As programmatic mediation enters its heyday, how will the mobile ad ecosystem evolve? Already, advertisers and developers alike are embracing user-centric ad models, along with the technology to make delivery more efficient. Tapjoy spoke with Facebook Audience Network’s Vijay Balan to get his take.

 

What We Learned:

 

Hi, Vijay! Could you please introduce yourself and describe your role within Facebook?

I’m Head of Publisher Solutions Partnerships at Facebook Audience Network. My role is two-fold – I lead the team that brings new publishers onto Audience Network. I’m also responsible for all ad tech partnerships globally for Facebook which includes our bidding partnerships.

 

Given your experience with publishers in the mobile advertising ecosystem, what key shifts and evolutions have you witnessed over the past 3-5 years?

Two of the greatest shifts I’ve witnessed have been with the skyrocketing growth of mobile gaming and the advent of bidding.

On the gaming front, to say that the gaming market is growing would be an understatement. According to a report from Newzoo, there are now more than 2.5 billion gamers across the world with most of them playing on their mobile devices. This enormous player base paired with the highly-engaging nature of games makes it an incredibly vibrant space for mobile advertising. We’ve also seen some of the most immersive and innovative ad formats borne out of this category such as rewarded video and playables.

Further, mobile game players now reflect the typical consumer (50/50 gender, mid-late 30s) more than any other app category, according to Newzoo’s March 2019 study. This means gaming apps are now a valuable channel for global brands to reach highly-coveted audiences which opens up more growth and monetization opportunities as we look to 2020.

Bidding — where we’ve seen game publishers among the earliest adopters — is another industry shift that’s come to the forefront in the last couple years. Looking at bidding, several years ago we saw the advent of header bidding in web and its rise to a dominant position in how web publishers monetize. Many app publishers noticed the success of web header bidding and wanted the same efficiency and price competitiveness brought to the app world. Over the last couple years, many businesses, including Audience Network, have been working together to make app bidding possible — a much more complex undertaking in app than in web. 2019 was the year we really saw app bidding start to take off as a reality for app publishers — a trend that I expect will continue to accelerate this year.

 

Why is brand safety such a huge concern for advertisers and publishers alike today? How can developers and publishers protect their mobile properties from low-quality ads?

Safeguarding brand reputation is a priority for many advertisers and publishers alike in the digital advertising ecosystem. From an ad network perspective, this means having both high-quality advertisers and high-quality publishers participating to drive a positive experience for people. For us at Audience Network, this starts with having policies that hold publishers and advertisers accountable for delivering experiences that align with our standards. At the same time, we know that not all businesses are the same and some may want additional brand safety controls. Recently, Facebook announced a number of brand safety controls for advertisers to help address this need. On the publisher side, we offer controls that help publishers decide what types of ads they want to appear on their apps and sites. In both cases, giving businesses the power to create a brand-safe ad experience that suits their unique business needs is essential.

 

Programmatic mediation has become increasingly popular over the last several years. How has this innovation shifted the landscape, and why is it a boon for publishers and developers?

Waterfalls were the de facto set up for ad monetization for the past decade and most in the industry have recognized their inefficiency. Under waterfall mediation, when an ad impression becomes available, a publisher’s ad server calls demand sources one by one, in order of average historic price, not what those demand sources are willing to pay for that particular impression at that moment. This creates a potential loss of revenue. In some cases, the demand source willing to pay the most for a particular impression never gets called because it is further down in the chain. This means the waterfall is problematic for buyers and sellers. Publishers don’t know when they’re leaving money on the table. And advertisers may not get a fair shot at valuable inventory, resulting in skewed average historical prices.

Bidding — or programmatic mediation — on the other hand, allows all demand sources to bid for each impression in real-time, which significantly increases competition for publishers’ inventory and gives demand sources equal access to the impressions that matter for their advertisers. This means the source willing to pay the highest price has a chance to win every time. For publishers, this translates into more ad revenue — in fact, we’ve seen up to 30% increase in ARPDAU from publishers that use bidding vs. waterfall. Further, bidding removes the operational burden of maintaining complex waterfalls which frees up valuable time to spend on more impactful work to grow their businesses.

 

In your view, what ad formats offer the most value for publishers and developers as we move into 2020?

It’s important to remember that ad monetization isn’t a one-size-fits-all approach. Format effectiveness is highly dependent on the context, audience and the type of monetization model that your business is using. This is why we recommend a test and iterate approach for publishers to learn what format and entry points work best for them.

That said, I do think that the engaging nature of new formats like rewarded video and playables have proven themselves to be particularly effective for game publishers. In fact, recent research by Walnut Unlimited commissioned by Facebook found that, among those surveyed, 79% of developers that use a mix of ads and in-app purchases said rewarded video is their most effective format. While 33% of publishers said playable ads, which are growing in popularity, are already their most successful format.

 

With the advent of rewarded video and other impactful opt-in formats, would you say that mobile advertising is becoming more user-centric? Why is putting people first the best strategy for advertisers, developers, and publishers?

There’s definitely been a movement toward ads becoming more people-centric with formats like rewarded video and playables leading the charge. We hear regularly from publishers that prioritizing the user experience is one of the most important things they do to attract and retain a loyal audience while building a sustainable business. In fact, in recent research, 57% of game developers surveyed agreed that ads can indeed improve the user experience and aid retention.

