It’s Official, Offers Don’t Cannibalize IAP Sales

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Kevin Ford

October 31st, 2012

We recently conducted a user acquisition campaign for a game developer that acquired 82,739 users in 24 hours. Little did we know, the developer was also in the market for a new monetization solution to supplement revenue from in-app purchases. He was hesitant to implement offers, fearing that they would cannibalize in-app purchase sales.

With hundreds of thousands of DAU’s and a need to grow his app business, the developer ignored his gut feeling and started vetting top monetization platforms. Impressed by NativeX’s rare collaborative approach (and the remarkable results from his user acquisition campaign), he decided to swing for the fence, implementing free offers through the NativeX Platform. After a quick integration of NativeX’s SDK, the developer remained skeptical – still convinced that free offers would cannibalize his in-app purchase sales. For weeks he kept a close eye on IAP revenue, waiting for a decline.

Sure enough, the decrease in IAP revenue never occurred. In fact, the average revenue per daily active user from in-app purchases (IAP ARPDAU) remained steady through the first month and increased in the second month. Adding revenue from NativeX’s discovery wall to the mix, average revenue per daily active user (ARPDAU) increased by 83% and total revenue post-rev share was up 21%. In the second month, ARPDAU increased to 162% and total revenue post rev-share was up 115%.

iap-arpdau2

Although it remains a hot topic of discussion among some mobile game developers, if your monetization solution is implemented intelligently, placing offers in mobile games will not cannibalize in-app purchase sales. It will, however, provide an opportunity to monetize the 95% of users not willing to purchase virtual goods!

You can learn more about the benefits of the NativeX Platform with Offer Exchange here. Additionally, NativeX provides production support, analytics, and a marketing fund to help level the playing field for indie game developers.

Kevin Ford

Marketing Manager

2012-10-31

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