Developers in the gaming space are approaching growth in a way they’ve never done before - merging their monetization and user acquisition efforts and creating one virtuous cycle of growth. Previously, monetization and user acquisition teams were siloed, which hindered their own ability to grow. How can UA managers buy efficiently if they don’t know how much advertising revenue the monetization team is bringing in and how? With the two interacting with and informing each other, both sides gain a truly holistic view of the entirety of their business.
Ad revenue measurement brings these two teams even closer. How? By giving monetization teams insight into users’ true ARPU, UA teams get the ability to accurately measure ad revenue on the device level, combine it with IAP revenue, and link that data to the marketing channel or creative that brought in the specific user.
Here are three ways app developers can utilize ad revenue measurement:
1- Buy users more efficiently across all marketing channels
Over the past year, we’ve witnessed the rise of 100% ad-based games (ie, hyper-casual), and even IAP developers implementing more ads to monetize their user base. However, without ad revenue measurement data, these games (no matter the proportion of ads they use) couldn’t properly identify ad ARPU - preventing them from learning which marketing channels drove their highest-valued ad engaged users.
Likely, these developers were either underbidding on strong marketing channels or overbidding on weak channels just because they thought that the users they were acquiring weren’t generating significant revenue. But even though these users weren’t making IAPs, perhaps they were generating a large amount of ad revenue.
With access to ad revenue measurement, app developers can pinpoint the marketing channels that bring in high-value ad users, and bid higher and lower where necessary. Ultimately, when developers don’t have access to or ignore ad revenue measurement data, they don’t know the exact value of their users, and are unable to bid effectively.
2- Understanding your users and optimizing your monetization strategy
By giving monetization managers a complete picture on a user’s true ARPU, which combines both ad and IAP revenue, ad revenue measurement makes it easier to segment based on monetization behavior. Ensuring that placements are both relevant and personalized results in a higher engagement rate and more revenue.
For example, developers can use ad revenue measurement data to identify ad whales, create segments around these players, and monetize them accordingly. It’s important not to cap the number of rewarded ad impressions for this segment. Since more often than not these users will engage with rewarded ads every time they’re exposed to them, it’s best to show them as many opt-in ads as possible. This is guaranteed revenue and guaranteed engagement.
Conversely, developers can segment users who aren’t generating any ad revenue at all, and show only system-initiated ads. By covering every ad revenue segment, you’re better able to maximize your revenue.
3- Utilize the ROAS optimizer
If developers are already utilizing ad revenue data, then there’s nothing stopping them from using ironSource’s ROAS optimizer. The algorithm, which optimizes for ROAS, considers both IAP and device level ad revenue data in order to work out the optimal bid and reach desired ROAS goals. Once the optimizer has determined the optimal bid, it’s able to automatically update thousands of bids at a time. This solution ensures that UA managers maximize both scale and performance - easing the level of manual work through automation.
In fact, when hyper-casual developer Kwalee utilized the ROAS optimizer, they reduced their eCPI by 10% and raised ROAS by 30% on Android and 40% on iOS. This tool allows for UA managers to bid on actual user quality.
With ad revenue measurement data, developers have a full picture of where the revenue they’re generating is coming from. Now, the industry has a data set at their disposal that can help them determine their overall app business health, optimize in-app ad monetization strategies, and most importantly, optimize UA campaign spend. Ad revenue measurement perfectly bridges together the monetization and user acquisition side of app businesses, and now the gaming space has access to data that is actionable for both monetization and marketing teams.