Our philosophy on delivering people-first ad experiences includes three key tenets central to our approach:

  1. Ads can actually improve overall engagement with your app
  2. Ads should be relevant to the people who see them
  3. The ad experience must be respectful of a person’s behaviors and intentions.

This all boils down to the fact that when your monetization strategy focuses first on creating a great experience for people, everyone wins.

 

Looking ahead, which emerging mobile trends are you most excited about? What innovations are on the horizon, and how can advertisers, developers, and publishers position themselves to take advantage of them?

App bidding is the trend I am most excited about as we look ahead to 2020. I see it as an inflection point for the app ad ecosystem where the long-promised efficiencies of programmatic advertising are finally coming to fruition to the benefit of mobile publishers, advertisers, and ultimately to people. In 2019, we witnessed the ecosystem begin its shift in this direction as more publishers, mediation platforms, and demand sources tested and invested in bidding. With this foundation, I see 2020 as a watershed moment as bidding becomes the norm for publishers.

Tapjoy would like to thank Vijay Balan for taking the time to join us. To read more about the evolution of programmatic mediation and why the waterfall falls short, see our blog “It’s Time For Programmatic Mediation To Revolutionize The Mobile Ad Ecosystem.”

It’s easy to forget that mobile advertising is still a relatively young industry when it’s grown so much in the last few years. The mobile market is evolving quickly, and smart advertisers are constantly finding creative new ways to engage with consumers. To help ensure we’re always at the forefront of the latest innovations in mobile ads, we created the Mobile Champions series, which was designed to gather insight from industry leaders.

Over the past year, we’ve talked to over a dozen pros about mobile gaming, advertising, user acquisition, and more. From VPs and CEOs to research and monetization experts, their varied points of view and backgrounds have provided a plethora of useful information about the present and future of mobile advertising. It was hard to narrow down a year’s worth of valuable conversations, but we’ve found four key takeaways from 2019’s Mobile Champions series.

What we learned:

Data is King

One of the biggest changes in mobile advertising is the increasingly important role that data plays. As Tom Tran, Senior Sales Engineer at Adjust, told us, today’s marketers put data first, choosing to look at the numbers before relying on gut instinct.

Marketers today have an unquenchable thirst for data to drive their decisions. No longer do the most sophisticated marketers rely on their gut instinct and look at bottom-line numbers such as clicks or total installs to analyze their performance. The best and most successful marketers I see tend to have a need to back all results with data.
Tom Tran

Tom Tran

Senior Sales Engineer

Adjust

This sentiment was reiterated by Alessandra Sales, VP of Growth at IPSY. When asked about best practices for advertisers, she highlighted the importance of a robust data infrastructure. In IPSY’s case, making full use of data means rigorous A/B testing, largely on Facebook and Instagram; other companies are focused on building automated tools to help collect this all-important data.

Make sure that you have a robust data infrastructure to make the right decisions.
Alessandra Sales

Alessandra Sales

VP of Growth

Ipsy

As the COO and co-founder of Singular, Susan Kuo has established an entire company focused on collecting, analyzing, and simplifying marketing data. At the time that Singular started, no one had created solutions to support standardized data governance. Her company arose to fill that need. According to Kuo, “over 50% of the top 100 global app publishers use Singular,” showing the need for — and importance of — standardized data analysis.

No one in the industry was taking ownership to connect marketing channels and attribution solutions in a way that supported standardized data governance.
Susan Kuo

Susan Kuo

COO & Co-founder

Singular

The ways in which marketers use data have also changed dramatically in the age of big data. “The data collection and analytics process has absolutely evolved,” Hothead Games’ Director of Research and Monetization Kenneth Wong revealed.

At first, data was primarily used to improve UA and understand the attribution cycle. Now we need it to get the CPI as low as possible, calculate engagement rates, measure the payback window, optimize ad placements, and more. If nothing else, game developers need to get sophisticated about data because the competition will overwhelm them otherwise.
Kenneth Wong

Kenneth Wong

Director of Research & Monetization

Hothead Games

Mobile Engagement is a Long Game

When it comes to free-to-play, ad-supported mobile games, keeping players around is key to financial success. Sure, a new hit might rank on app store charts at launch, but it can still fizzle out rather quickly without the right support. That’s why mobile developers should be focused on strategies that will continuously entertain players, fostering long-term engagement.

As Director of UA Marketing at mobile game studio FoxNext, Vivek Gorotra knows this well. His team focuses on the long game when it comes to retention. In his case, that means keeping a close eye on retention and regularity stats, as well as “constantly testing different partners, buying models, optimization strategies, and creative formats to figure out what is going to get us the best bang for our buck.”

We want players to stick around in the game for years together; so our focus is always on the long-term when it comes to making decisions regarding growth and engagement.
Vivek Gorotra

Vivek Gorotra

Director of UA Marketing

FoxNext

For Gabrielle Heyman, Head of Global Ad Sales at mobile giant Zynga, this kind of long-term retention comes from keeping players at the core of everything they do. “Our mission is to connect the world through the power of play,” she said. To align with this mission, her team puts “play” front-and-center, even in their mobile ad experiences.

