How to Monetize Your Mobile Gaming App by@katesmarty

How to Monetize Your Mobile Gaming App

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Only 0.67% of users are willing to pay for a game the first day after download, and while this number grows to 1.10% by day 7, these are still modest numbers compared to the ability to monetize through advertising. The user gets his free game, and the advertiser gets a potential client by showing relevant ads to the user. Advertising is profitable for everyone because it's possible to combine different monetization models with in-app purchases or reward videos. In-app advertising isn't just about showing promotional videos or ads between game rounds, it also allows you to add other monetization.
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Kate Pavlova

Marketing Manager at SmartyAds, a global programmatic advertising company offering...

About @katesmarty
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Game development is a long-term and very high-cost business. It’s nice if there is a large studio that can allocate resources for a new project or hire analysts who can calculate how profitable the project will be and advise how to achieve high revenue. But if the developers don't have all that or it's a small indie studio and a promising but not very well-known startup, you have to wonder how the game project will pay off.

Of course, the game can be traditionally put on Steam or Epic Games, but as practice shows, if the project is not very popular, you will not earn very much. Most likely the profit will be from $8000 to $13000 a year. It's not bad as a passive income for one game, but it is not suitable for studios that need to develop their projects.

That's why many developers choose the opportunity to create game apps with free downloads and advertising support. Together with our Enterprise team, we are actively following the game industry market and its connection with the advertising market. We are ready to share our experience and tell you which ways of monetizing apps with advertising can be the most profitable.

Why use monetization with advertising?

Everyone loves free stuff

Many developers use paid elements in games, from in-app purchases to extended versions of games. But according to a study on Paying User and Rolling Retention Rate, only 0.67% of users are willing to pay for a game the first day after download, and while this number grows to 1.10% by day 7, these are still pretty modest numbers compared to the ability to monetize through advertising. That's why many developers are switching to this type of monetization.

Advertising is profitable for everyone

Not every user is willing and able to pay for the app. Many still think that spending money on pixels is stupid or fundamentally spending time only on free-to-play games. However, if a free-to-play game has advertising, the user is guaranteed to watch it, and everyone benefits from this. The developer can get a stable income from the application and invest in new projects or continue developing existing ones, the user gets his free game, and the advertiser gets a potential client by showing relevant ads to the user.

It's possible to combine different monetization models

In-app advertising isn't just about showing promotional videos or ads between game rounds. It also allows you to add other monetization models. For example, in-app purchases or reward videos. You can combine these models and use what is known as a hybrid monetization model, which has become increasingly popular over time.

Case of is a Chinese mobile game development company. Back in 2016, they had several apps with a total number of daily active users of about two million. However, only a small part of that audience was buying something from the games. Back then, the main source of income for their apps was advertising. added cross-page ads, and static banners, and created a strategy that combined ads with in-app purchases.

In the summer of 2016, they had the ability to create ads with rewards. Despite concerns about declining in-app purchase revenue, added the feature to their games. After that, for one game, average revenue per user increased by 40%, in-app purchase revenue rose by 18%, and session duration expanded by 20%.

Which advertising format should I choose?

Ad platforms usually offer a variety of different options for both ad options and performance. One thing may work for some apps and another may work completely differently for others. As with any business, it's all very individual here. That's why we suggest that you take a look at the different ad formats so that you can choose what exactly you need for yourself.

Banners that are many years old, but are still alive and being well

Probably everyone is familiar with banner format advertising: usually a rectangular picture with information about what they want to advertise to the user. Banner ads for gaming applications are not much different from those for websites or roadside billboards.

How does it work?

Banner ads are very easy to add to an app. It will take up a small section of the screen at the top or bottom, depending on the settings. These ads are shown continuously and do not interfere with the game. Banners change over time, showing different ads relevant to the user. The banners themselves can automatically adapt to the size of the screen of the device, occupying the entire width of the screen and having different heights depending on the device. This type of advertising is recommended for single-screen casual games.

Advantages of using:

  • Banner ads don't interrupt the gameplay, which means there's less chance that users will be annoyed with them;
  • You can set the place on the screen where it will be displayed and its exact size;
  • You can adjust the banner display frequency (however, it is not recommended to make the changeability of banners too fast, as it can affect the percentage of conversions, and the platform will be more difficult to select an advertiser for you);
  • It is possible to automatically adjust the ad frequency (which means that the system itself will adjust the ad frequency so that they bring higher revenue).

Disadvantages of using:

  • A user may accidentally click on a banner with a link and go to an ad he didn't want to see. To avoid this, think carefully about where to place the banner (away from the main gameplay);
  • This format of advertising shows less profitability compared to others because it triggers the effect of "banner blindness".

