Monetising an app is a major challenge, and not because developers are struggling to come up with innovative ideas – it’s because they are not always using all the right approaches to optimise inventory in order to monetise it. Using their knowledge from over the years, the app advertising network AppFlood have developed a free ebook covering Android App Monetization serving as a useful guide to developers. The ebook provides tips and tricks on how to make money from an app, including the basics of industry terminology and to how to avoid the most common mistakes and develop a sophisticated monetisation strategy. The ebook is based on some of the content on the AppFlood blog, which is one of the best places to learn about app advertising, marketing and revenue generation.
Below we’ve summarised and highlighted some of the key points on app monetisation and making money from an app or game.
eCPM stands for effective cost per thousand impressions, it’s one of the calculations used to determine how well your app is monetizing from the ads you’ve published. The higher the eCPM, in theory, the more money you’re making from the advertiser for every 1,000 impressions. The calculation has come under much criticism for being misleading, however – eCPM is simply a comparative metric, and should not be used to maximise your advertising revenue.
The fill rate is all to do with advertising: it evaluates the rate at which a publisher has successfully sent and received a request for a full ad impression from an ad network. For example, you sell 100,000 impressions on your app for advertisers to display their ad, and 100 of those ads fail to appear your fill rate would be 100,000- 100. It goes without saying that the better your fill rate the more valuable your app is to advertisers. Some key points:
- Not all of the ads requested by publishers will successfully display for various technical reasons
- Having a fill rate that is as close to 100% as possible is the main goal for a publisher – this maximises the chances that their users will click an ad
- Fill rates when applied to an ad campaign: the metric calculates the percentage of “wasted” inventory
CTR stands for click-through rate, essentially how many times an ad has been clicked on. The calculation is made by dividing the total number of clicks on an ad by the total number of impressions. CTR is used to help determine the value of an app’s ad impressions and also the quality of the advertiser’s creative – this is why certain ad formats generate much higher CTR. A few of the key points in the article are:
- The formula usually is: the higher the number of clicks you get, the more revenue you generate.
- List and panels ads command the highest CTRs – both of these ad formats promote more than one app within one page so this high CTR result is understandable
- Mobile banner ads have the lowest CTR – an older format that is mostly ignored by users.
Install rates are quite an easy concept to get your head around – an install rate simply refers to the amount of downloads a developer gets from their advertisements. To calculate the install rate you divide the total number of installs by the total number of clicks – converting this to a percentage is performed by simply multiplying the result by 100. In Appflood’s guide they have provided a very helpful table which depicts the IR for each ad format so you can see which is the most successful. Some of the key points to take away are:
- Despite having a low CTR, the custom ad format converts clicks into installs well with a 2.20% install rate
- The higher the rate of users that install an app, the more users an advertiser acquires
- On the AppFlood platform itself, banner ads saw the lowest rate of installs with a 0.93% IR during August of last year
Once you have gained a good understanding of the different performance calculations, such as eCPM and CTR, you can use combinations to calculate your overall app revenue. For example the way to calculate the mobile ad revenue with the eCPM formula is: revenue = eCPM x impressions. It is important to be aware of the revenue generated by your mobile app as this will assist you greatly in any future development or your next project. The other calculations to find out you mobile app revenue can be found within the article.
An important aspect of the app monetisation process is making sure you are not making basic mistakes – it can often be the most simple of areas that are ignored or misunderstood. Seven key mistakes that you want to avoid are:
- Never asking your monetisation platform for help – Don’t be afraid to ask for help. Platforms like AppFlood are in the business of monetising apps, they may have additional data or may even offer advice on using their tools.
- Failing to analyse data – Analyse the data and learn from it. Many developers give up on a platform before even attempting any form of optimisation.
- Maintaining identical iOS and Android monetisation strategies – There’s a high chance that a monetisation strategy that works well on iOS is not going to work well on the Android OS. They are different platforms, so each needs an individual strategy.
- Being afraid of interstitial ads – Developers are scared to use interstitial ads because they usually interrupt a user’s gameplay session. The trick, therefore, is to ensure that gameplay is never interrupted. Show the interstitial ad just before a user exits their game instead.
