The state of advertising

So, after a lot of conversations with various people at the Mobile Gaming USA East conference last week, I thought I would give you guys some brain dump type info.

eCPM campaigns - nobody uses these unless they have seen they get an INSANELY high response and this is cheaper than CPC/CPI. Or your app is on Win8 mobile and using M$ as an ad platform.
CPC campaigns - about 3-5% of clicks result in installs. So the ad companies sell the campaign based on clicks, and when a company works out how much it ACTUALLY costs… they get pissed, and try bid super low for clicks. Admob is home to this more than anything else.
CPA/CPI campaigns - worth its own section. See below.

Imagine you have 10 apps installed. They all have an advertising SDK. Each SDK tracks new apps installed. This allows it to determine if a CPI occurred. Now what happens when those 10 apps have the same advert running on their network ? Well, a single install can result in multiple valid ‘installs’ - one for each SDK. So the client gets charged many, many times for a install! They figure this out pretty soon.

Freemium - a lot of apps are going this way. Interstitial on startup using chartboost/revmob if you have loaded the app more than X times. IAP. But no other ads. Better income, better user experience and screw the ad companies.

Reward system - I looked at these. Using the ‘best numbers’ the company sales guy gives you, it works out no better than a good day at CPC campaigns. This might be the way forward if it works AND the ad market stays depressed. However, it probably needs you to design your app to do this from the start. ie: advertising evolution: eCPM -> CPC -> CPI -> Reward based.

I read a blog post somewhere which suggested that “compared to last year” (every year there is a new fad I guess like the fashion industry ?) when paid apps were king - then it was IAP (in-app billing) was king (freemium with IAP) - and now saying that IAB is dead also - and choosing the right AppWall type of solutions (Revmob and Chartboost seem to be the favorites of the iOS developer crowd - or at least seem to have been pushed HEAVILY by some blogs - and you can see comments at the bottom of those articles saying the eCPMs are WAY lower).

It seems just like apps wanting to get to the top of the charts (or those which have known profit margins - like casino or game apps with profitable IAB i.e. that type which in both cases it seems preys on the addiction weaknesses of people - note the emphasis on “whales” i.e. users who pay 90% of the IAB revenue !! - so there is some real odd stuff going on).

In a podcast there was mention of some asian games which fail to clothe the avatars - the idea being that it would “shame” the asian ethic to immediately try to clothe the character. These types of tactics PROBABLY work - but this is really the wild west frontier of advertising going on it seems (where anything goes and there will be lots of shady folks making money off that type of stuff).

In any case, one comment one hears from these blogs (many are iOS specific) - is that it may not even be worthwhile to do “House ads” promoting your own app (though there IS the need to promote own apps otherwise how do you get to a high DAU etc.) - but the point being that any type of self-advertising needs to be compared to the revenue potential of that space - i.e. you MAY earn more advertising the casino game because THEY are better able to monetize it.

So for example for your own game the lifetime revenue potential of a new user maybe $0.01 (if your app is so so) - however if a casino game is willing to pay $1 per install then you maybe better off promoting OTHER games.

This analysis however ignores that if you follow this strategy you may never grow your game to 2x or 4x - which may then have greater advertising potential. Unless of course it could be argued that the eventual DAU is going to depend on the game’s inherent playability or popularity or it’s meshing with the keywords people search for - and thus any short-term increase in new daily installs is not going to do much (except increase the total download figure - which counts for a bit in reputation I guess but doesn’t mean much in terms of revenue which is dependent on DAU).

However, some of the argument of these blogs is weakened (because they are assuming high AppWall revenue - from Revmob and Chartboost etc. for the iOS platform).

In reality, Revmob seems to have a reputation of having hyped initially and then gone down (the usual new startup hype strategy i.e. they are spending money to get visible) - and Revmob seems to have issues for Android (i.e. not enough inventory or the casino games not as profitable on Android ? or not as many of those games ?). Chartboost may be similar.

These outfits seem to now be reporting revenues similar to Leadbolt AppWall etc.

AppBrain seems to give $0.18 per install and Leadbolt AppWall HTML ads seem to give as low as $0.03 sometimes it seems (at least I’ve seen increments of that type) - Leadbolt doesn’t reveal total installs so we can’t calculate (compared to Leadbolt, AppBrain DOES reveal the total installs).

However, practically, the Leadbolt AppWall may be more attractive and seems to give slightly better revenue - though I cannot compare - because I am using the Leadbolt AppWall HTML ads as a replacement for Greystripe full screen interstitials - and the AppBrain AppWall appears only at the end-of-app (once every 3 days) as suggested by them OR if users click on the AppBrain banner ads (which are text “More Apps”).

HOWEVER, one thing I HAVE noticed is that by introducing Leadbolt AppWall HTML ads - while they are giving 2x the revenue of Greystripe (which was a pathetic $0.8 eCPM) - a downside is that it has REDUCED revenue from the AppBrain AppWall (at end-of-day once every 3 days).

