David is the general manager of developer business for vserv.mobi and heads mobile application developer partnerships across Southeast Asia. Vserv’s AppWrapper solution offers developers a simple one click app monetisation approach to the monetisation of apps. (Disclosure: Vserv was a sponsor of our Bandung Hackathon event last year.)
The world is getting app-ified. Apps are driving the mobile internet ecosystem forward and have emerged as one of the biggest forms of media, entertainment, and utility on mobile. As a result, it is important for developers to devise a successful monetization strategy while they continue spurring the innovation cycle.
Gartner forecasts that the mobile advertising industry in Asia Pacific will grow from $1.6 billion in 2011 to $6.9 billion in 2015, and this presents a massive opportunity for developers to maximize the revenue potential from their apps.
So with that in mind, here are four golden app monetization rules for app developers and publishers to consider:
Rule 1: Deciding the right ad placement strategy
It is essential for app developers to understand that the right combination of ad placement and ad format will be critical in creating a successful loyal user base. The key is to ensure that ads do not impact the user experience of the app. Imagine the app as your favorite magazine. The most impactful spaces in terms of noticeability and maximum revenue generation are the first and last pages, so why not replicate the same tactic with your app? Hence, launch and exit ads are extremely effective, conspicuous, and will yield a higher income as advertisers are willing to pay a premium for it. In addition, interstitial ads which are viewed between game levels or any natural break in the app experience tend to be more fruitful.
Rule 2: Overcoming the billing hurdle
Unlike developed markets, emerging markets like much of Asia have unique challenges. While mobile penetration is more than 100 percent across countries in South East Asia (according to BMI, Q2 2012 and PwC Analysis), credit card penetration is only in single digits. This low credit card penetration accompanied by low GDP per capita means that in-app purchase via OEM app stores would not be a viable monetization model in emerging markets. Users in these markets just do not have the billing mechanism to pay for apps. To overcome this fundamental challenge of enabling users to transact for apps in a hassle free manner, it’s imperative that developers collaborate with mobile telcos and plug into their billing so that users can purchase from the app store utilizing their prepaid balance or postpaid bill.
Rule 3: Going beyond traditional monetization models
App developers need to have an inclusive monetization model for a successful app strategy – one that targets users which are willing to pay for apps (to upgrade features, remove ads, etc) and also consider users (primarily from emerging markets) who prefer free app downloads. A blend of these two will give app developers the best results in terms of reach and revenues. The ideal model is to allow users to download for free – yes, freemium – and start monetizing them via ads. At the same time, allow users who want a premium experience to upgrade within the free app itself.
In this manner the developer gets access to a wide number of users for the app who get monetized via ads and also makes additional revenue from the users who will pay to upgrade.
Rule 4 : Choosing the right ad mediation platform
App developers need to be cognizant of the fact that apps do not possess the same level of flexibility as websites. Once an app is downloaded, the developer is at the users’ mercy for app updates. So if a developer just puts one SDK in their app and it does not monetize well, he is stuck with it. As a result, it is advisable for developers to use a server-side ad mediation platform that gives them choice and control. This platform should also give them an option to add or edit ad networks and generate revenue from multiple ad networks of their preference. At the same time, they need to also get an option to get back fill from a wide range of other ad networks to ensure a high fill rate without the hassle of setting up each individually. Developers should also be able to run cross promotional house ads as it will help them ramp up the next app quickly, while delivering powerful eCPM optimization.
These four golden rules should put you on the path to higher revenues from your apps.