Michael Levin, Managing Director of Yeahmobi’s European office, talked about the best way to monetize inventory and how Yeahmobi does it based on technology and data.
What are the major ways of monetization for app developers? Is in-app ads the most effective way? Which way does Yeahmobi offer?
The major monetization models for app developers can be divided into two main segments – monetization through user billing and monetization of non-paying users. The first segment includes all the models where the user is making some sort of a monetary deposit into the app, be it an in-app purchases, purchasing a premium package within a freemium product, downloading a paid app from the store etc. The second segment is ad-based monetization which includes all models where users’ engagement inside the app is “sponsored” by an external factor (an advertiser).
Choosing which model to use (or the mix of models) depends on the nature of the app. Hardcore games will usually go for in-app purchases and native or video advertising, aiming to attract the high LTV “whale” players who are very sensitive to user experience. More casual games will implement more flexible advertising models in addition to in-app purchases, as they rely more on a large volume of users with lower ARPU. And many utility apps for example will rely on ad-based monetization as the major factor in their revenue stream, in addition to some premium services.
At Yeahmobi we have developed proprietary SDK and API solutions, offering variety of formats like native ads, interstitials, display banners, and are soon about to launch our video SDK. We also have more vertical/market relevant options like dedicated SDK for monetizing out-of-store apps and others. In addition, we are working on location-based technologies to allow narrow and precise behaviour and situation targeting.
If an app can use in-app ads to monetize inventory, how to select the most suitable format, considering latest trends like native ads, rewarding video, geo-located ads, etc. What formats does Yeahmobi support?
It all depends on the in-app eco-system and the specific situation in which the ad will be served. Different types of ads can be extremely effective or nearly ineffective, depending on the user’s engagement at that moment. For example, if we take a casual game user that has just lost his last play, he will probably be quite interested to watch a rewarded video in order to be able to keep playing, while he might ignore a native placement. On the other hand, if we serve a rewarded video to him after a “win”, he will not be really interested, as he doesn’t need that reward at that moment. He however might click on an engaging interstitial while waiting for the next level.
Eventually it’s all about tracking enough data about the user, knowing in which situation/mood/stage the user is now, and serving the right ad format with the right ad to increase the CVR.
Yeahmobi currently supports the majority of the new-age formats (native, display, interstitial, developing rewarded and non-rewarded video), and we invest a lot of efforts into the precise, data-driven targeting, to maximize the publisher’s eCPM.
What developers should think about before considering on monetization?
The main reason native advertising started developing at the first place, is the so called “banner blindness” that users have developed during the past years. In addition to that, the app developers’ interest is to provide clean and non-intrusive user experience, in order to minimize the churn rates of acquired users. The issue is however, that if you make the ad “too native” sometimes the users will not notice it, and at the end of the day we still want our users to actually click on the ad.
Therefore, at times, developers are not maximizing the users’ monetization potential by simply being too cautious in serving ads. I strongly suggest to do split testing of different formats, to analyze how your users react to each one, and also keep different formats in rotation, because eventually the users will become blind to the same format being served over and over, even if it was the most effective one earlier.
Yeahmobi monetization tools allow this flexibility, and we are also making sure to maximize the potential eCPM from each format, delivering high fill rates by integrating various demand sources through mediation into the solution.
How to balance user experience with ads, as more and more users tend to install ad blocker?
The ad-blockers are definitely a hot subject in the market, as they potentially affect all the parties involved – advertisers who struggle delivering their brand to users, publishers who take a hit on their ad-based monetization stream, and agencies who help to connect between the two. In a nutshell, it is as if the ad-blockers decrease the amount of impressions available in the mobile market. Luckily for the parties involved, there are still enough impressions to go around, so as important as this subject is, it is still far from having a significant effect on the market in a short term.
In general, the introduction of ad-blockers will force the publishers to focus on less intrusive formats which might be more complicated for the ad–blocker to detect, and will improve the user experience. We also need to remember that at some point the ad-blockers will most likely look to monetize their products by allowing specific ads to go through for a fee, which might decrease the publishers’ margins, so it will be in the publishers’ interest to test new formats, and will drive the market to more innovation.
What do you think is the most important trend in app monetization currently?
I think that we are at the stage where developers are realizing that there is no magic solution for monetizing their audience, and one size doesn’t really fit all. So the most important trend we are seeing is diversification of monetization strategies. Once example we could look at is apps which are well monetized in the Tier1 markets using in-app purchases are struggling to reach their growth targets using same model in the emerging markets, where users are less inclined to spend money in the app. Those users however are still “less spoiled” by in-app ads, and by integrating advertising for specific markets into their product the app developers are maximizing their overall revenue potential. We are seeing great results with quite a few publishers who use our SDK in the emerging markets, same publishers that until not long ago were only focused on in-app purchases.
You attended and will attend two of the big mobile conferences in June, Mobile Summit in Israel, and White Nights in Russia. What is the most important thing you wish to say to or hear from both conferences?
These conferences are always a good chance to connect in person with our existing partners (both publishers and advertisers). These meetings allow us to better learn about their current strategy and future plans, as we at Yeahmobi always aim to proactively develop new products and services to complement our partners’ business. In addition, I am always on the lookout for new business opportunities, and with the rapid growth in our direct automated supply which brings real active users to advertisers, we are constantly investing in building user acquisition partnerships with new direct advertisers who can benefit from our services.
What I especially like in these events, is that it is an opportunity to connect with other industry leaders to discuss overall market trends and direction. With our hectic daily working pace, we can rarely allow ourselves to take a moment to stop and look at the overall market landscape, and these face-to-face knowledge sharing sessions with industry experts are definitely a valuable component in defining future strategies.
Michael Levin will be at White Nights Conference in St. Petersburg in Russia from June 28 to 29. Do not miss the chance to discuss face-to-face with him about your case of monetization!