All developers would probably like to attract more "whales"--consumers who tend to spend a lot of money inside a mobile game--or turn existing users into a whale, but the ad networks are trying to show them that there are plenty of other fish in the sea.
During the Game Developer Conference (GDC) in San Francisco last week, for example, Tapjoy announced the general availability of nGen, a platform to deliver ads in a way the company says will increase the chances of monetizing a bigger share of a game's installed base. According to Peter Dille, Tapjoy's CMO, nGen combines a variety of native ads and traditional formats like interstitials with an analytic tool that can measure user behavior and provide contextual ads at key moments in gameplay and target specific groups.
In some cases, for example, developers may have been using ad networks to promote in-app purchases (IAPs) to their "whales," even though they were already getting substantial revenue from those users, Dille said.
"They don't want to get in the way of those folks. They'd rather continue to make their money," he explained. "This is a way to go after only those who are not IAP participants."
Seize the moment
Examples of moments where contextual targeting and personalization may be useful, Dille said, include when users achieve a "level complete," in a mobile game, when a user sees a "game over" message, or when a developer offers a "congrats on your high score" message.
"It's become obvious that reward ad units drive deep engagement," Dille said, but developers need more tools to deliver them. Tapjoy's nGen also will provide a messaging system that will allow developers to contact users at critical points. "It will take you right into the IAP purchase flow, so that if they abandon [a purchase], you can find out what happened," he said. In Tapjoy's experience, it's possible to recover 10 percent of abandoned IAPs this way.
Another way to tackle monetization is to make sure that if you spend money acquiring mobile users, they're going to be engaged from the get-go. That's the philosophy behind AppEngage, a rival ad network run by Mountain View, Calif.-based Midverse Studios and founded by former Tapjoy executives. In some respects, AppEngage is focusing less on moments within a mobile game or app experience and instead offers incremental rewards based on user actions. This could include how long they've spent with a game or app, whether they're taken the time to watch a video tutorial and so on.
Developers earn incremental ad revenues through the AppEngage Network.
According to Jim Rainey, vice president of growth at Midverse Studios, this approach means that developers can stop looking at metrics like cost-per-install (CPI) to get new users and instead focus on the cost of achieving some quality level of engagement with a user.
"Volume helps you move up in the charts, but the quality of the users you get that way could be as low as 10 percent of their lifetime value compared to [those who come to an app] organically," he said. "The reasons there are straightforward. When users are installing an app in order to get virtual currency, they'll do the install, get the currency and then uninstall. We're incentivizing the deeper action instead of the install."
In order to prove this works, Midverse is offering all Android developers who implement the AppEngage Network SDK up to 100,000 installs for free for a limited time. Rainey said this kind of offer is necessary to shift the thinking among developers about how ad networks should operate.
"The word incentivized tends to have a lot of legacy baggage attached to it, because people think you're implicitly talking about incentivized installs," he said. "We're trying to re-educate the market to show incentivized doesn't have to be low quality."
Testing different ad points
Developers are beginning to test the waters. Concrete Software, a studio based in Minneapolis, has been trying Tapjoy's nGen for its PBA Bowling Challenge. Keith Pichelman, Concrete's CEO, said the value so far is being able to offer ads in places that were normally out of bounds unless you wanted to scare users away.
Concrete Software has been testing Tapjoy's nGen for its PBA Bowling Challenge.
"If someone loses a match, we can give them a custom message that says something like, 'Get revenge, try an offer to get the Ultimate bowling ball for next time!' We weren't able to have ads that integrated into the game like we can now," he said. "On top of that, the ad settings are configurable, so we can change the wording, offer, or even turn the points on and off without an update. This is huge for testing different ad points."
Dille said even as developers try to maximize revenue, the level of engagement is a key driver no matter what ad network you use. "That's part of the organic opportunity that the messaging system in nGen opens up. We think we'll see a lot of developers try to get folks talking through the app," he said. "The focus on quality is something we hear time and again."