Our best practices focus on connection and engagement; most of our features, as well as many of our ad experiences, revolve around that.
Gabrielle Heyman

Gabrielle Heyman

Head of Global Ad Sales

Zynga

Mobile game developer Big Blue Bubble is a master of player retention; one of its most popular apps has been going strong for seven years, an eon in the mobile games industry. Senior VP Bryan Davis thinks it all comes down to fun. As a result, Big Blue Bubble is constantly revisiting the user experience, “look[ing] at each update as an opportunity to optimize and improve the experience for new and existing players.”

Retention is a byproduct of making sure our players are having fun...the ‘fun factor’ is really at the core of our games.
Bryan Davis

Bryan Davis

Senior VP

Big Blue Bubble

As a co-founder of legendary UK miniatures company Games Workshop and Director at Sumo Group, Ian Livingstone knows a thing or two about games. He’s seen decades of evolution in gaming, from the pen-and-paper adventures of old-school Dungeons & Dragons to the digital wonders of today.

It’s fascinating that we can play games for free and yet creators can still earn revenue from their games…However, free-to-play does not mean free-of-value. If you do not give players value, they will leave, even if the game is free.
Ian Livingstone

Ian Livingston

Director

Sumo Group PLC

The Future is Female

Corporate leadership has historically been male-dominated. This has always been especially true in the technology sector and, by extension, the ad tech industry. But as several of our mobile champions have highlighted, those demographics are shifting. Just ask Susan Borst, VP of Mobile at the Interactive Advertising Bureau (IAB). As she explained, “For the IAB Game Committee that I’ve led for the past five years or so, the committee leadership has, in fact, been dominated by women in senior leadership positions.”  Her advice to women in the industry? Be confident — but be yourself.

When I think back to the most effective women I’ve had the pleasure to work with, one perhaps surprising trait comes to mind which is that they are all real. By this, I mean, they lead the way while showing their true selves… Being real inspires trust and with trust, comes results and respect.
Susan Borst

Susan Borst

VP of Mobile

Interactive Advertising Bureau (IAB)

Ngozi Ogbonna is the Senior Director of User Acquisition at Fairygodboss, which provides career connections and professional advice to an ever-growing network of women. According to Ogbonna, companies in the US are paying a lot more attention to gender equality these days, which is encouraging the shift. With conversations about gender parity and diversity “dominating the zeitgeist,” women are feeling more empowered in the workplace, and this is especially visible throughout the formerly male-dominated mobile industry.

We’re seeing the desire for meaningful diversity and inclusion initiatives across a myriad of industries and company sizes…There have been tons of independent studies confirming that diverse teams and organizations are more profitable and successful.
Ngozi Ogbonna

Ngozi Ogbonna

Senior Director of User Acquisition

Fairygodboss

Mobile Marketing Challenges Require Modern Solutions

As technology evolves at a breakneck pace, the rules of mobile marketing change with it. Best practices from five years ago likely wouldn’t make much of an impact today, and keeping up with it all can be dizzying. Leaders in the mobile space are making their own rules, and our Mobile Champions shared some creative solutions to modern marketing challenges.

For FoxNext, that means building a single intuitive platform that user acquisition pros can use to manage a variety of campaigns. As UA Tech Lead Dave Riggs explained, these platforms exist to help media buyers save time, allowing them to be more creative and strategic as a result.

We’re largely focused on saving media buyers’ time and enabling them to use energy on higher-level functions, e.g. creative and strategy… We tend to hire a lot more on the engineering and technical side because we believe much of UA optimization can be automated.
Dave Riggs

Dave Riggs

UA Tech Lead

FoxNext

Mobile fraud is a major issue for publishers and marketers, and one that Adjust’s Head of Fraud Andreas Naumann is working on every day. According to him, advertisers’ awareness of mobile fraud has risen dramatically in the last three years, but it still occurs at an alarming rate. And he should know — Adjust is a leader in fraud prevention.

The last evolution we have seen is the spoofing of installs and events. Fraudsters are exploiting the communication structure the ad tech world is based upon.
Andreas Naumann

Andreas Naumann

Head of Fraud

Adjust

“Our approach from the start has been to identify the most granular data point that allows us to identify a fraud scheme,” Naumann explained. “We utilize that data to make a deterministic decision that we can use to deny attribution of fraudulent installs or of legitimate installs to fraudulent sources.” According to Naumann, this cuts the cash flow to fraudsters without forcing advertisers to have to negotiate reimbursements, which is still a rare achievement in the anti-fraud space.

Though the industry is constantly changing, leaders like the ones featured in our series are constantly creating innovative new ways to connect, engage, and entertain. We’d like to thank all of our 2019 Mobile Champions for their invaluable insights into the wild world of mobile marketing. Stay tuned for more in 2020!

For more information about all things mobile advertising — or to start your own campaign — reach out to the experts at Tapjoy today.

In the competitive mobile game industry, licensing high-profile IP gives developers a serious edge. That’s why they increasingly partner with entertainment brands to create some of the world’s most popular (and profitable) gaming apps. Still, one particularly promising avenue remains untapped: partnerships with OTT streaming platforms. After all, developers have already seen tremendous success producing apps for shows like South Park, X-Files, and The Walking Dead. Each of these games is massively popular, and that’s before we look at recent hits like Game of Thrones: Conquest.

