Nadav Ashkenazy is VP of global partnerships at IronSource.
In my previous article, I discussed how to monetise your IAP-based game with ads, which delved into how to include ads in gameplay, to not only increase revenue but also to improve retention and IAPs.
The conclusion outlined some key areas to focus on to further optimize your monetization strategy.
In this article, I'll explore each of these items in more depth so that you can further squeeze the proverbial monetization lemon.
Let’s dive in.
Know your numbers
Benchmarks are the key to creating a north star for your optimization strategy. They vary across genre and ad unit, so your first step must be working out the benchmarks which are relevant for your game, so that you have a target goal to optimize against.
Beyond standard metrics like ARPDAU and eCPM, consider looking into other benchmarks such as engagement rate and usage rate.
- Engagement rate is the ratio of how many of your unique daily active users are engaging with each ad unit - worked out by dividing your engaged users by your total active users.
- Usage rate shows how many ads those engaged users are watching. These metrics demonstrate how your players are engaging with your ads, and highlight if you’re reaching the monetization potential of your game or not.
If your engagement rate is low relative to your category benchmarks, check what you could improve to drive more of your active users to engage with ads, such as offering dynamic rewards based off the user type.
Engagement rate is king, because the more users engage with your ads the more first impressions you generate.
If your usage rate is low then consider how you can get more of your engaged users to each view more ads, such as packaging rewarded videos into sets, with each set giving a larger, more substantial reward than an individual ad can offer.
Ultimately, engagement rate is king, because the more users engage with your ads the more first impressions you generate, which in turn translates into a higher average eCPM and therefore more revenue.
So, with benchmarks in mind, aim high, reaching your benchmark for ER and UR means you’re maximizing your ad monetization potential.
Test Everything
Next it’s time to test your ad units. You may have a great theory on what will work, but the crucial thing here is to ignore your gut, and run an A/B test to ensure that the results are accurate and measurable.
It’s important to base your decisions on LTV and not on ARPDAU because, as I explained in another article in PocketGamer, which spoke about integrating the right ads at the right place in your game, increasing the number of impressions indiscriminately can hurt retention.
So, what should you be A/B testing?
You can test different types of ad units, test capping and pacing, and try out different reward values. Then you could run waterfall tests, such as seeing how cross promotion works for you, running a country versus worldwide optimization, and switching up the number of instances used.
Know your players
Segment your users correctly and you can maximize revenue even further.
Start by looking at which players are generating revenue and how - who are your engaged users, which players are your IAP whales, which are your ad whales, and which are not bringing in any economic value at all. Then adapt the game accordingly to each user type.
Interstitials for IAP whales are not a good idea, but user-initiated ads should be implemented and with precision.
Rewarded videos should be cleverly implemented for your ad whales, both in their placement and reward type.
It’s important not to ignore this group. Ad whales can often be as valuable as your paying users, and you must connect this group to your monetization strategy and decision making process.
Different strategies for specific geographies
Another potential segmentation option is to build different strategies for specific geographies.
In countries where IAP is low, mainly in tier 3 countries, try including an offerwall which will give users a high reward compensation in exchange for their time instead of their money.
You could also be more daring with the frequency of ads, since there is little chance of cannibalizing IAP. Alternating ad units by country and revenue can hugely impact your ability to get the most out of your different user segments.
The right ad unit with the right reward can have huge implications for a game’s success, and should not be an afterthought.
The next step is to test out different offers. For example, if you have a segment of non-payers, then you can afford to increase the reward amount since it won’t harm your IAP among that segment, while it could drive higher engagement and usage rates.
It’s also a good opportunity to test out capping a reward. Give a small amount of a more valuable reward to let them taste the benefit of that reward, and hopefully improve future conversation. Tease, cap and reap the benefits.
Finally, it’s important for you to think of ads from day one. If you build your game to support ad monetization, it will function as a natural part of your game and player experience, and its impact will be infinitely stronger.
Take rewarded video as an example, which when implemented as part of the in-game economy rather than as an ad unit, can actually fix or improve the retention funnel in a game.
The right ad unit with the right reward can have huge implications for a game’s success, and should not be an afterthought.
In short
If your monetization strategy stops at the basics of what ads to place, where and when, then as your game and its audience matures, you will have a tough time making it in the long run.
Once the basics are covered, find niches where you can have an influence, where you can provide a better user experience, and where you can squeeze the lemon even more to stay ahead of the curve and on top of the charts.
Find out more at IronSource.