- No attempts to creatively integrate ad formats – Developers should be creative and optimise their ad placements. Make them blend in with the app or game’s UI.
- Misunderstanding eCPM – eCPMs are not everything on their own, don’t forget to consider the fill rate and overall impressions as well.
- No clear growth strategy – You needs users to properly market your apps. Try saving up a budget for a burst campaign by promoting other successful apps, then use that budget for burst campaigns.
AppFlood states that app advertising is maturing to the point that you don’t need to have an app the size of Angry Birds to make good money from the advertising – they set out to prove this point with 10 helpful tips. From ditching banner ads because they are hugely frustrating to the user and are hardly ever clicked on, to choosing a network that actually makes realistic claims involving eCPMs, and quite simply asking directly for better terms to an app developer on a transparent ad network, AppFlood has covered some key points in their article – the full list of tips is below:
- Think recommendations. Not ads.
- Everyone’s a loser with banner ads. Ditch them.
- We love app lists. Average eCPMs over $4.50
- Choose networks that make realistic claims
- Cut out any middleman fees
- Reduce the number of redirects ads go through before they’re served in your app
- Mix and match the right ad formats for your App
- Connect to multiple networks and focus on best performers
- Block poorly performing apps
- Simply ask for better terms
Despite being heavily criticised, eCPM is still an important metric, and therefore keeping a close eye on your data and good management of your monetisation strategy is key to retaining a high eCPM and subsequently a better ROI. However, knowing exactly why your eCPM is dropping isn’t always a clear cut answer, which is why this guide is particularly helpful. AppFlood states that a declining eCPM means a decrease in overall revenue. The network also identified that eCPM simply measures the quality of the advertisers that are publishing the ads on your network. The ten reasons that are listed in the article are:
- Low-quality advertisers are driving down CTRs and IRs
- An ad format was poorly deployed or recently changed
- Your app’s buggy update is affecting user loyalty
- An app store developer policy suddenly changed
- Major mobile advertisers ended their ad campaigns
- Your app is giving out too many ad impressions
- You’re not optimizing your mobile app monetization effort
- The holidays were just a couple of weeks ago
- There are too many middlemen taking a cut of your earnings
- Fluctuations in an ad network’s supply and demand
Think you know all the monetisation strategies out there? The chances are you probably don’t. There are so many creative and innovative ways to make money from your app that even 40 seems like a low number. However, chances are if it’s not on the list it’s probably not worth doing. From alternative app stores to mobile partnerships, this extensive list should help to boost your cash flow. AppFlood concludes by saying that mixing and matching the above strategies will increase your chance further of making money from your app – there are many options and combinations to try. The 40-strong list is divided into key sections to help break down all the points – the sections are:
- Paid Apps
- In-App Purchases
- Display Advertising
- App Promotion
- App Development
- Sales and Merchandising
- Selling App Data or Source Code
- Mix and Match
This may seem a little outdated as we have gone well past the new year, but these rapid money building strategies could be just what you need – they can apply to any time of the year. This section as all about defining your marketing strategies and getting the most out of your app. It covers important topics such as keeping up to date with the ever changing mobile industry and ensuring your efforts are being pushed in the right direction. A summary of the key points is below:
- Make sure you’ve optimised your mobile app – remember to make incremental improvements to your app and ad formats that will drive up eCPMs, clicks and installs.
- Allocate traffic to high-eCPM advertisers – allocate traffic to the key advertisers in an effort to accrue a higher rate of installs and clicks in a short amount of time.
- Prepare for the holiday rush – create holiday-focused content to pull users back into your app and secure inventory by reaching out to publishers using direct deals on the AppFlood network.
- Make noise with PR and social – social and PR keeps your user acquisition costs low and should result in more users, which consequently, means more clicks and installs.
- Develop a derivation of your mobile game – not a full game though; a re-skinned version of your popular mobile game, but with a brand new theme and characters, might prove to be beneficial.
We hope these monetisation tips from AppFlood help developers to avoid the most common mistakes and allow them to create sophisticated strategies going forward.