Ad Monetization – Key Steps To Get Started
Anna Badalamenti, Growth Senior Manager, is an established leader at Liftoff in Sales, Advertising, and Growth. During her time with Liftoff and Vungle, Anna has supported top global app publishers in their pursuit of creating high-growth and sustainable businesses. She is also responsible for the go-to-market strategy of Vungle publisher products and accompanying sales enablement. Anna is known to be a go-to resource for all things app monetization!
In this Q&A, Jessica and Anna discuss the best practices for publishers considering integrating ads in their apps.
Jessica: Let’s say I’m a publisher evaluating monetization strategies for my mobile games. What are the benefits of incorporating ads into my apps?
Anna: Today, 89% of publishers monetize their apps using in-app advertisements. In general, most mobile app users embrace or are familiar with an in-app ad experience. For app developers, using ads for in-app monetization can increase reach (the ability to monetize more users), engagement (in-app interactions), and retention (incentivizing users to come back to the app). Additionally, ads can complement other types of monetization strategies. For example, offering rewarded videos to non-paying users has been shown to generate incremental in-app purchase (IAP) revenue. Using a subscription-based model? There is also the subscription-based model that gives users access to a lite version with ads during a test period.
Jessica: Alright, I want to start monetizing. What should I know?
Anna: The mobile advertising industry is growing and evolving rapidly making it difficult for new publishers to navigate the monetization landscape. Over the past two decades, we’ve seen new innovations emerge that strengthen advertiser and publisher partnerships in the mobile ad space. Today, these partnerships take many forms and allow a lot of flexibility when it comes to build an ad monetization strategy, including:
- Direct deals: Publishers and advertisers can negotiate the sale of ad inventory directly in-person or through a third-party broker.
- Ad networks: Ad networks facilitate commercial relationships, acting as an intermediary between large volumes of publishers and advertisers based on existing supply and demand.
- Ad waterfalls: Waterfalls allow publishers to manually prioritize multiple demand sources to drive more revenue. They can be developed and managed using any number of technical solutions, including supply-side platforms or custom ad servers.
- In-app bidding: In-app bidding allows publishers to hold real-time unified auctions between programmatic and network-based demand sources within the app itself. This model cuts down SDK weight, improves efficiency, generates more revenue, and enhances user experience compared to the waterfall approach.
- Programmatic supply-side platforms (SSP): Publishers work with supply-side platforms (SSPs) to automate the management of their ad inventory. They can then sell it to brands and other apps, which are willing to pay for the opportunity to connect with new audiences.
- Programmatic ad exchanges: Programmatic exchanges assemble inventory from publishers, networks, and SSPs and pair it with demand from advertisers through real-time bidding auctions.
- Hybrid solutions: Hybrid ad solutions can offer any combination of features described above. For example, a hybrid ad solution might feature app bidding within an ad waterfall.
With all these options available, it is essential for monetization managers to strike a balance between in-app advertising and in-app purchases. Adopting a hybrid solution will maximize the potential revenue you can generate with your app.
Jessica: I am ready to incorporate ads into my monetization strategy! What should I consider?
Anna: As discussed earlier, there are lots of options for ad monetization. Before you begin picking your partnerships, consider the three following points:
- Start with understanding your user audience, so you can make decisions about your app economy, including ad monetization. As mentioned, even if you expect to retain users over long periods of time and drive app revenue through in-app purchases, incorporating ads can still be a great option for incremental revenue from non-paying users.
- Set your expectations regarding the percentage of your revenue that should come from ads. Clear expectations will help guide your decisions around ad types and ad placements. If you plan to focus on in-app purchases as your main monetization strategy, you may consider segmenting users and showing rewarded video ads to non-paying users. If you plan on releasing lots of titles and scaling with paid UA quickly, you will likely want to reach as many users as possible with interstitial and banner ads.
- List the resources you have available to dedicate to ad monetization, this will help guide the type and number of partners to work with. If you are just getting started and have limited resources to dedicate to ad monetizations, consider working with a mediation partner, such as AdMob, LevelPlay, or MAX. They can help guide you on the partners and ad types to use to achieve your goals. If you are planning to give a lot of focus to your ads strategy, you may want to consider the hybrid structure mentioned above that includes mediation, networks, and exchanges.
Jessica: How should I think about ad monetization rollout, testing, and scaling?
Anna: You’re ready to give it a go. Once you’ve spent some time considering the questions above, the next step is to choose your ad monetization partners. The right partners will not only offer the best technology to scale ad monetization yourself, but also offer other resources or guidance to ensure you’re ahead of the evolving mobile market.
Jessica: What are the most important things to keep in mind when choosing ad network partners?
Anna: Consider the full offering of each SDK ad network carefully (i.e. geo coverage, ad unit specialties, product, and tools) and how they will fit with your portfolio. We recommend working with 2-6 mobile ad SDKs (depending on your resources). This will allow you to find the right balance between ensuring top performance through competition and keeping SDK updates to a minimum.
For more information about adding Vungle as a network to your ad monetization strategy, please reach out to your account manager or [email protected].
People who read this blog were also interested in:
– Our ebook What is App Bidding?