Adam Salamon is a co-founder and COO at Perk.com and Appsaholic, which offers free, lightweight SDKs for apps that help you earn more while keeping users happy with rewards.
A healthy app is an app that makes money. Yup, it's that simple.
But as we all know, monetization can be tricky. If you're experiencing ills like a low ARPDAU (average revenue per daily user, a measure of an app's monetization success) and user attrition, you're not alone.
But the good news is that there's a fix.
The right balance of monetization tools can get your app to its full revenue-generating potential in no time. It's easy to compare this to using painkillers, vitamins, and drugs.
This concept is typically used by VCs and startups to describe what kind of problem a new product to the market is solving.
But it works well for mobile apps too. To understand the balance, it's first important to know the medicine and see how it can be applied.
Painkillers reduce the headache
Something that helps a user get past a pain point or solve a problem in your app is a painkiller.
Users experience pain when they hit a point where they can no longer advance in a game. Maybe it's needing a better weapon or an extra life, or getting past a squeeze point. A painkiller is what removes that barrier.
In the mobile app ecosystem, Rewarded Video is highly successful as a painkiller. For example, watching a video in exchange for an extra life when you run out. We also see interstitials after completing levels or losing lives.
Users are immediately motivated by the reduction of pain much more than the introduction of positive stimuli.
These "rescue" moments that force a user to watch an ad in order to get further in a game or more coins in their game have done extremely well.
Users are immediately motivated by the reduction of pain much more than the introduction of positive stimuli. Painkillers are great at lengthening sessions and driving immediate revenue.
Vitamins benefit users long-term
Vitamins improve your health and quality of life. Not everyone takes vitamins, but those who do know the benefits and take them habitually.
In apps, vitamins are positive rewards given to users for actions they take, like reward programs or loyalty points.
You can reward users increasing amounts for each consecutive day they log in, or let them exchange points collected over time for big rewards.
In Smashy Road: Wanted, a mobile game that's been topping the charts lately, users can watch an ad in exchange for a small amount of extra cash.
It's not enough to make an in-app purchase with immediately, but it helps users save up for their next car in the game. Players have a reason to come back, and Smashy Road's developers rack up ad revenue.
Fewer users will buy into your vitamins. But those users typically become your whales, coming back over and over again. Vitamins increase repeat visits and retention, which in turn increase your revenue dramatically. Exponentially even!
Here's a study that shows that after 30 days, most apps only have about 3% of users who still use the app.
At our company, Perk, we proved with the app PrizeWheel that by adding a rewards system through our Appsaholic Rewarded Moments SDK, retention and repeat visits increased by 330%.
More users means more revenue, and rewards can help you make that happen.
Drugs play off impulses and emotions
Many apps and games use tools like sweepstakes, contests, and competitions that cause powerful emotions like euphoria.
It's clear that these work - it's what the whole gambling industry is built off of.
In the mobile world, this often manifests as a sweepstakes-style event. The user does something of value, like watching an ad or logging in every day, in exchange for a chance at the big prize.
Actually, entire apps can be built around this concept.
Perk Scratch & Win offers a chance to win a big prize, like gift cards or game consoles, or a smaller prize, like points which can be used for more scratches. Like a digital lotto ticket!
Though the chances of winning are slim, the possibility is enough to drive that instant, visceral reaction from people. Users are highly willing to do what it takes to win, so the monetization potential is big.
More value for your users in exchange for more value for you - that's what drugs are all about.
What's the right prescription?
So now that we've got all the ingredients. What's the right mix of medicine for the app developer to drive ad revenue while users still have a vested positive experience that doesn't cause churn a day later?
It's a combination - a daily dose of painkillers and vitamins, with drugs used sparingly.
Painkillers are great introductions to engagement with ads, while vitamins provide retention for the long term.
- Painkillers like content blocking, rescue moments, and squeeze points drive initial interest without driving the user away with too many ads.
- Vitamins like rewards points, status, and asset construction provide an incentive to keep engaging with not only your app, but the ad content within.
Ultimately, it's about finding the right balance for your users and your app. With painkillers to get people started, vitamins to keep them coming back, and drugs to drive interest when you need it most.
The author does not condone drug use in any way. Drugs are bad, mmkay.