Many OTT originals now have a cult following. In July of 2019, Netflix subscribers flocked to their streaming devices to watch the third season of Stranger Things. At the same time, fans caught a glimpse of newly-announced licensed app tie-ins, including a Stranger Things 3 game and a standalone AR-inspired RPG, produced by a third-party studio. IP partnerships like these existed for decades, yet the popularity of OTT IP has the potential to elevate this strategy to new heights.

Today, more than ever, users are either consuming OTT content on mobile devices, or using their “second screens” while watching on a 10-foot UI. It’s clear that whatever content is being consumed, OTT viewers and mobile gamers are two market segments with a high degree of overlap. Both developers and streaming platforms stand to benefit enormously from this emerging opportunity.

 

OTT platform data could supercharge UA campaigns

Netflix has come a long way from its mail-order DVD days — today, it’s a digital powerhouse. In addition to its streaming capabilities, it now maintains an immense database of consumer information and viewing habits. These metrics are analyzed internally by machine learning algorithms to determine which content will hook and retain subscribers. In the context of an IP partnership, that data also creates opportunities for mobile game developers.

Most licensed mobile game projects such as Avengers or Star Wars still rely on IP, brand recognition, and traditional paid user acquisition (UA). If data sharing was included in these license agreements, these apps could be marketed directly to engaged audiences, reducing the need for paid UA. If both parties collaborate to ensure that consumer data privacy is upheld, data sharing could be a major competitive advantage.

 

In-app features could maximize cross-promotion

Imagine if the Frozen Free Fall game was revamped to enable users to log in with their Disney+ credentials. Players could get in-game bonuses as a reward for linking their accounts. Meanwhile, Disney could then share data and insights with the developer (in this case, Jam City), and vice versa. In such a partnership, app creators would gain access to viewing habits, while the OTT platforms would gain access to their mobile gaming habits. This exchange could unlock immense marketing potential and highlight promising licensing prospects.

Even if customers don’t link their profiles, OTT providers can look up the device IDs for users who register and watch content from smartphones. This grants access to shared metrics that can be used to calculate which cohorts frequently play mobile games, and paid marketing budgets can be adjusted accordingly.

Star Wars and Disney+

 

Mobile games could become a chess piece in the streaming wars

The “Streaming Wars” are now in full swing, as new and legacy entertainment companies vie for control over the future of TV. Mobile game partnerships have the potential to become a strategic advantage as the market consolidates.

Disney’s bid as a streaming service aggregator comes in the form of its Disney+ platform, which launched in November of 2019. The entertainment giant has bundled its own IP with ESPN Plus and ad-supported Hulu. In what is surely no coincidence, Apple launched Apple TV+ on the same timeline. HBO Max also plans to launch its beta in late 2019, which will feature content from a wide range of properties owned by AT&T and Warner Media.

How will games fit into the new bundling model of the OTT ecosystem? Gaming studios are already experimenting with mobile game deployment on OTT devices, specifically the Apple TV. Major titles like Crossy Road and EA’s Real Racing 3 are migrating to the tvOS ecosystem in an attempt to attract OTT viewers to play games. To navigate the tremendous amount of competition, streaming giants may consider leveraging mobile game partnerships as differentiators. These platforms each need to offer something different and exclusive — as media consumption becomes less fragmented, mobile games could be a viable option.

In 2018 alone, Netflix invested $12 billion in original programming. What if this investment extended to partnered IPs in the mobile game space? As the gaming and streaming demographics continue to merge, mobile games may soon be invited to the table.

[Streaming companies] absolutely need to have their own original or exclusive content. Leverage is how they’re going to drive people to a direct-to-consumer product. And when streaming companies offer something that consumers can’t get elsewhere, they increase leverage.

Kirby Grines

Founder

43Twenty

OTT IP is the next frontier for mobile game partnerships

Mobile game partnerships are an untapped opportunity in the OTT space, and a lucrative one at that. They combine the popularity and monetization potential of mobile games with the brand recognition and digital delivery capabilities of OTT original content. We are only just starting to see brands capitalize on these opportunities in 2019, but make no mistake — Stranger Things won’t be the last game based on streaming video content.

If you’re a mobile game developer looking to learn more about ad monetization or branded partnerships, the monetization experts at Tapjoy would love to hear from you. Get in touch and learn how Tapjoy helps mobile game developers maximize ad revenue using premium rewarded ad placements.

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Contrary to what many players expect, game design isn’t an entirely artistic endeavor — it’s also a science. In 2019, developers utilize data analytics to better understand players, while finding new ways of engaging and retaining them. Nowhere is this trend more clear than mobile gaming. In 2019, developers use exhaustive data sets to create data-driven game experiences that players will still enjoy as art and entertainment.

Tapjoy recently met with Kenneth Wong, director of research and monetization at Hothead Games, to discuss the trend of data-driven game development.

 

What We Learned:

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Hi, Kenneth! Thanks for chatting with us. Can you tell us a bit about Hothead Games and your role within the company?

Hothead Games has been around for about 13 years. It started life as a traditional video game studio, producing downloadable games on XBLA, PSN and Steam. I joined the team eight years ago, just as it was making the transition to mobile platforms. Since that time, I’ve worked in UA, monetization, game consultancy, and even UX.

