Do you want to set up monetization on your own or hire a monetization manager? Should you switch to programmatic or use a conventional waterfall? Whether you want a manual or automatic? Should you test cross-promo? Or have direct deals with ad networks?
But don’t let yourself get stressed out too soon, we’re here to answer all of those questions and more today. We’ll help you wrap your mind around all the things you need to bear in mind while tuning your ad monetization.
- What is Monetization?
- 9 Things To Look For In A Programmatic Monetization Partner
- 5 Things To Look For In An In-App Monetization Partner
- How to Choose the Right Monetization Strategy for your App
- What is a Monetization Strategy?
What is Monetization?
Monetize refers to the process of turning a non-revenue-generating item into cash, essentially liquidating an asset or object into legal tender.
The term “monetize” has different meanings depending on the context. Governments monetize debt to keep interest rates on borrowed money low. Though, if the need should arise, they may also do so to avoid a financial crisis, while businesses monetize products and services to generate profit.
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Monetization goes hand-in-hand with capitalism—and is just about as old. The process of monetizing is very important to a business or other entity’s growth as it is key to its strategic planning.
The U.S. Federal Reserve monetizes the nation’s debt by buying notes, bills, and bonds—collectively known as Treasuries—issued by the U.S. Treasury. The Fed issues the government credit, which the government uses for its operations without actually having to print any excess money.
This type of monetization puts the government’s debt on the Fed’s books and puts money back into the system. Although considered a less desirable option, governments can also buy their own debt by printing money out of thin air, which increases the money supply but causes inflation.
Web publishing and ecommerce activities have made monetization a well-known concept among average Americans. Website owners monetize their websites by making spaces available to advertisers, thereby earning income from various types of content published on their sites. More sophisticated forms of web monetization involve creating sales funnels from subscriber lists and producing e-books from previously published content.
Government Debt Monetization Example
For simplicity, say the government needs $50,000 for a social program. It raises $45,000 through taxation but still needs $5,000. The government can either borrow the money, print the money, increase taxes, or reduce spending.
The government decides to borrow the money from the public by issuing $5,000 in bonds and offering bond buyers favorable interest rates. The government now has the money it needs—$45,000 raised from taxes and $5,000 raised from the bond issuance—for its social program.
Commercial Monetization Example
When people browse websites and click on advertiser links, website owners—either individuals or large media companies—earn money. Website owners may be paid for the number of times site visitors see advertisements without engaging with them, depending on the arrangements with advertisers.
If a website attracts enough visitors, the money paid by advertisers can add up to substantial earnings. If a particular website has proven traffic stats, companies may pay more to place advertisements on the site’s home page or certain pages that attract large numbers of visitors.
Selling apps and subscriptions, and producing multimedia content such as videos and podcasts, are additional ways businesses monetize content.
9 Things To Look For In A Programmatic Monetization Partner
Programmatic is the default mode of selling and buying ad impressions online. Typically, publishers partner with sell-side platforms to auction their ad impressions to media buyers. eMarketer predicts that up to 88% of the digital advertising dollar in the US, will be spent on programmatic by 2021.
It is common for a publisher to work with multiple SSPs simultaneously to ensure the best possible revenue. And, header bidding wrappers are the most popular and efficient way to connect to multiple SSPs for selling the ad impressions.
While the proposition is quite simple — ‘implement header bidding to experience an uplift in your eCPM and revenue’ — it’s difficult for publishers, especially, the smaller and mid-sized ones to choose the right header bidding provider.
More often than not, to make sure that they are working with the right monetization provider, publishers go through a lot of trial and error, making and breaking partnerships, and finally settling with the ones that work best for them. To make this process simpler and less erroneous, here are the top 9 things you should look for in your next monetization partner.
1. Offerings
Have a look at the offerings of the monetization partner. Do they offer everything you want? To answer this question, you need to be aware of your requirements. Do you need A/B Testing? Yield Optimization? AdOps support? Specific high-impact ad formats?
