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4 ways to boost ad monetization with user segmentation

As a game dev, you strive to create a fun and engaging experience for all of your players. However, your players are by no means homogenous, and their in-game experience should reflect that. The more relevant and personalized content is for your players, the more likely they are to engage with it, therefore bringing more revenue into your pockets. 

So, what is user segmentation? 

User segmentation is the process of dividing up your user base into groups based on their behavior and demographics, such as: age, country, gender, paying or non-paying, app version, level reached, etc. 

App user segmentation allows for game devs to drive high engagement and revenue by personalizing the experience of each player. Providing your players with the right content at the right time is an optimal monetization strategy. When you personalize content for each individual segment, you’re designing a strategy with the sole purpose of engaging and/or monetizing a specific path for one set of users which will then tempt them to make an IAP or engage with your ads. 

4 ways to segment your users

There are many ways to segment your players. For example, on the ironSource platform there are 14 app user segmentation parameters already set up - meaning data known to our SDK (device type, operating system, SDK version, etc) as well as a custom parameter which you can create yourself based on your own data. 

1- Paying players 

This segment contains players who make IAPs. In order to ensure that you don’t aggravate them unncessarily - without canibilizing IAP - be conscious of the amount of ads you serve to this segment of users because you’re already monetizing them. 

This doesn’t mean that you need to take an all or nothing approach. Consider showing less to users who spend more. However, you can also show paying users the same number of impressions, but just offer them less rewards in exchange for watching a video. Game devs should further segment their paying users based on the amount of revenue generated. We typically break down players into whales, dolphins, and minnows - keep in mind that there is no general rule for what constitutes each group as it varies according to genre and game. 

Whales are the biggest spenders in your game, but the smallest group. Dolphins are a larger group of users, who spend a lot but not nearly as much as whales, and finally, minnows come next. 

Serve each segment a different ad experience number(i.e. Frequency, reward value, exchange rate, mix of ad units, etc.) based on the amount of revenue they’re generating in your game. This is when capping and pacing comes in. Frequency capping allows game devs to control the number of times an individual user sees and ad within a sessions, whereas pacing allows for devs to manage the time between each ad impression. For example, for IAP whales show them 0 ads, for IAP dolphins show them 1 ad per session, and so on. 

2- Engaged players 

Engaged players are those users who are actively engaging with the user-initiated ads you’ve placed in your game. The magic of rewarded ads is their ability to transform non-paying users into paying users. Once engaged players are exposed to the benefits that are only available to paying players the chances of them converting increases significantly. Why? They’ve become more invested in your game - driving both higher retention and revenue. 

Keep in mind that if you have a player that engages with rewarded ads 10x everyday, you’re already generating a decent amount of revenue from them, therefore you have no reason to serve this segment interstitial ads. 

3- Zero value players 

Zero value users are those who don’t generate IAP revenue nor opt-in to user initiated ads. We recommend that game devs use a user prediction tool in order to determine early on which users are unlikely to ever engage with IAPs. Once you’ve determined this user segment, show these players system-initiated like interstitials or banners as these ads will monetize your users 100% of the time. System-initiated ads don’t require users to opt-in, therefore you’re sure to monetize each and every one of them. 

4- Country 

In addition to segmenting players based on how much they spend in your game, you can also segment is on a country-level. The monetization habits of a player in the US is different than a player in India, for example. 

Offer users from tier-1 countries double the rewards when they watch a rewarded video or complete an offer on the offerwall. Why? As they tend to have more disposable income, they chances of them purchasing IAPs later on is much higher. 

You can also replace your in-game store with an offerwall in tier-2 and tier-3 countries. The first thing that comes to mind now is cannibalizing your IAPs, right? Well, IAP revenue tends to be significantly lower in tier-2 and tier-3 countries, so there’s little chance of IAP cannibalization (i.e. offerwall or rewarded video hurting the profit you’ll normally generate through IAPs) since there isn’t much (or any) purchasing to begin with. 

Wrapping up

Segmentation is a powerful tool that should be in every developer’s arsenal - whether you’re a one-man show or part of a 20-person monetization team. In order to maximize both revenue and engagement, it is imperative to embrace user segmentation. Ad monetization strategies that embrace mobile app user segmentation will end up being all the more successful

Want to learn more about mobile app user segmentation? Head to our developer center. 

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