Right now, I manage Hothead’s advertising revenue and market research. A big part of what I do is find gaps in the industry that could be prime business opportunities. If one of these gaps seems particularly promising, Hothead can develop a game for that specific audience.

 

How does your background in marketing and analytics help you in your role as Director of Research and Monetization?

Analytics is an essential component of what I do. In a mobile setting, that’s your tool for precisely understanding what users want so you can more effectively cater to them. How much time do they play? What sorts of games do they engage with? This research is vital because you’re only as good as what you know about your users.

 

How does Hothead balance the creative and marketing/monetization aspects of making mobile games?

There’s no single recipe for bringing these elements together. Hothead’s process is to give our designers and programmers as much information as possible to make the best decisions. On the product/creative side, we do theme testing, competitive research, and user research to inform the product team on the potential of certain themes and art styles. Once a game is in its infancy phase, we build prototypes and ask users what they think. Later on, we might conduct a soft launch and gain valuable qualitative feedback.

Once we have a game with which people will engage, we can spend more time focusing on monetization strategy that tailors to the game play and meta. The monetization model is highly driven by the type of game we are building.

 

What are some of the monetization challenges of modern mobile games?

Competition from other studios is our biggest challenge. Most new games have a very short lifecycle because the barrier to entry is so low. It’s a real challenge to be profitable in that kind of timeframe. The flip side of this problem is that mobile gaming has matured. Gaming’s most valuable players — those investing the most time and money — don’t jump off and find another game right away. The top 20 or 100 games on app storefronts don’t move around like they used to.

That’s why advertising has become so important to game developers. Advertising lets us directly profit from ad revenue during a short lifecycle. More importantly, ads enhance the viability of your game without the necessity of being a top-grossing IAP game.

 

What role does data play in mobile game development, and how has this evolved over the years?

The data collection and analytics process has absolutely evolved. At first, data was primarily used to improve UA and understand the attribution cycle. Now we need it to get the CPI as low as possible, calculate engagement rates, measure the payback window, optimize ad placements, and more. If nothing else, game developers need to get sophisticated about data because the competition will overwhelm them otherwise.

Ironically, privacy is also a driver of data technology. Since we need to be careful about personal information, we use identifiers that match different cohorts. And as you scale to serve broader player bases, machine learning comes into play to track and analyze everything. These evolutions aren’t about to slow down anytime soon.

 

What are some of the most important things you’ve learned about UA and monetization of mobile games in your time at Hothead?

I spent time thinking about why some of our projects fail and how they fail. The worst thing anybody can do in this industry is to believe they already hit their plateau. If you’re not trying to do better, the market will pass you by. Platforms and ad networks will introduce new guidelines and features, new types of ad formats will appear; it’s continually evolving. As a developer, you need to be ready to deal with the new changes.

 

What mobile gaming trends excite you?

On the game design front, the rise of hyper-casual is fascinating. It’s a great model that frees studios to be creative and experiment instead of releasing the same type of game over and over. If you look at hyper-casual releases, you’ll see all kinds of games and genres that are doing well. You never know what the next big hit will be, and that’s very exciting.

On the marketing front, the evolution of advertising monetization models is an important trend. If handled correctly, you can have successful ad-monetized games that thrive alongside IAP-driven products.

 

Looking ahead, what can we expect from the future of mobile games, and how does analysis and data collection affect that forecast?

Advertising and machine learning will combine to power the next phase of analytics and data collection. In turn, the insights we gain are going to drive in-game personalization to the point that every user will have a unique game experience. Every player can experience something different, and watching that develop will be fascinating.

Stay tuned for Part 2 of our discussion with Kenneth Wong, where we’ll take a closer look at market research in game design. For more insights from our Mobile Champion developers, check out our interview with Bryan Davis, Senior VP of Big Blue Bubble.

In today’s increasingly crowded mobile gaming space, players are often confounded by choice. Most are content to cycle through the top-ten lists, seldom exploring beyond. In fact, 80-90 percent of mobile apps are abandoned after just a single use — it takes a staggering combination of novelty and utility to win a spot on the home screen. For mobile game publishers, increased stagnancy and competition have driven the cost of user acquisition higher than ever. To compensate, UA marketers and game developers are both prioritizing quality over quantity.

  1. How the offerwall drives value for publishers
  2. How the offerwall drives value for UA marketers
  3. How the offerwall drives value for players

What does quality look like in today’s mobile gaming space? For publishers, it means high fill rates and high eCPMs. For UA managers, it means attracting high-value users whose LTV outstrips the cost of acquisition. Simply put, they want to see a positive return on ad spend (ROAS).

Enter the offerwall. A mainstay of the mobile monetization world, these ad storefronts are once again having a moment. Since their inception, offerwalls have been praised as a premium monetization tactic. Unfortunately, as low-quality imitation products crowded the space, some began to fear that offerwalls negatively impact the user experience. At Tapjoy, however, we’ve stayed loyal to the tenets that have differentiated our offerwall from the beginning:

It’s that simple. And now, new data confirms that the Tapjoy offerwall delivers the best of both worlds for both marketers and publishers and more importantly, our players.

 

How the offerwall drives value for publishers

For publishers that rely heavily on advertising revenue, the offerwall provides a way to monetize users who do not make in-app purchases. In every game, there is a segment of users that wants to keep playing, but simply won’t invest in the virtual currency they need to do so. Rewarded advertising is invaluable to this cohort. It’s essentially a free ticket to ride.