Before making a deal, make a list of offerings you need from your monetization partner and then find out whether prospective partners can meet your expectations or not. Though it is unlikely to find a partner that can offer all the things you need, you should get most of the challenges addressed with a single partner. Why you ask? Reduced intermediary fee.
2. Demand Partners
The ultimate source of your revenue is from the buyers that want to place ads on your site. The demand from the advertisers is brought to you by the collective efforts of DSPs, SSPs, Wrapper technology providers, etc.
Therefore, while working with wrapper providers, look at the demand partners they work with. Your motive should be to ensure that you are getting the best demand that can intensify the competition and improve the yield substantially.
Most of the mid-sized publishers wouldn’t be able to get SSPs like OpenX, AppNexus, etc. directly due to the higher threshold, but a header bidding provider can get them in. You can check with the header bidding partner to see the demand partners they’re integrated with.
3. Sophisticated Technology
Your monetization partners should be technically sound enough so that they can fulfill all your technical needs. Find out whether the platform can help you run header bidding, PMPs, video ads, etc. Find out how they assist publishers in fraud detection, invalid traffic detection, ad-block recovery, viewability measurement, etc. Do they have established relationships with ad fraud detection companies, measurement providers that you can make use of?
In addition, the partner should also be able to support all the different kinds of devices and web frameworks (think, AMP) so that you do not miss any opportunity to deliver ads on any device.
4. Reach & Geography
Some partners specialize in monetizing the audience from specific geography. It can happen due to a strong presence in a geographical market.
When a monetization partner has more connections with the brands in a market then the traffic from the same market can be easily monetized by the partner. In other words, the partner will be connected to geo-specific DSPs.
If the majority of your traffic is from a particular country, then see if the partner can help you connect to geo-specific demand partners and maximize your eCPM. That being said, most of the SSPs in the market are connected to DSPs across the world.
5. Terms and Conditions (T & C)
You should pay attention to the terms and conditions of the monetization partner to know whether it is the best fit for you. Some terms and conditions like minimum traffic required to monetize the website can be checked even before contacting the partner.
Others like revenue-share, lock-in period, payment terms can be discussed personally. If it is viable for you to enter such terms then only you should take the matters forward.
6. Ad Experience
Only providing the service is not enough, neither an increased revenue or CPM is. You need to make sure that the quality of the service provided is good as well. The ads should not spoil the user experience on your site. So, if your monetization partner is providing a new ad format, then check out how it looks and find out how it affects the user experience.
Especially, keep up with the updates from the Coalition of Better Ads to avoid lousy ad formats and experience. It doesn’t stop with the format. From page load speed to ad rendering, ensure your visitors aren’t getting hampered in any way. The partner should allow you to set a universal timeout for the header auctions, asynchronous loading, among others.
7. Transparency
You should be able to receive all the information that you need about the performance of the ads. The reports should provide you the level of granularity you wish for. Check whether the partner provides header bidding reports with proper dashboards. There shouldn’t be any cost or fee that you are not aware of. All the processes should be known to you.
In the case of discrepancies, the partner should help you in resolving them.
8. Premium Support
Your monetization partner should provide you all the support necessary to ensure a smooth process from onboarding till the payment of the revenue. It should provide you the AdOps support so that you can focus on your core business activities. It should be aware of all the industry laws and should be able to make you compliant with any newly introduced policies like CCPA, COPPA, GDPR, etc.
9. Credibility
You cannot understand a company completely just by looking at its website. You can dig deeper by knowing about it from the other publishers.
You can read what people are talking about it on various review sites; you can visit online communities, forums, and social media groups of publishers, AdOps professionals, etc, and ask the members for their opinions. You can also talk to your connections in the industry if they have experience of working with the monetization partner.
The best way is to take a look at their case studies and understand how the products work to improve the yield.
5 Things To Look For In An In-App Monetization Partner
With mobile ad spend finally surpassing TV and desktop this year, accounting for 70% of all digital ad spend, selecting the right partner to help you take advantage of this shift has never been more important. Choosing an ally for your in-app monetization strategy is vital for long-term success, growth, and potentially even adoption.
