advertising will be a must-have for app developers in years to come.
If you own a smartphone and have downloaded any apps, you may have come across one or more which use in-app branding and possibly in-app advertising. A lot of people are willing to put up with the occasional ad from an advertiser in trade for some cool free app or game. This is the first of the five methods I’d like to present for monetizing your own Mobile apps.
Monetizing with ad networks
App developers or publishers usually sell their ad inventory with their direct sales team, and they trade most of the inventory with Facebook and Google. Based on eMarketer’s report, the two digital giants accounted for nearly 63% of total US digital ad revenues in 2017.
Following the Facebook and Google duopoly, the next tier consists of mobile ad networks like iron source, Fyber, and AppLovin, which have their own positioning to differentiate themselves in the market, with some focusing on certain industries (games/e-commerce/tools), or having a competitive advantage in certain locations.
Mobile ad networks will help developers to make improvements on the most important KPIs, such as maximizing eCPMs, increasing fill rates, and getting the most revenue from every impression.
Balancing ad revenue and user experience with AI
Developers may cheer on the growing revenue, but the users who essentially generated such revenue might not. There has been a growing concern that mobile users are losing patience as they are exposed to more ad scenarios. Leo Yang, CEO of AdTiming foresees that the balance of UX and Ad Revenue will be the top issue for the industry in the years to come, “As a mobile ad network, we provide solutions to publishers, the balance between UX and revenue has become a growing need.” Leo added that “technological advancement and ad scenario design will be the key to achieving both high revenue and good user experience at the same time.”
Firstly, the process to sell advertisements is highly data-intensive. With machine learning and artificial intelligence technology, mobile ad networks could yield deeper and more prescient insights about their ad performance and customer behavior. Programmatic ads are completely data-driven. Ad networks can feed and train their algorithm model with every successful ad impression data to predict the future. With the right AI model, ad networks can help both developers and advertisers to find the most precise audience segment, and make the most from their advertisements. On the other hand, ad scenario design is also crucial. There are several kinds of ad formats typically used by publishers: banners, interstitials, native, and incentive ads. In real practice, advertisers and publishers in the e-commerce industry prefer to use banners to display brand images and details of the product and/or their special offers.
Meanwhile, rewarded ads are well-received by both game developers and players. Many game developers have embedded ad places for rewarded video ads at the starting phase of their product design. To do that, they’ve leaned on ad platforms to design ad monetization scenarios with a creative and interesting ad format that matches their product characteristics.
Good incentive ads are well-designed to minimize the possible interruptions or intrude to the users and are able to provide benefits relevant to their current experience. For instance, users may watch a short clip of video ads after playing a game for 3-5 mins and get more lives in the game. They interact with the ads and get a positive experience with the ads, so they will generally remain engaged with the original app during the ads and will take ads as a tool to have a more positive experience. A report by AdColony found 90% of publishers confirmed that rewarded ads have a positive impact on user experience.
Designing product-specific rewarded ad positions and supporting the process with solid technology will be the key to high ad monetization revenue and user satisfaction. Leo suggests app developers let the professionals do their work, entrust ad networks to monetize their advert resources, and focus on their product design.
