How to Leverage User Understanding to Power Ad Monetization at Scale

Dave Edwards is SVP of Revenue at Audiomack. Formerly a full-time music producer, Dave brought his passion for music to his mobile app marketing career. Dave now oversees all revenue streams for Audiomack—a top 10 music app that helps artists share music and expand their listeners.

Learn more about Mobile Hero Dave.

Monetization Is Not One Size Fits All

Whether you’re just starting to explore ad monetization or looking to improve an already robust ad business, understanding the demographics for your app and user tastes will help you drive better outcomes.

When starting out, it’s common to spend the bulk of your time and resources mapping out the user journey without thinking about ad monetization SDKs until the very end. But at Audiomack, we know that understanding your audience is imperative to optimizing revenue and user experience. That’s how we scaled revenue 14x from 2017 to 2021.

Different user cohorts and types naturally gravitate toward specific ad formats and shy away from others. Understanding these tendencies and how they impact your userbase will help you plan and scale your monetization.

Understanding Your Userbase

For our app, collecting first-party age data has had a significant impact on our ability to understand our users and to monetize. In 2019, we began requiring age information during mobile onboarding, and we received some pretty staggering results. Over 90% of our users are between the ages of 18-34, with Gen-Z (18-24) ranking higher than any other age group.

As a result, we’ve been able to nail down which ad formats this particular demographic engages with and which they tend to avoid. For Gen-Z, research has shown that interactivity is key. As the first digital-native generation, Gen-Z is uniquely adept at tuning out traditional and non-interactive forms of advertising such as banners. By contrast, this demographic responds to bright, bold, interactive ad formats that offer something unique and grab their attention.

Armed with these insights, we leaned into interactive audio and fullscreen formats—we successfully piloted the former with several major brands in 2021. At a more macro level, we also decided to focus on video and full screen rather than audio ads—a surprising move for a music streaming platform. Here’s our takeaway: when deciding on an ad format, the medium of your app (audio streaming in our case) is less important to a thriving monetization stack than understanding your key user demographic(s).

Optimization Beyond Gen-Z

I’ll be the first to admit that our user demographics are unusual: most publishers don’t have the luxury of a well-defined age distribution or a demographic with clear engagement behaviors. But while our user demographics are unique, many of the lessons I’ve listed will apply to any app.

Acquiring an understanding of your userbase offers substantial benefits even for publishers with a less homogenous demographic distribution. For example, let’s assume your first-party data indicates that users follow an even age distribution: 25% under 34, 25% 35-45, 25% 45-60, and so on. Each audience will likely respond to different ad formats, content, and ad schedules.

The ad journey for each can still be customized using free tools such as Google Firebase Remote Config. Google Firebase Remote Config allows publishers to remotely set A/B tests and define specific runtime variables for different user groups or cohorts. In some cases, you can leverage industry-level data to great effect (for example, we gleaned some valuable insights from Pandora’s 2018 study on the receptivity of different age groups to audio ad frequency.)

Even if you can’t or don’t want to collect first-party age data, understanding user context unlocks similar levels of optimization potential. Are users in one part of your app more likely to be engaging in lean-back content consumption? If so—this might be a great place for audio and interactive audio. Are some of the content in your app targeted towards an older demographic? If so, be careful with novel and interactive ad formats. Instead, banners, pre-roll video and lower impact placements may work best. With the deprecation of iOS IDFA and Google’s impending changes around MAID in the coming years, first-party data and contextual targeting will become increasingly important for publishers looking to monetize effectively.

As with other aspects of your user journey, A/B testing is key. Firebase and similar tools make it easy to determine what ads specific groups in your larger userbase might prefer. Much of Audiomack’s success in mobile monetization is the result of relentless A/B testing of everything from ad formats to timing. Remember that each app is unique—surveying and testing your audience-level hypotheses is pivotal to optimizing your mobile ad stack.

Get Out There and Get Testing

With mobile development and optimization, the sky’s the limit. Besides testing different mixes of ad formats, timing, and other ‘macro’-level considerations, adventurous developers can use tools like Firebase to measure network performance against distinct user cohorts and optimize accordingly. Are users more receptive to specific ad formats at particular times of the day? Do user preferences for ad formats and demand partners vary by country?

Regardless of scale and budget, today’s developers have many tools at their disposal to create unique and highly-tailored ad journeys for each segment of their audience. Now it’s time to get out there and get testing!