Unlike desktop monetization, where partners are typically chosen after your website is created and generated a meaningful amount of traffic, in-app monetization partners are chosen when you start to write your first lines of code.
The partners you choose must be implemented prior to submitting your app to the app store so there are great incentives to starting your search early.
To aid in your selection process we put together a list of five key things any app developer should consider when selecting a monetization partner.
Quality
Given the importance of user experience for an app developer, if users have a negative experience with your app, it could lead to bad reviews and thus little to no adoption and downloads.
There is nothing more impactful to user experience than seeing a bad ad (i.e. irrelevant, malicious, offensive) while using your app.
Therefore, looking for high ad quality should be a primary consideration for an in-app monetization partner. The better the ad quality, the more likely your users will remain in your app for longer user sessions and return in the future—increasing your daily active user (DAU) numbers.
Ask potential partners how they ensure ad quality and if they work with any third-party fraud protection vendors. The transparency of their answers, and ability to provide you with evidence they are working towards improved ad quality, can tell you a lot about if you should work with them.
Integration
How your monetization partner integrates into your app is also a very important thing to consider because every integration impacts app performance. Your users are paying for data packages when not on WiFi, therefore every byte of data matters when they have to wait for an ad to load.
If you choose to integrate via SDK, look for a monetization partner whose SDK is very lightweight. The heavier the SDK, the more your user experience is negatively impacted by slowing down app performance and requiring more device storage.
Alternatively, if your partner has all three options available (SDK, server-to-server, JAVA script tag) you can experiment with the best option for you without having to experiment with new partners.
Geo Coverage
Realistically, your app users will be global. Thus, it is critical to work with a partner that can provide a seamless ad experience regardless of where your users are located.
For this reason, it is advisable to work with a partner who has data center endpoints close to your users. Regional endpoint locations will speed up your ad delivery, especially for data-heavy ad formats such as playable and rewarded video.
Additionally, you want to make sure the ads your monetization partner is delivering are relevant to the user region. A partner with demand in regions where your users are based will help you monetize your traffic more effectively, driving up overall revenue.
Supported Ad Formats
For developers, not only is technical integration important but the look and feel of your app should be second to none. When developing your app with the goal of maximum monetization, make sure your selected ad formats are currently supported by your chosen partner.
To build out long-term success, you need a monetization partner who not only supports currently available ad formats but one who proactively supports new in-app formats in this ever-changing landscape. This is imperative to your app staying relevant and will save you valuable time and development resources by future-proofing your overall app monetization strategy.
Fill Rates and eCPM
Perhaps the most important thing to consider when choosing an in-app monetization partner is their ability to yield the most revenue. Choose a partner who not only can fill most of your inventory but also provides the highest eCPMs.
The more fill an individual partner can provide, the less partners you will need to integrate with, leading to a lighter weight app. This not only frees up more real estate on your users’ devices but also improves the speed and overall user experience.
Keep in mind, however, there is a balance between fill rate and eCPMs, as 100% fill at $.01 CPM is not as valuable as a partner who fills 50% of your inventory at $.50 CPM.
How to Choose the Right Monetization Strategy for your App
When you own a mobile application, odds are you’ve invested a lot of time endeavoring to see how to drive income. Your users are rushing to mobile. However, the cash isn’t yet following.
The most straightforward path for the company to legitimize the budget needed for the development of a mobile application and management is to attach it to income. However, that is not easy to be done.
In case that mobile is the place your clients are connecting with your brand the most, it is imprudent to effectively abstain from putting resources into the mobile platform as the team does not view the ROI in dollars.
As per Statista, global mobile app revenue will amount around $190 billion by 2020. What’s more, there is a flip side of a coin – most people won’t use paid apps when there are free ones.
Envision the strong competition among free applications, and you will understand that your odds of hopping into the market with a paid one is thin to practically none. Obviously, you then need to search for different methods to monetize your applications.