Despite being an opt-in ad format, the offerwall still sees high engagement: A staggering 62% of players* who open the offerwall once will do so again. For publishers, offerwalls open a door to unprecedented ad revenue. Moreover, offerwalls lead the industry in eCPMs because advertisers are willing to pay more for the quality users they attract.

*Tapjoy Consumer Survey Data, 2019

 

Case Study Results:

One of the best parts about working with Tapjoy is that they provide full-service customer support for players. My team’s inbox used to be flooded with offerwall support requests — now that number has gone down to zero.

Caroline Lee

Marketing Producer

A Thinking Ape

How the offerwall drives value for UA marketers

Our offerwall is optimized for performance marketing. That means that advertisers never pay for impressions — they pay for results. And as results go, our CPE (sometimes known as PPE) product far exceeds the majority of performance ad products available on the market today. In a CPE campaign, players are incentivized to install a game and complete pre-determined milestones within the app. For UA managers, that means the game itself acts as a lure, attracting only those players who actually enjoy interacting with the app. The result is that every completed engagement equates to a quality user.

 

Case Study Results:

CPE brings us better user retention and ROAS, It’s working so wonderfully for our games and we will always consider Tapjoy a top partner.
FunPlus

Daphne Li

User Acquisition Director

FunPlus Games

 

How the offerwall drives value for players

In a recent survey of our global userbase, we asked 16.5K players for their honest opinions on the offerwall. In the process, we uncovered valuable insights to inform our product roadmap — we understand that when players are happy, everyone else is happy too. Here are a few of the responses:

From this data, it’s clear that offerwalls are the definition of a value exchange. For marketers, they offer an opportunity to meet players on their turf and reward them for high-value engagements. For publishers, offerwalls monetize a segment of users that would otherwise not contribute to revenue. For players, the offerwall is a ticket to keep on playing.

 

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As the mobile industry matures, developers have no shortage of options to choose from when it comes to monetizing their users. One of the most effective and time-tested methods is the mobile offerwall. It combines all the benefits of high-performing ad formats like rewarded video and playables with the fun-factor of earning virtual currency. Offerwalls have the potential to generate unparalleled eCPMs while also fostering user engagement and retention. In this brief guide, we’ll introduce you to mobile offerwalls and their benefits for mobile developers.

  1. What is a mobile offerwall?
  2. What are the benefits of mobile offerwalls?
  3. How offerwalls function
  4. How to get the most out of your offerwall

 

What is a mobile offerwall?

Offerwalls are in-app advertising units that monetize apps through incentivized engagements. They can be implemented in any app that offers virtual currency and are most commonly used in mobile games for Android and iOS platforms. Offerwalls function as storefronts in which users can complete various objectives, such as watching a video or signing up for a free trial in exchange for in-app currency. On Android, these offers can also include incentivized offers to download and install promoted apps or even reach certain milestones in the game or app’s progression.

Beginners Guide To Offerwalls

 

What are the benefits of mobile offerwalls?

Industry studies have consistently shown that mobile players are highly willing to engage with advertisements, provided they can do so on their own terms and receive something of value in return. Offerwalls satisfy this need by providing an opt-in portal for incentivized ad engagement.

Offerwalls don’t just benefit end-users: They have immense benefits for developers and advertisers as well. When a developer implements an offerwall in their app, our studies have shown that they consistently produce the following benefits:

 

How offerwalls function

After a developer integrates an offerwall into their game or app, they can add elements such as “Earn Free Currency” buttons to the native UI that produce the in-app storefront. These buttons can be placed anywhere in the app, but are most effective in the store, main menu, or “game over” screens. Upon launching the offerwall users are presented with various objectives that they may choose to complete in exchange for premium currency or in-game bonuses. This list is refreshed daily so that well-retained players can engage with new offers on a consistent basis.

Some common offerwall objectives include:

 

How to get the most out of your offerwall

When it comes to maximizing offerwall impact, mobile developers have several techniques at their disposal. By optimizing the offerwall design or strategically placing offerwall engagement CTAs, developers create a better user experience and in turn generate more revenue.

  1. Customize your offerwall – You can customize offerwalls to reflect the app’s native UI, including colors, fonts and brand imagery. A custom UI reinforces the feeling that offerwalls are part of the app experience which creates a smooth path for player engagement.
  2. Prompt users when they run out of currency – Developers can invite players to engage with the offerwall at key points during the gameplay loop. For example, a game over screen can link players to the offerwall for an extra life or additional resources.
  3. Promote offerwalls to non-payers – Developers can optimize offerwall messages and notifications by segmenting their players into three groups: payers, non-payers, and inactive users. This segmentation allows developers to maximize the value of each group without cannibalizing their IAP revenue. When implemented correctly, offerwalls have been proven to have a positive impact on player LTV:
    1. Apps with offerwalls usually have retention rates of at least 50%.
    2. Users who engage with rewarded ads are 4.5x more likely to make an in-app purchase.
    3. Currency sales increase conversion lift by up to 80%.
  4. Execute regular currency sales – Offerwalls can feature limited-time currency sales that offer higher virtual currency rewards. These deals increase the likelihood that players will engage with offerwall objectives and will continue to do so once a sale is complete.