Interactive cross-page ads

This type of advertising covers the entire screen. Such ads may be in the form of videos or pictures. The user can close the ad.

How does it work?

Interactive cross-page ads are easy to add to the app. They do not affect the gameplay because they unfold to the full screen, hiding the gameplay. This option is suitable for games where there are breaks between levels or changes in locations.

Advantages of using:

  • You can set up pre-loaded ads so that they hit the cache in time and are ready to show when the user reaches the right moment;
  • You can set the inter-page ads to show frequently for a certain amount of time. When setting it up, make sure that the ads are not shown too often, as this can irritate users;
  • The price per thousand impressions is noticeably higher than for banner ads.

Disadvantages of using:

  • You need to test the optimal ad display frequency so that users stay loyal and don't get annoyed by the game;
  • The impressions frequency is lower than that of banner ads.

Native ads

Native ads are adapted to the content design of your game. It can be a video, an image, or text with an advertisement.

How does it work?

These ads are more complicated to customize than the first two types because you need to choose settings for the main ad color, text font, text color, etc. We recommend adding it to game content, menus, or the loading screen to avoid annoying the user and confusing ad integrations with gameplay elements. However, due to the fact that this type of ad is not immediately read by users as advertising, such ads can be very profitable in the long run.

Benefits of using:

  • With a clean game screen with no banners or other third-party elements, the game will visually remain consistent with its style;

  • Does not interrupt or slow down the gameplay, and therefore less annoying to users;

  • Ads will always be highlighted with the ad marking.

    Disadvantages of using:

  • Requires careful customization of content so it doesn't stand out from the main design.

Reward Ads

These are ads that the user can interact with to get some bonus in the game: in-game currency, lives, resources to upgrade weapons or characters, etc.

Game app developers love this monetization model because it increases player engagement, and according to recent statistics from ironSource, it also motivates players to make in-app purchases six times more often. And 76% of mobile gamers in the U.S. prefer video ads with rewards over banner ads.

How does it work?

It's easy to add to the app. You just need to establish what exactly the users can get when they view the ad. It's up to the user to decide whether to interact with the ad or not.

Benefits of use:

  • Increases player engagement by allowing rewards;

  • Can set up pre-loading so the user doesn't have to wait;

  • Can motivate purchases (if you give a portion of a reward that the player can get for a fee, it brings them closer to buying the same resource in the app itself);

  • Gives freedom of choice to the player, which means the level of annoyance from advertising is reduced.

Disadvantages of using:

  • More difficult to set up than banner or cross-page ads;
  • The number of ad impressions may be lower due to the fact that players are given the choice to "not watch ads".

Combine Ad Formats

All of the ad formats we've talked about in this article can be combined. For example, many developers combine banner and cross-page ads or reward ads with native ads. It all depends on what kind of game you have and what ad format is best suited to monetize while not reducing (ideally even increasing) user engagement with the game. But it can only be understood by testing different ad formats and their combinations.

How to simplify monetization through advertising?

Usually, to monetize an app through advertising, developers turn to software platforms that provide such services. However, if we are talking about a company that has more than one app or game and all of them need monetization, the best solution is to get your own programmatic advertising platform.

Developing such a platform from scratch costs a lot of both monetary and human resources, so many developers turn to white-label SSP. These are off-the-shelf supply-side programmatic platforms that can be easily customized to your brand. Such a platform will allow you to create advertising platforms from your applications in one space.

Benefits of using a White-Label SSP:

  • It's an off-the-shelf product that you don't have to create from scratch;
  • Unlimited customization options, from interface colors to section layout;
  • No need to spend time finding a development and support team for the platform;
  • All advertising monetization options for all products are in one place.

Disadvantages of using White-Label SSP:

  • Standard platforms may not have all the features you need (but providers usually have different advanced product variations); That’s why it is better to opt for services that offer additional customizations.

In addition, some platforms, such as SmartyAds, provide their clients with support not only on the technical side but also help with inventory selection and settings for your app monetization solutions. This is a very good option if you don't have an in-house specialist with a similar profile.

Any doubts? That's good!

We know those game developers are often very sensitive to their "children" because games and game apps are the results of long and painstaking work. And we know that sometimes advertising can seem a kind of "desecration" of this work.

What if banners look ugly on the game screen? What if ads popping up between levels alienate players? What if there is something in the ads that contradicts the sense of the game?

All of these questions are logical, correct, and understandable. No one wants to mess up their product with bad advertising.

That's why before you run ads in an app, you should check out what the software platform you are going to choose has to offer. That is why it is better to use well-known and trusted platforms because they guarantee the quality of advertising and advertising platforms.


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