There are more ways to monetize mobile games than ever before. Which strategies are the most effective in 2019?
Mobile gaming is one of the fastest-moving tech categories today, and monetization methods are evolving just as quickly. Since the debut of the App Store, payment methods have proliferated to include one-time app purchases, free-to-play with IAPs, free-to-play with advertisements, subscriptions, and combinations of all of the above.
For new marketers and publishers entering mobile gaming in 2019, the wide range of options to choose from can be intimidating. That’s why it’s important to review each monetization method and determine the most effective for your chosen audience well into pre-production.
As of writing, free-to-play mobile games are overwhelmingly more popular than paid apps, and tend to accrue higher revenues. When monetizing a free-to-play game, developers must choose between advertising, IAPs, or some combination of the two. Of these options, advertising surged ahead in 2018, partly thanks to the widespread global adoption of hyper-casual games.
Hyper-casual is a rapidly growing sub-category of mobile gaming, noted for its minimalist gameplay and engaging replayability. It’s also proven highly successful and profitable while relying almost entirely on advertising revenue, a break from the 80% IAP, 20% advertising split we’ve usually seen over the last half-decade. To maximize revenue, hyper-casual publishers and marketers must optimize the entire growth cycle to promote a revenue-positive feedback loop, placing a strong emphasis on A/B testing ad creatives and targeting audiences with pinpoint precision.
These trends are likely to continue as we head into 2019, as hyper-casual growth shows little sign of slowing down. If anything, such optimization will become even more essential as hyper-casual games dominate the App Store and Google Play’s featured spots. You can learn more about hyper-casual growth from our latest CPI benchmark report.
Given the importance of mobile advertising, choosing the right ad format is essential. Each game’s marketing team needs to determine which formats are the most effective for their chosen audience demographic, and deploy the most engaging ad creatives for the particular group. Videos and interactive rich media tend to show the highest potential for gaming audiences and interactive end cards have proven to be highly engaging. Meanwhile, the banner ad format is largely being phased out since it’s rarely effective within an in-app environment.
One emerging ad format with genuine promise is playables -- short mini-games that highlight advertiser content. Playables can be built natively into an app or delivered through an SDK, but often work best when the experience reflects core gameplay in some way. If designed correctly, some playables can even be just as engaging as the hosting app itself, maximizing your revenue potential.
Whatever ad format you choose, the method of deployment alone can engage or frustrate players. Recent studies consistently show that opt-in advertising resonates with users, as opposed to ads that display automatically. Rewarded videos are an excellent example, offering players in-game currency or bonuses in exchange for viewing an ad for sponsored content. We expect opt-in and rewarded ads to become even more popular in 2019’s mobile gaming space.
Beyond ensuring you have access to engaging creatives, partnering with ad networks can pose its own logistical challenge, especially if you’re working with multiple platforms. That’s why many publishers are turning to mobile ad mediation solutions: individual SDKs that can manage and optimize multiple networks at once. These platforms streamline the advertising process to ensure publishers can maximize revenue, increase fill rates and eCPM, and address technical problems from a single interface. Many ad mediation solutions let you emphasize specific ad formats, while some even use programmatic auction technology to ensure the highest possible bids for your ad spaces.
Ad waterfalls -- the practice of selling ad impressions to the highest performing partner -- are another example of ad based monetization practices, albeit an aging one. In essence, ad waterfalls allowed publishers to top skim the highest performing campaigns from smaller, higher paying networks before falling to lower paying networks that offered greater fill. This strategy was once fairly common until it was replaced by the more efficient header bidding, which addressed issues with impression loss and maintenance times. While some claim that the time of ad waterfalls has come and gone, it remains an effective yield optimization strategy in circumstances when a non header bidding partner offers high CPMs at a limited fill. Just because a mobile practice has faded rarely means the industry has abandoned it entirely.
We’ve covered just a few of the most efficient monetization techniques marketers should use in 2019, but experience proves that change is common in this industry. New genres, formats, and marketing trends can always surge to prominence in a short span of time, which means publishers always need to monitor the broader advertising landscape. Subscriptions are one example of a monetization method publishers will occasionally dabble in, but we’ll examine that in more detail next time.
At the end of the day, the most effective monetization techniques are those which best engage with your players. That may seem daunting in 2019, when there are as many techniques as audiences themselves. Regardless, if you offer something of value to players and optimize your efforts according, your revenue -- and profits -- will rise accordingly.