For more tips, read our latest offerwall guide: “6 Tips For Maximizing Mobile Offerwall Revenue”.

 

The Tapjoy Offerwall

Tapjoy’s SDK allows developers to quickly and seamlessly integrate offerwalls into their apps from a centralized, easy-to-use dashboard. We also provide the tools and resources to fully customize your offerwall UI. We also know how important it is to ensure a positive experience for your players, which is why our customer support team is provides players with dedicated resources and monitored social media channels. We also offer a complete developer dashboard that grants full visibility into the reward fulfillment process and even lets you manage payouts manually. With a few simple clicks, anyone can implement custom exchange rates, launch a currency sale, or deploy in-app promotions to help drive awareness and engagement with your offerwall.

An offerwall is one of the best tools developers can use to monetize their apps, so don’t let the opportunity go to waste! For more information on the benefits of a Tapjoy-powered offerwall, download our first-party reports or check out our mobile monetization features.

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Choosing the right offerwall provider is an important part of your overall mobile monetization strategy. Engineering time isn’t cheap, and every integration needs to be tied back to a clear ROI. So how do you know which offerwall provider is worth your time?

In this article, we’ll outline the questions every developer needs to ask before committing to an offerwall provider.

  1. What Level of Support Will I Receive?
  2. What Kind of Branding Options Are Available?
  3. Which Other Developers/Publishers Do You Work With?
  4. What Advertisers Do You Work With?
  5. How Much Control Do I Have Over Rewards?
  6. What Sort of eCPMs Can I Expect?

 

1. What Level of Support Will I Receive?

The most effective integrations take a holistic approach to where, when and how offerwalls fit into your game or app. Having an experienced ad monetization professional on your side makes all the difference. Before committing to an integration, be sure to find out who will be supporting your team during the process and what sort of experience they’re drawing from. Ask things like:

If you’re not confident in any of the answers provided, proceed with caution. An experienced offerwall professional should be able to steer you in the right direction when it comes to category specifics, placements, exchange rates, and more.

 

2. What Kind of Branding Options Are Available?

Offerwalls perform best when they look and feel like any other part of your game or app. The more smooth and intuitive your integration, the better it will perform. The best offerwall providers give you the freedom to customize every part of your offerwall’s appearance, including:

When offerwalls match your brand, it’s easier for players to recognize the role they play in your virtual economy. As a result, offerwall engagement (and ad revenue!) increase. Once you’ve confirmed that you’ll be able to customize your offerwall’s appearance, the next step is knowing what offers players will see.

 

3. Which Other Developers/Publishers Do You Work With?

While you should always take the time to form your own opinions of providers, having a stable of successful partners can be a helpful early indicator as to which ones are worth investigating. Ask around in your professional communities, but also free feel to ask potential providers direct questions like:

Don’t be afraid to ask for specific references, either. An experienced provider should have no shortage of satisfied clients that they can connect you with. This will help you not only verify the value of their product, but can also help you get a jump start on any best-practices that will help you get the most out of the implementation.

 

4. What Advertisers Do You Work With?

Find out who will be competing to place offers in your offerwall and what sort of control you have over what gets shown to your players. Get into specifics and ask questions like:

If control over offers is limited, or if advertisers aren’t advertising with your potential provider, it could be a red flag that they might not be what you’re looking for. For example, we here at Tapjoy work with a diverse combination of brands and app developers to ensure that we’re always able to provide your players with offers that will be relevant to their interests and encourage engagement.

Offerwall Provider Questions 2

 

5. How Much Control Do I Have Over Rewards?

Well-balanced virtual economies are the key to successful freemium games. They keep players progressing through your games and promote regular engagement through a delicate balance of supply and demand. Any major changes to that balance could have drastic consequences, which is why monetization managers need to stay in full control of their offerwalls and the rewards they provide. That means having a firm grasp on the size and variety of offers being made available. Be sure to find out the following:

Developers should be skeptical of any black-box solutions that don’t offer a transparent look into offerwall engagement levels and how they’re affecting player behavior. Make sure you’re given full visibility into how your offerwall is performing, as well as control over key variables like virtual currency exchange rates. Extra points if you’re able to introduce greater value through the offerwall at key times throughout the year (with a Currency Sale, for example).

 

6. What Sort of eCPMs Can I Expect?

Your offerwall provider should be able to give you a reliable and accurate estimate as to how much money an offerwall will generate for your business. Every game or app is different, and so much depends on where your audience is located in the world, so don’t be afraid to drill down into specifics like these:

Getting answers to questions like these will give you the information you need to weigh a commitment to any potential offerwall provider against its potential benefit to your business overall. At Tapjoy, we’re not shy about the fact that our publishing partners typically see twice as much revenue or more when they monetize their games and apps with rewarded video placements and offerwalls compared to rewarded video alone.

 

Ready To Get Started With Tapjoy Offerwalls?

We’re proud to be the leading provider of mobile offerwalls for the world’s best developers and publishers. Tapjoy offerwalls offer the following benefits for mobile developers like you:

Our developer relations team is always available to discuss opportunities and best practices for getting the most out of mobile offerwall placements. To learn more about how you can start generating more ad revenue using Tapjoy offerwalls, click the button below to contact our team.