Audience first
Before knowing the right strategies first, we need you to understand your target audience. So, the initial move towards the monetization of your application is knowing the answers to a couple of queries like –
- What makes your application exceptional and for what reason should individuals buy it?
- What might be the best methodology?
- What tactics are your rivals utilizing?
Some approaches permit application developers to start earning in a couple of days, while there are different techniques that initially carry users to the application and increment the number of app downloads.
A while later, they center around creating incomes. It is fundamental to remember that even before your application releases in the App stores, the app monetization model ought to be created in the application.
So, how about we take a look at the best app monetization strategies and models to recognize how we can profit from it.
In-app purchases
In case that you choose to keep your application free for download yet at the same time search for techniques of earning revenue with it, have a go at executing in-app purchases. They are a mainstream strategy for app monetization, both for Android and iOS.
This strategy is based on the system of the app being usually free; however, offering extra features to buy.
In-app purchase is amongst the most broadly utilized application monetization techniques in mobile gaming where you can pay real cash to buy specific points. For instance, in certain games, each time you have utilized your last life, you’re offered to purchase instant more lives instead of waiting for some time for new lives to restore.
In some games, you might be asked to pay for getting access to new levels or for uncommon things which can’t be acquired in a free version of the game.
Concerning both premium and free variants, you can allow hiding ads when using in-app purchases, either for a specific timeframe or forever.
Local ads are a great idea
Putting local ads within the application is also one of the favored ideas of mobile application monetization. It’s because they cause minimal interruption to the clients.
These promotions are blended smartly with the app visuals or different components, making sure that any of the commercials don’t stop the application performance or any of its procedure.
For consistent user experience, it is vital to design and build up the mobile application in like manner. Also, rendering advantages like improved click-through rate and easy visibility, local ads are very versatile to an application.
Interstitial ads/Full-screen ads
Also known as full-screen ads, are either videos or pictures that show up amid transitions in an application such as when you go to the following level in a game. Despite the fact that interstitial ads normally appear regular transition points, they can at present be truly disturbing, since users need to watch them till the last to keep utilizing the application.
In any case, this sort of promotion has a more grounded click-through rate than any other.
Pick the correct ad network
In-app advertising ought to be charming and not interfere with the user experience. That’s the reason it’s vital for an application company to search for an ad network that teams up with trusted brands, supports interactive ads, and makes use of smart advertisement targeting.
Google’s AdMob is likely a standout network. It gives various helpful SDKs which make it workable for app developers to activate in-app ads for various platforms, including Android, iOS, and Unity.
The network additionally makes it likely to cover further markets by altering advertisement content for the present location of the user; this component covers over 200 markets.
Additionally, AdMob gives a smart investigation and reporting trait to let companies settle on informed choices dependent on performance insights. Mobile developers can likewise effectively integrate AdMob with Google Analytics to get much more details into their users’ interactions with advertisements.
Selling virtual goods
The worldwide market for virtual merchandise – running from avatars, stickers, and coins to weapons, potions, and advanced levels – is vast.
On a fundamental level, any electronic merchandise can fill in as a conceivably monetizable virtual good, with video games like Farmville, Angry Birds etc likely being the most well-known variety by a long shot.
The ultra-prevalent Pokémon Go also provides users the facility to purchase a wide range of virtual goods, like “PokéCoins.”
The FREEMIUM model
A standout and amongst the most well-known strategies to gain an income out of your application is through a freemium app model. Freemium applications cost nothing to download, yet they regularly incorporate in-app purchases which generate money for the vendor.
In this, a user base is made first by the free form of the application. After that, they can upgrade to the premium version of the app if the application prevails to intrigue them and get their attention.
Apps like MailChimp, Evernote, and Dropbox have applied this strategy favorably.
A simple invite to download the application is sent to the target audience. Since the application is allowed to download for free, users wouldn’t fret out to attempt if it interests them.
Further, after the users try the app, they can settle on an informed choice about jumping to its premium model. It implies users trust your application and now they are outfitted to pay for it.
