Mobile ad monetization: challenges, trends, and future for this multi-billion dollar segment
Pizza and wine are good. But perhaps not quite as good as massive ad monetization.
At least that’s the impression I got from Lisi Gardiner, who’s Singular’s Senior Product Manager for analytics and focuses on ad monetization. Singular did a webinar on mobile app ad monetization in October, featuring Gardiner and experts from Game Hive, Neon Play, Voodoo, and Mopub.
Lisi’s talking “ad mon” late at night on the last day of a long week as we prepare for the session. With the weekend — and pizza and wine — beckoning. I’m the one keeping her from the pizza and the wine, but she’s cool with it.
“Well, I would rather talk about ad mon than eat pizza and wine,” she says, unconvincingly.
Listen to the interview behind this story on the Growth Masterminds podcast:
Ad monetization is one of those deceptively simple things. The concept is facepalm obvious: publish app. Put ads in app. Make money. The execution, however, has nuance. And not a small quantity of it.
“It gets more complex,” Gardiner says. “Which ads do you want to show? Which networks do you want to work with? What mediation platforms do you want to work with? When do you show an ad? What is the value you expect to get for showing that ad? Which countries are you optimizing?”
It’s not just hyper casual games that are monetizing via ads. Bigger, longer games are diving into mobile ad monetization as well. News apps have long monetized via ads. Utility apps are monetizing via ads. Pretty much any kind of app category that is capturing user attention can use ads, and publishers who want to maximize revenue know that paying app users are few and far between, statistically speaking. Ads make every mobile user monetizable whether they’re willing to pay or not, and given single-digit payer percentages in most app categories, that’s a valuable thing.
The tech matters here.
It’s obvious: you can’t set optimal bid ranges for new mobile users if you don’t know how valuable your users are. And while there are dozens of options for understanding how to value in-app purchase users, calculating the true ROI of non-payers is significantly more challenging.
The tech includes your app (of course), a mediation platform (usually one, but sometimes two), your MMP (Singular), something Lisi calls “Network Revenue Collection”, user-level revenue recognition, and a unified view that puts the ad revenue and IAP revenue together.
Which is, frankly, what Singular’s Ad Monetization Attribution & Analytics does.
But it’s not just about the data. It’s also about how the most successful publishers are structuring their teams for successful ad monetization.
“You’ve had two different teams,” Lisi said. “You have the UA team focusing on user acquisition and then you have the supply side.”
Working together, those teams — or even a single product manager — is constantly trying to harmonize things that are intrinsically competitive. More ads might bring more revenue in the short-term, but hurt retention in the long term. Ads in one position might fit right into the app experience, but never generate any revenue; ads in another position might harm gameplay.
“So there’s kind of like finding a balance between … annoying my users with so many ads that it’s like total spam and they don’t want to log back,” Gardiner says. “And also making sure that … the user enjoys the experience, and that they’re watching more ads, and that it’s a good place to load the ad, and that they’re engaging with it.”
It’s a complex dance informed by data: user-level revenue data as much as possible that supports decisions on placements, ad frequency, setting bid floors, and more. Most are doing in-app bidding, but some are still managing waterfall auctions.
In smaller studios, these teams might be the same group, or even the same person, providing a very holistic view of what’s happening in their apps. In a fairly mercenary sense, users are the coin: acquiring them is one side, monetizing them is another.
Putting it all together, app publishers can optimize engagement, retention, and monetization.
But it’s not easy.
That’s one of the reasons why Singular brought together experts from Game Hive, Neon Play, Voodoo, and Mopub to talk through all the challenges and opportunities in mobile app ad monetization.
There are major insights from leaders in ad monetization. There are major takeaways on scaling revenue and growing your app, as well as mixing IAPs and ad monetization together in a hybrid revenue model. And: how to structure your team, and what tech you need.
The one thing we can’t promise? Pizza and wine.
But, as Gardiner said … ad mon is more interesting.