retention

Mobile advertising is not only a good way to make your Business grow, is also a great way to increase User Engagement and Retention in the App.

This article originally appeared in Italian in MD-Marketing Digitale Blog.

When it comes to User Experience for a mobile product, we’re not referring only to application design and UI (User Interface), but also to the experience as a whole: from searching to the graphics and textual presentation on the App Store, from downloading to all aspects that can stimulate the user to come back to the App in the future.

Advertising has taken a role of increasing importance in this matter.

How?

Despite freemium model being the most popular and profitable (TOP 100 grossing Apps in the Overall category in US are all resorted to this business model, AppAnnie data), allowing an optional purchase of additional content and extra features, the use of advertising is still widely used and growing.

As a matter of fact, advertising is often considered to be intrusive, and it has become “invisible” to users and therefore ineffective. Furthermore, the decline in ad profitability (lower and lower eCPM) has made it less attractive.

The market has found a compromise solution by combining the different possibilities of entertainment offered by the advertising with new forms of remuneration, convenient for both developers and users. The growth of video and the subsequent spread of a new business model, Rewarded Ads, had allowed a form of advertising that users themselves are willing to look at to get a “prize” in exchange, such as an extra life in the game or a special content in the App.

This solution is certainly a win-win, since it is able to maintain high engagement, and, if the right mix of content and user’s interest is created, it increases retention and LTV (Life Time Value), while ensuring higher eCPM.

This is especially true for mobile games, where it has become the standard business model so far. But even if we think about other social apps and services, such as Spotify, we realize that we’re willing to see advertising to get the service for free.

We could say rewarded ads in Apps are not different from the ads in free press newspapers, radio, TV, big web sites, adding the “NO ADS” option for those users who are willing to pay.

However, traditional advertising is becoming invisible, and it’s a reality for the majority of Ads on web pages, where the ad contents have a very low CTR and the quality of users is not always on target with desired one.

The mobile instead still leads to quality conversion and interest in the messages.

Mobile still manages to convey advertising messages in a way that generates Added Value.

According to a research conducted by Fyber, rewarded advertising can lead to a net increase in the ROI especially if delivered by mobile games. App developers can be reassured about the most common myths related to advertising:

1. Will rewarded advertising cannibalize my IAP (In App Purchases)? No. The research has shown that when used in a significant contextual manner, it not only can be an incentive for spending, but may even lead to an increase of 100% of IAP. Users who interact with the Ad tend to remain longer active in the game. In particular, precisely the segment that had proven to be the least spending has responded better when exposed to the Ad content, spending between 40% and 100% more after interacting with the Ad (Source: Fyber’s homes study on “Complementing IAP rewarded with ads”);
2. Are users who I acquire through rewarded advertising in target? If the Ad targeting is properly optimized and it’s contextually relevant for users, it will be successful. A good result could be around 60% of conversion to the desired action, and a ROI around 7-10%;
3. Do the Ads reduce user engagement? No. The users who interact with the rewarded ads may have an increase in the user session time. The players that obtained a prize in the App are more engaged and active. An international Company leader in the mobile games and social games market has discovered that users who have watched the video ad at least once, were actually two and a half times more likely to stay active in the game during the following months;

4. Showing a lot of advertisements will make me earn much more. No. Spamming users does not keep them engaged. The mobile video advertising is driven by performance. In determining the right approach to monetization, it is essential to add elements of scarcity and rarity and show the most relevant ads to users at the right time, to make sure that you are hitting the most important KPI. For example, Next Games has been able to double the average eCPM of $ 10 to $ 20 for “Compass Point West” showing fewer ads. They also reached 60% of engagement with their ads, with an increase in average viewing to 4-5 videos a day and about 10% of users leaving a positive review on App Store by calling specifically the excellent work done with the rewarded video. Sometimes, less can be more;
5. My games may not be the right channel for Brand Advertising. To dispel this myth, MediaBrix has designed its offering to ensure that the brand becomes an integral part of the user experience and a plus in the application. They offer brand Ads more or less in context and in the right moments within the flow stream. And the results, by their statistics, are surprising, achieving an average VCR (Video Conversion Rate) higher than 30%, an 80% increase in brand awareness and a 4% increase in engagement rate.

The right synergies are possible, and they can bring mutually profitable relationships. If the brand is willing to create a mutual exchange relationship with the chosen mobile channel, having full respect for user experience and trying to add value, it is then that advertising can truly achieve its purpose: connecting through a shared message.

What is your relationship with the advertising in your favorite applications and in our games? What would you prefer to get or what would you change in the advertising approach? Write it in the comments!

Thank you!