Subscription models
This monetization technique is like the freemium app model. The thing that differs between them is that a subscription app model offers paid content. Buyers download the application for nothing, yet with a limited amount of content (be it news, music, and so on.) before being urged to purchase in.
Under this monetization strategy, users are approached to pay a repetitive fee either for the utilization of the application completely or for specific features. More often, the charge is relatively low to drive users to pay.
News publications and magazines have since a long time ago worked under such a model, which is the reason it’s mainstream with the semblance of The Wall Street Journal and The New York Times.
Applications that function admirably with the paid download model and the freemium model can make subscription model work as well, as comparable pay-to-play usage is being suggested. Right now, this methodology is encountering an expanding interest.
This model will be your best decision when –
- The application is content-driven: Entertainment, news, music, video, or service applications.
- The app infers a high user retention rate and a high number of downloads.
Presently, the subscription monetization strategy is getting increasingly intricate. Most proprietors set up a few pricing ranges with a wide range of features, that encourages them to induce clients to buy into a lower level of membership.
Additional points
Here’s some additional steps you can take to make your monetization strategy better and earn more revenue from your app
Powerful content strategy
One more positive step to convert infrequent and new users into permanent, paying users is always to update the content on your app.
In this way, users have a valid reason for returning to your app for more. When there is a consistent flow of new content, even non-paying clients will more probably become customers.
Implementing data analytics tools
AppAnnie, Localytics, Countly, GameAnalytics, are only a few of the numerous application analytics tools accessible in the market for app developers to select as per their objectives.
These tools can divide your users dependent on their in-app action and help you dispatch predictive and targeted marketing efforts. From understanding various advertisement layouts, setting price targets to overseeing placements, these devices help app developers develop their company by empowering better ROI.
An application can be a great wellspring of revenue for any company. As an application developer, you ought to make sense of the strategy that would be accustomed to making incomes through the application.
The selection of monetization strategy is genuinely reliable on your nature of the business, your target users, what you require the app to offer, and so forth. The deal is reaching up to the soundest monetization approach.
What is a Monetization Strategy?
Simply put, a monetization strategy is a plan to generate revenue for your product. Like with any plan, it’s not something that is fixed – it should be flexible enough to develop with the product, the market the product exists in, and its users.
Goals can and will change over time, and so strategies need to evolve to continuously achieve the goals they’re designed to target.
1. Advertising
This is likely to be the first revenue stream to test, as it’s often far simpler to introduce a freemium model (a free ad-supported version and paid-for version without ads) as a tester to a larger monetisation strategy.
There are simple solutions to test this relatively quickly in your app, such as Google’s AdMob. Implementing Google’s Native Ads Advanced is an effective solution to monetise your user base with simple banner ads.
This was our first experiment with CCleaner. Thanks to our status as a Google Certified Agency, we were able to get access to a beta program of native ad integration – advertising that is shown using native UI components, meaning faster, less intrusive ads.
Using Firebase, we implemented Native Ads Express behind Remote Config. This allowed us to control which users, using which devices, were targeted within each country.
This was crucial, since Google had recently disabled a crucial function of the app for newer Android devices. By disabling advertising for these users, we didn’t negatively impact their experience, which allowed us to maintain our rating – a KPI that we were closely tracking.
Remote Config was essential to help us limit the impact of the advertising. Going one step further, we were able to A/B test things like changing the color of the ‘Upgrade to CCleaner Pro’ button. This enabled quick testing of the colour, as well as the location and type of ad that was most effective in terms of revenue, or least impactful on other KPIs.
These kind of expertise are the reason that we’re part of Google Developers Agency Program, which is further explained in this video.
There are, of course, many different ad networks that can, and should, be implemented if advertising is core to your monetisation strategy. The Chinese market, for instance, has ad networks specifically tailored for that market, which are designed to work within the various restrictions that advertising in this heavily regulated country entails.
As our CCleaner advertising rollout progressed, we started to experiment with Facebook advertising, in addition to AdMob, and found that the Facebook adverts had a far higher eCPM than the AdMob ads.
