SPOTLIGHT InMobi's Arun Pattabhiraman, global marketing lead for performance advertising and app developers, on the best way to monetise an app
While the app developer ecosystem is a competitive marketplace, it is one where everyone has an equal chance to succeed. With thousands of apps claiming similar features, the building of a great app is just the beginning; differentiation and momentum are key to success.
Best practices for monetising an app are ever-evolving, with several different models to consider, such as premium/paid for apps, freemium models with in-app purchases (although this model may be under threat from recent regulator rulings), and ad supported models, or a combination of all three.
One of the most successful ways developers can monetise apps is through in-app advertising; Gartner forecasts worldwide mobile advertising revenue will reach $25.5 billion in 2016, up from $9.6 billion in 2012, creating new opportunities for app developers.
The Internet Advertising Bureau's Digital Adspend report found that the mobile share of total ad spend doubled in 2013, growing 127% to £429.2 million in the first half of 2013. There is no sign of this growth slowing down as continual advances in technology make the ecosystem easier for app developers to achieve scale and monetise effectively.
Following these guidelines will help in taking advantage of the massive mobile advertising opportunity available to you. Whether it is updating SDKs, retargeting in-line with new data or using the latest in dynamic ads, these elements will work together for app monetisation to be successful for developers.
Turn insight into action
Understanding user behaviour is vital in creating an effective monetisation strategy, while also ensuring that user experience and loyalty is not lost. Developers can use behavioural insights to optimise the app experience, while ad networks can use it to enhance the relevance of ads shown.
For this to be achievable, developers will need to choose the right tracking and analytics tools that can provide actionable insights to ensure they can monetise and engage users successfully. Valuable insights include user identification, user behaviour (app engagement, in-app purchase behaviour etc,) anonymous user data (demographic information,) and geographical data (latitude /longitude).
Data is only gold dust if you know how to make sense of it and act accordingly by trying and testing different scenarios. The more data that is sent to monetisation platforms the better the chances are of receiving higher return on current and future campaigns.
We have more power than ever before to gain insight into consumers' intent and behaviour online. As a result, developers are expected to double-up as savvy marketers and use this insight to generate conversions.
Increased data can support more strategic decisions, enabling better targeting and the best timing to show an ad. There is a common misconception that showing more ads will produce more results; exposure at the wrong time can leave users annoyed and frustrated.
Being sensitive to a user's mood when they are in a game can help support the decision of showing an ad selling virtual goods. An example is choosing to up-sell virtual goods when the user loses a particular level and offering options to win and move to the next level.
By fine tuning approaches to different aspects of a game and using available insight captured on users, developers can maximise the click through rate for each ad served in an application and get the most out of an inventory.
Segment inventory effectively
Categorising and segmenting ads correctly is more important than you think. There is always a choice between showing a house ad (which consists of an ad for a virtual product available within the app or for another app owned by the developer) or ads from an ad network or ad exchange. To put this into context, to your premium users, you could show promotional house ads to sell virtual goods instead of showing an ad-network ad. By effectively understanding your audience and the sections within your app where ads perform well, it will be easier to generate higher revenues.
Optimise your ad formats and think bigger
Choosing appropriate ad sizes based on a device while building an app is just as important as the overall user experience as each slot is likely to receive ads of different formats. If you are using the same sizes and formats for tablets as you are for smartphones, you are losing out on revenue opportunities that bigger devices have to offer.
Interstitials, ads that are displayed across the entire screen between various actions within an app, should not be treated as banner ads. In an interstitial ad, it is the developer's responsibility to ensure it loads appropriately, so you must wait for it to load and only show it when it's loaded completely. Not implementing this process correctly can lead to ads not being displayed.
The key is to ensure you pick the ad format that is customized for your audience and is true to your app's core content. Using the right ad frames or custom ad animations that mimic the app's content are found to drive higher click through and revenues.
Respect user privacy
Developers should ensure they are aware of the privacy policies of the ad networks with whom they are working and how they use the shared data. Ensuring that you always encrypt user identifiers before sending them to any server is essential. As a developer, you have a responsibility to ask a user for their permission for any type of data used or sent to an ad network.
For instance, Apple's policy prohibits the usage of latitude and longitude data for use outside your app, such as sending the data for monetisation. Make sure there are accessible opt-out mechanisms in place for users and that the monetisation partners you work with adhere to users' choices; users must not feel exploited or they will walk away.
Don't forget to update
Finally, don't forget to update your software development kits (SDKs). These are optimised for newer platforms and include important upgrades that can improve an app's monetisation potential and will ensure your applications are compliant. Upgrades are worth the time spent as they help add incremental revenue.
It is essential that developers follow best practice, especially on which ad formats they use and when the ads are displayed in order to maximise ROI. App developers also need to consider different models such as paid versus freemium with in-app purchases or a combination of the two.
With it slowly becoming a requirement that developers are also savvy mobile marketers, following these simple tips will give any developer a head start in getting the most from their ads.