Now that could be seasonal variation - OR it could be that if you overpresent one type of ad you are going to see it REDUCE user interest in more ads.

Currently I am showing the Leadbolt AppWall HTML ads every 3 minutes or so - the Greystripe full screen ads were being shown similarly - so I just replaced that.

BUT I wonder if a better strategy maybe to present the full screen ads either only ONCE - or at most TWO times per session (WHILE also adhering to the 3 minute between ads at least limit).

This way the user will not get jaded - and may still have some strength to click on the AppBrain ad at the end-of-app (once every 3 days).

Note however if your DAU is 50% new installs - then these 50% WILL see the AppBrain ad - so while it is “once every 3 days” - for many of your daily users it WILL show that day.
Only the recurring users may see it less often.

So that is another thing one could do with the Leadbolt AppWall HTML ads.

Strategies for presenting full screen interstitials

Another alternative is (if you are going to show AppWall twice) - is to show Leadbolt AppWall one time and another ad network’s AppWall the second time - this way there will be some variety.

Another alternative is whether to place the AppWall presentations early on - i.e. space the first two presentations by much LESS than the 3 minutes mentioned above.

The (counterintuitive) idea there being similar for the reasons AppWalls are presented early on:

  • that since 50% or more of your users may uninstall the app immediately, the early presentation of the AppWall is a desperate attempt to monetize these users - by this same argument, perhaps presentation of two different types of AppWalls early on may capture MORE of these “about-to-leave” users

This strategy WOULD then suggest that if you are going to present AppWall early on - then you should perhaps REWARD your longer-playing users by NOT presenting AppWalls etc. after the first 2 presentations.

Another longer-term strategy maybe to reward longer-playing users by steadily reducing the ad presentation/AppWall presentation on consecutive days - one strategy (which seems to be employed by the big app publishers) is to award “coins” (for example PocketChange etc. is one and I suppose one could implement an app-specific counting system). Can add the strategy some app developers employ (like Talking Tom Cat 2 etc.) i.e. award coins for use on consecutive days.

  • this may help engagement

  • make long-term users feel good about the game/app

  • once coins reach 100 coins etc. may reward user by removing banner ads (or some of the low paying ad varieties) - or award some level etc.

Anyway … just some comments …

Another strategy maybe to show AppWall to your NEW users.

And since the presumption is (this could be checked by running Leadbolt AppWall with different URLs for first day of use, second day of use - or even for first showing for new user, second display … and same for second day of use). Just first day and second day may give reasonable stats to decide what to do.

For new users maybe show:

  • AppWalls only

since new users will have 40-60% uninstall your app anyway.
And on end-of-app to show the appwall again.

For returning users (i.e. install date is a day old etc.) - though I guess one COULD count that by restarts of the app (onResume()):

  • show full screen ads (not AppWall) - like Greystripe which pay per impression (but eCPM is pathetic i.e. $0.8)
  • at end of app - show AppWall - like Leadbolt or AppBrain

Speaking of ‘whales’ … there was a comment at the conference about one women who spent $35k in a year on a single game. Apparently she liked little animals and had plenty of spare cash…

I was watching ad income now and then and I can definetly tell you, that over the last year, at least admob suffers to get a good eCPM. is it dead? no it is not, but remember, that the market (and therefore the competition) is growing too many publishers and too less advertisers. … and too much click-fraud. Advertisers want to see results just as the devs want to see eCPM. There are so many factors involved.

IAP is surely a nice thing, IF done right. There are many good examples out there, where IAP has generated a better income than other monetization models. So, if someone is willed to put more effort into IAP than in actuall development (or can outsource), that’s the way to go but it will not work for any game - the game has to be built to work with IAP.

CPC is still the way to go for ppl who do not want (or being able to) put that much effort into monetization. It’s a quick and easy way to make money. In relation to the needed effort of doing it, the ROI is significant even when there is less potential

As with all things - genetic linkage to predilection for alcoholism - there could be a similar thing for games and casino type apps.

The apps making money on the 90% of revenue from “whales” type of stuff are probably leveraging off those folks - or there really are a lot of folks with a lot of money (and they make up the bulk of that ?).

Though the same thing could be said about fast food - a lot of folks will compulsively eat that while the majority are careful.

The company “A thinking ape” apparently decided to limit ‘whales’ when they had some guys spending over $20,000 A DAY in their game. (" Keep this in mind – we limit whales. When we were getting guys that were spending $20,000 a day in our game.")

This was to make the gameplay more fair for everyone (as it was an online game where everyone competes against eachother, attacking eachother etc.) Pretty brave strategy which could potentially (and probably) mean more happy players and therefor a higher retention rate but could also have a pretty big impact on the revenue.

They seem to be doing OK even though limiting the ‘whales’ (“If you’re a top tier developer on the iPhone, you will make between $1 to $3 million dollars a month before Apple’s cut. We’re a top tier developer on the iPhone.”)

Here’s the full article/interview: 46 Cents in Revenue Per Daily Active User? Vancouver?s A Thinking Ape Has Seen It Before