The news that consumer in-app spending over the last holiday period rocketed 52% to total $500 million (compared with $300 million) should spur us on in 2017 to explore new ways to get players to dig deeper in their pockets. But we should also double-down on ways we can get more value (not just money) out of the vast majority of users that don’t spend in our apps – and likely never will.
If you’re chasing the “whales” and big spenders, and throwing back all the other fish in your net, then you are likely throwing money out of the window as well.
The hard truth: most people who download your app are not going to spend in it. In fact, the 2016 monetization report from marketing automation platform company Swrve, which provides a snapshot of how mobile gamers monetize, reveals that, on average only 1.9% of players are payers. That means that a whopping 98.1% (!) of users are not generating revenue.
Or are they?
Actually, your non-paying users are generating loads of value – but it’s up to you to hone your senses (and strategies) in order to recognize and reap the benefit. It’s all about understanding your users and identifying the best way(s) to extract the most value. Drawing from my personal experience – and campaigns and efforts that prompted games research firm Newzoo to call out InfiApps for achieving the best results and retention in the Social Casino app category – I have developed a checklist of 5 ways to help you wring more value out of every single user.
#1 Learn from users to optimize – everything.
Granted, less than 2% of your players will ever be payers, but – frame this problem differently – and you’ll see that the insights produced about how the majority of users interact and engage with your app is pure gold. Indeed, you can learn a lot by observing your users – and how they behave in your app. Is a level too difficult, causing users to abandon your app? Is there a bonus that players just can’t get enough of, resulting in longer sessions and higher retention? Let the data guide you to the right answers – and actions.
Collect and use data to optimize your app and shine a light on all aspects of the user journey in order to identify what works, what doesn’t – and how to fix it. Data is always “THE” key, so use it to unlock ways to make your app better and find ways to better monetize your user base. Think of it as a sure-fire way to turn non-paying users into paying users.
#2 Be brave and show some ads.
Show ads? Is that crazy?! I would say you’re crazier if you don’t show advertising in your app. Yes, ads can be a pain (which is why the use of ad blocking tech is going through the roof). But there are also a variety of ways you can use data to target audiences with more relevant advertising they find engaging, not annoying. There’s no denying that advertising is a great way to generate money from your app. It’s why we’re seeing CPIs increase from month to month, and why I am convinced it’s an approach that pays dividends.
Start by showing ads to all your users; that will allow you to cast a wide net from day one. Rely on real data and results to distinguish between the users who potentially fit the mould of a paying user, and those who don’t. How many days should you show ads to your user base? It’s a tough one to call, but your user data holds all the answers – if you know where (and how) to look. Let’s say that, on average, you observe that the majority of your paying users convert within seven days of downloading your app. It’s clearly a good idea to monitor results and show advertising in your app to players for that period and then only to non-paying users after that week is up. (Although it’s also a good move to tack on another day or two to be flexible and then show ads only to non-paying users that played the app at least 9 days.)
#3 Rewards are good – but don’t overdo it.
When it comes to mobile content, video is crushing it. Fortunately, a new neuromarketing report commissioned by MediaBrix, reveals the same positive trend holds for mobile video advertising. In fact, the user survey goes one better, underlining the power of video as a popular form of ad monetization and driving home the point that mobile video advertising can significantly boost IAP metrics in multiple ways.
It’s easy to see why reward video is an effective – and engaging – format, and a great way to generate revenue from your app. For users, it’s an incentive to stay engaged in-app. (What’s more, it’s much less intrusive and annoying than interstitial ads because the user opts in and initiates it.) For app publishers, it’s a way to get more ad revenue from non-paying users. For the advertiser, it’s a better quality experience all-around. They can show (and tell) more about their brand/app in 20 seconds of slickly produced video than they can communicate via a static banner.
- Don’t just give it away. Rewarded video is risky because you can easily bust your financial model. You don’t want to give your players a million in virtual currency just for watching a 30-second ad, but you don’t want to short-change them either.
- Set your limit. It’s important to put a cap on the number of times a user can watch a video. If you don’t, you open up the opportunity for a user to earn an insane amount of credits or virtual currency – and this can’t possibly be good for your app business.
- Analyze and then act. Examine your players to understand where they are in the game. What level are they on? How much currency do they have, or use as a rule? What have they invested (time, effort, money) in your game already? Data will give you the answers, allowing you to segment players and determine the reward that will keep them happy, engaged and coming back for more.
#4 Show off (all) your apps.
Even if all your users aren’t spending in your app, they are giving you their attention. It’s a great opportunity to show your users all the other apps you offer. After all, these users are clearly enjoying playing one of your games, so chances are that they will enjoy playing your other games – especially if you expose them to a similar app category or genre.
Showing an in-house ad in your app may sound like a great place to start. But the space you take is also advertising space you can’t monetize through displaying third-party ads. That’s why we choose to show native ads instead. Reams of research shows this format is incredibly effective, in part because native ads, which look like the rest of your game, don’t disrupt the game flow. Put a small native ad in your app home screen, and you’re bound to see a big impact.
#5 Make users an offer they can’t refuse.
Use special offers to break down barriers and convert even your most reluctant players into payers. Clearly, if a user has never made a purchase in your game, then a big in-game package offer is not likely to break the ice. Instead, lure this player type with a special offer that is (or at least appears to be) tailored to their individual preferences. Start small and be clever. For example, offer the non-paying user the lowest coin pack you have ($0.99), but with a much bigger value than the usual pack you have on offer in your store. Get them to take the bait, and you may just find you have a new paying user – one who might buy even a higher pack next time – because you “broke” that individual’s mental block around making in-app purchases. Breaking an old habit (not spending) by introducing a new habit (spending) is a lesson that just may stick.
Granted, there is no silver-bullet solution for converting the 98.1% of non-paying users into paying users. But if you can make even the smallest change in this percentage, you will find yourself on the way to generating significantly more revenue. After all, apps, especially gaming apps, are a huge business. At the end of the day, it’s all about finding new ways to generate revenue from your app.