Millions of apps have launched on the Apple App Store and Google Play, but how many actually makemoney? Unless you’re in discussions to be acquired by Facebook, you’re not running an app business unless you’re generating revenue. Long story short, most apps fail to make money.
Gartner recently reported a grim forecast about the future of app monetization: over the next few years,only .01% of consumer apps will be considered a financial success by their developers.
Currently, 60% of developers make less than $500 a month from their mobile apps. This leaves me wondering, what are the .01% doing right and how can more app developers get a bigger piece of the pie?
Obviously, a lot of factors go into creating the next top app. Sometimes it’s obvious why a game is successful, but other times the reasons are much more complex. Regardless, there’s one factor developers shouldn’t ignore if they want to be successful – advertising.
While it’s impossible to guarantee revenue, developers who utilize in-app advertising and with data on engagement, are heading down the path to success.
Balancing engagement with monetization
The first mistake made by many developers is relying 100% on in-app purchases. We all know in-app purchases currently account for the majority of revenue being generated from apps, but the percentage of users willing to make an in-app purchases is still less than 10%. How are you going to monetize the other 90%?
Instead of nickel and diming your most avid players with in-app purchases, developers need to reconsider advertising. When doing so, think about the advertising that you don’t find annoying, like ads during the Super Bowl, and engage users with those same standards.
Ultimately, all developers would integrate ads in ways that don’t disrupt the user experience, maximizing revenue while minimizing the annoyance to users.
In-app purchases will remain a vital factor in your monetization strategy, however, to build a sustainable business that can endure long-term fluctuations, developers must diversify their revenue streams.
Design your success natively
Developers and designers create the best apps when they are defending the user. For instance, if I were to ask you which apps have a better experience: apps with ads or apps without, you might be quick to say apps without ads. But, if I asked you your thoughts on the Facebook app you and thousands of others who have rated it on the App Store would say it’s a good app. That’s because it was built out for the user first… that doesn’t mean it doesn’t have ads. Facebook is successful because they follow basic principles for Native Ad Design.
Native Ad Design results in ad experiences that look and feel like part of the app. They are contextual, complementary, and relevant to the content of the app; not above, below, or beside, but a real part of the user experience.
For ads to win the attention of the user, they must fit the context of the app. NativeX recommends the following tactics for designing native ads for mobile games:
Use characters and elements from your app or game. Doing so increases the likelihood of engagement with the ad because of the relevance and recognition.
Rather than begging users to notice ads in your game, associations allow developers to create positive emotions and credibility, welcoming players to engage.
Color and Contrast
When choosing colors, select those that will catch the attention of the user while being mindful of their meanings and their appeal to the overall Native Ad Design.
For example, yellow and orange tend to instill optimism and friendliness while blues and greens represent calmer feelings. Your choices should correspond with the rest of the app and what the user is already used to seeing.
Lines and Gaze
Attract attention with the eyes of your characters and use their gaze to inspire curiosity. Together with the use of lines, you can lead the user to the call to action.
Through tests, we’ve proven that guiding a user’s attention to a video or ad with the character’s eye gaze increases action, and revenue for publishers.
Movement and Action
Movement from characters or the actual ad can create a reaction that leads to engagement from a user, but learn from the Web and use moderation – overdosing the user with movement will spoil the experience. Subtle movement is perceived as welcoming, and does not frustrate users.
Do you use ads with audio? Sound can be appropriate when there is a video component to your app. Unfortunately, more often than not it is implemented poorly. When done correctly, sound can create an experience that is memorable and easy for the user to consume.
These design elements aren’t a checklist for creating effective ads, but they will improve conversion rates. Developers should pair the native ad design elements with the following aspects to further improve their app monetization.
Time and place can trump all
The placement of your ads is just as important as their design. Consider mobile games, for example: You wouldn’t show players an offer wall that blocks the main app content at the onset of the app; because the player hasn’t gotten a chance to play yet. Similarly, placing ads during periods of long engagement will turn users away from the app.
A better method is to insert ads between levels, but use your data to identify where user “drop offs” are, and incentivize users at those times.
Three guidelines for increasing engagement include the following:
User Emotional State
As players in games, we go through four emotional states of engagement. Learning to coordinate the way you serve ads with those emotions enhances the principles of Native Ad Design and reduces disruption from the user experience.
Players tend to have positive emotions after completing levels; we’ve found non-incentive interstitial ads work best at these times.
The negative feelings players harness after losing a level pair well with incentivized video ads. Neutral states during transitions or when a player is toggling around in the menu, serves as a good opportunity for non-incentived video ads.
Ultimately, mobile apps should use five or six ad formats at various placements. Using a variety of ad formats and placements helps to ensure users do not repeatedly see the same ads; which is critical for maintaining a positive user experience.
Please, do not forget the users of your game are all different. When segmenting users, developers should not bother users with ads if they have made an in-app purchase. Doing so will annoy them and could cause them to use your app less. Generally, about 3% of users fall into this category, the other 97% of users should be A/B tested with different types of ads to see what works in your particular app.
Go forth and build your app empire
Creating effective ads that users will respond to with a positive attitude is an ongoing process. Developers should invest as much time as needed into development if they want to turn their hobbies into app businesses.
Following the guidelines above while staying agile and responsive to user data will equip developers to increase revenue without detracting from the great experiences they set out to create.