(eCPM is the ‘effective cost per mille’, which is calculated by the ad revenue generated by a banner or campaign, divided by the number of ad impressions of that banner or campaign, expressed in units of 1,000.) As a result of that, Facebook advertising was prioritised in the second iteration of the advertising strategy.
2. One time in-app purchase
This often comes in the form of an an upgrade to a Pro tier, which offers more features, or fewer/no adverts. This is something we implemented for CCleaner, offering a Pro version that had both more features and was ad-free.
It was crucial to make sure that we didn’t degrade the experience for those that were already regularly converting to Pro, so we sliced our market into:
We initially tested our advertising/Pro strategy with the second group, tracking our chosen KPIs over time, while slowly enabling ads for more users in those countries, and then beyond. The KPIs we tracked were:
- Average Revenue Per Paying User (ARPPU)
- Average Value per Transaction
- Revenue by country
- Cumulative Average Rating
- Installs on Active Devices
- Uninstalls by Device
We made sure that these didn’t dip to a predefined level, rolling out advertising slowly. Eventually, we achieved a worldwide rollout.
3. Subscription model
As the name suggests, subscriptions, if implemented correctly, allow for a recurring, periodic payment. This can be more complicated to implement, but has a longer-term benefit.
When considering the former, it’s worth asking yourself if you’re able to do the work that comes with offering a subscription service. For instance, will you offer refunds? Will your users expect more regular updates if they’re paying monthly (or otherwise)? How would this affect your existing development pipeline? Do you have the resources to cope with all of the above?
4. Gamification
This can take many forms, but overall, involves defining the goal you’d like to pursue – app session length, for instance – and a game to drive user behaviour to meet that goal.
This isn’t a standalone monetisation strategy – rather it’s based on advertising revenue, and/or incentivising people to upgrade to Pro.
One example is creating an in-app digital currency, which can be earned by watching an advert, for example. These ‘coins’ can then be exchanged for rewards, such as limited access to Pro features, or going ad-free for a limited time.
5. Invitation rewards
As the name suggests, this involves offering rewards to users who successfully entice friends or family to join the app.
Again, this isn’t directly a monetisation strategy. Rather, it answers another KPI: user numbers. Depending on the app, these new users can be monetised through advertising etc – although for many just increasing the user base (and therefore increasing sales) is the aim.
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It’s a strategy that is popular with extremely well-funded start-ups, who are engaged in a land grab for customers in a new market. Uber, for example, gives each customer account credit for each new customer they introduce, although the amount has decreased over time, as the service becomes more ubiquitous.
6. All of the above?
But why settle for only one solution? With CCleaner, we found that users across different countries reacted differently to advertising and in-app purchases (IAP), so opting for a hybrid approach was the best solution for this product.
We tested this with CCleaner, in territories where users were more likely to upgrade to Pro, validating our hypothesis that a mixture can work best. We found that we could drive IAP by displaying adverts, while still monetising free users.
Interestingly, this approach was particularly effective in the German market, where we not only saw a spike in ad revenue following the initial enabling for all users, but a general increase in IAP from users who didn’t want adverts, but until that point had chosen not to upgrade to Pro.
This combined monetisation approach allowed us to take advantage of both models, while not overwhelming us. Thanks to Firebase, we were able to test things like the placement of the adverts, and the most effective colour of the ‘Go Pro’ button, to fully optimise each model to increase revenue as much as possible.
And the results were impressive: in-app upgrade increased by 211% worldwide, and overall revenue, including ad sales, increased by 388%.
Ultimately, this success was as much down to research and testing as it was the quality of the app itself. By rolling out advertising slowly and in a controlled manner, first to the markets that were contributing the least financially, negative impacts were minimised.
This, in turn, allowed us to use agile methodologies to iterate on our findings so that by the time we came to use advertising in high IAP value countries, we were several versions into the strategy. The result? The rating of the app was maintained at 4.4 stars worldwide over the 12 months we spent rolling out the advertising worldwide.
