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Nadav Ashkenazy talks ad monetization at Casual Connect Europe
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ironSource VP Nadav Ashkenazy spoke at the most recent Casual Connect Europe conference in London. Discussing everything from the benefits of rewarded video to supercharging game revenue while preserving and even improving user experience, we’ve extracted the highlights of his talk “The Ins and Outs of Ad Monetization” below.

 

Ad monetization requires more attention

“Although ad monetization has become a significant source of revenue, the level of sophistication and attention the industry puts towards optimizing ad monetization is far lower compared to IAPs. The industry for IAPs, when it comes to optimizing for revenue, has reached an ideal place in terms of packages, segmentation, pop ups, and more. Yet, for ad monetization, these are examples of things that have been left behind. With a little more attention, you will be able to achieve much more out of your ad monetization strategy.”

Ads from Day 1

“There is a great advantage in having ads implemented in your app from day one. Some publishers prefer to go live without ads, but educating your users to engage with rewarded videos from day one usually generates higher KPIs.”

The relationship between eCPMs and IPMs

“Today, most of the revenue in the industry is generated through installs. Usually, after the first impression a user sees of an an ad, the install rate is much higher than after the sixth impression. On average, out of 1000 first impressions you will have about 6 installs, while for 1000 sixth impressions, you will have only 3 installs. Every additional impression per user is incremental revenue, but it will bring your eCPM a little bit lower as there is less of an install rate for these impressions.”

“If you implement rewarded video at a climax in the game, for example when a player loses a life, your IPM will probably be lower due to the user’s willingness to engage with the ad. Even if they liked the ad, the chance of them deciding to install your game is lower compared to engagement in a cleaner environment, like on the main screen and in places where the user feels more comfortable to engage with different ads.”

The magic of rewarded video ads

“The eCPMs you get from monetizing rewarded video are usually two or three times (or even more) higher than you get with interstitial ads, banners ads, and native ads. On top of being a great source of revenue, they provide a great user experience.”

“If you are optimizing rewarded video in a sophisticated enough way, it should increase your retention, session length, and may even increase your IAP conversion. This is all under the assumption that the revenue model for most game developers is IAP.”

Rewarded video can convert non-paying users into paying users

“Rewarded videos are a way for non-paying users to enjoy your game in a way similar to paying users, who have higher retention and session length. Smart rewarded video implementation ensures that your non-paying users enjoy the premium goods of your game, which in turn will have them play your game for longer. This will help you convert non-paying users into paying users.”

Optimize and maximize rewarded ad placement

“You should always start by maximizing rewarded ads before moving to other options. Today, especially within the world of hyper-casual, we are seeing game developers produce games without optimizing them for rewarded video. Early on, they focus on earning revenue from interstitial, native, and banner ads that do not have the added benefits of rewarded video. Developers should maximize the potential of rewarded video in their applications or games. Once you’ve optimized your game for rewarded video, then you can add interstitial and banner ads in order to generate even more revenue from your game.”

Rewards should be dynamic and diverse

“Your reward has to be dynamic, in the sense that at level 1 offering 10 coins to the user is good enough, but if you keep the rewards the same all throughout your game, they won’t be as interesting as they were to the user at the beginning. Your rewards should grow in order for you to maintain the same level of engagement that you had when your user was at level 1.”

“Rewarded video should be a very diversified ad unit. That there should be four or five different placements in your game, as well as four or five different reward types in order to answer the needs of all of your users. Some users will engage to get an extra two lives, some will engage to get 10 coins, and others to get another spin. Therefore, as you offer more diverse rewards in order to increase user engagement, you will be able to generate more impressions from your total DAU.”

How to avoid cannibalization

“When you distinguish between the currency in your store and in rewarded videos, the risk of cannibalizing your IAP is much lower. Try and find the right number that generates the highest ARPPU and LTV. If you are in a place where you can add more sophistication to your strategy, consider using segmentation. If you are able to predict very early on in the game that some of your users won’t become paying users, target that group with a higher reward. Always focus on maximizing their ad LTV potential if there is no price and no risk of cannibalizing the IAP.”

Placement is key

“Your rewarded video traffic driver needs to be visible and users need to understand that they can engage with it whenever they want. The main screen is the best place to put a rewarded video traffic driver, as 100% of users end up on that screen. You can also use popups with the option to watch a video and double rewards. You will see that this can increase both awareness and engagement rate.”

“Putting the rewarded video traffic driver in a clean environment on the main screen as opposed to in the climax of the game, enables developers to generate much higher IPMs, and a therefore a much higher eCPM out of the impressions they are serving. For example, the end of a session is a great time to place rewarded videos. The user is relaxed, they have time, and they are willing to engage with an ad in order to double their coins.”

“Remember that the impressions that you’re serving need to serve both the user and the advertiser. The advertiser will only pay you if the user properly engages with the ad. If you crack engagement, you’ll generate much more revenue.”

It’s all about testing and data

“It’s all about testing and data-driven decisions. What works for one game won’t always work for another game. Testing and checking different placements, capping, and rewards, and finding which specific setup generates the highest ARPPU and LTV - is critical to ensure monetization success.”

Click here for the full deck from Nadav’s presentation.

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