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In the Tapjoy App Spotlight, we take a deep dive into the engagement, retention, and monetization strategies employed across the mobile industry’s most unique and successful titles. Through industry data-driven analysis, we identify the measurable relationships between development decisions and business outcomes to offer publishers actionable insights they can use to build successful portfolios.

After more than a year in app stores, the mobile version of the popular PC game ARK: Survival Evolved has achieved a remarkable level of sustained success. Translating this massive multiplayer survival experience from PC to mobile was no small feat. War Drum Studios began with an ambitious vision to load the mobile app with a full suite of features, and they worked closely with Studio Wildcard to make it happen.

This on-the-go version features the full online survival experience contained in the PC and console versions of ARK, including a gigantic island to explore, 80+ dinosaurs and primeval creatures to tame and train, multiplayer tribe mechanics, and of course, crafting and building.

Studio Wildcard

Thanks to ARK’s brand recognition, unique design, and an aggressive content release cycle, the mobile app has already become massively popular. With minimal paid user acquisition and an innovative adaptation of its native PC gameplay loop, War Drum Studios has managed to execute a seamless transition into mobile environments, fostering engagement with an expansive and valuable new audience.

 

Key Insights

  1. How War Drum Studios made the leap from desktop to mobile
  2. A steady stream of new content keeps users engaged
  3. ARK’s rewarded monetization & IAP strategy
  4. Brand recognition fuels the app’s current performance
  5. Global Android Reviews
  6. Global iOS Reviews
  7. Conclusion: ARK is far from extinct

 

How War Drum Studios made the leap from desktop to mobile

From the start, War Drum Studios set out to simplify mechanics without compromising aesthetics. While the title had to be optimized for the limitations of mobile interfaces, it was imperative that this not come at the cost of the exploration and discovery experiences to which the PC version owed its success. That said, fitting ARK’s expansive open-world survival gameplay onto mobile devices presented a number of technical and design challenges, some of which Art Director Morgan Hughes discussed in a presentation at the 2019 Unreal Engine Conference. What was originally intended for long-term, curiosity-driven gaming sessions on desktop would need to be scaled down to offer meaningful and compelling gameplay interactions at a fraction of the time and with fewer input capabilities.

Features had to be cut and systems rejigged. The number of in-game creatures was reduced to roughly 80 in the interest of concision and size while user interface elements were scaled up to accommodate touchscreen inputs on tablets and phones. A more forgiving combat system was introduced in order to fuel a time-based virtual economy that promoted regular scheduled engagement at shorter intervals as opposed to longer sessions.

The cold-open approach to survival gameplay that’s common to desktop survival titles also had to be replaced, knowing that mobile users are often likely to churn within even the first few seconds of gameplay. A more curated experience was developed, as War Drum Studios added a linear quest system designed to better orient players with its mobile-specific systems and encourage pursuit of meaningful rewards as early as possible. Players were introduced to all aspects of the virtual economy, including rewarded ad placements and power of premium currency, within the first intended session. This ensured they were well educated by the time the game’s open-world aesthetics were reintroduced and monetization strategies could be put into place.

Finally, by treating the mobile version of ARK as its own entity, the developers at War Drum Studios were able to give players experiences that are exclusive to this version. Speaking with Tapjoy, War Drum Studio’s Lead Community Manager Jordan Kleeman said, “Since we treat this as a separate product from the PC and console game, there’s lots of things we’ll do that are unique to the mobile game, like weekly dungeons. This sort of mobile-only content keeps a steady stream of users coming back to ARK week after week.”

 

A steady stream of new content keeps users engaged

The mobile version of ARK: Survival Evolved is unique in its approach to user acquisition, in that it makes little to no use of paid advertising. While paid UA is often a staple of mobile game marketing strategies, they are actually the minority contributor to the title’s DAU. Organic acquisition, thanks in large part to its existing brand recognition and frequent content release cycle, has been sufficient to drive a steady flow of high quality installs for the entire year that it’s been in the market.

A quick glance at the game’s version history shows that it’s not uncommon for the developers at War Drum Studios to push 1-3 and sometimes even five releases per month. Each update involves exciting new content, rather than just bug fixes. Kleeman regularly releases developer update videos which review upcoming app features. The studio’s commitment to fresh content allows them to consistently reactivate their existing player base with update notifications for fresh content, ready to be consumed.

As Kleeman told us, these updates are “incredibly important” to ARK’s ongoing mobile success. “The games industry is moving more and more towards live service games,” he said. “It was important to us… to make sure that we’re constantly releasing new things to keep our players engaged and give them reasons to keep coming back.”

This is the kind of developer activity keeps users equally engaged, and that sustained user engagement has earned ARK a substantial visibility in the app stores. ARK: Survival Evolved has benefited from hundreds of store category/country feature placements on the Google Play store in the past month alone. ARK has been featured across 16 countries in the following categories:

Many of these featured placements have been in the “Best New Updates” section, which provides a visibility boost in addition to the natural spike in DAU resulting from update notifications that players receive whenever new content is released. Frequent content updates have kept players engaged and a strong relationship with store platforms has kept ARK visible to new users allowing for continued organic growth. It’s this virtuous flywheel that has allowed War Drum Studios to consistently keep ARK in the charts. These app store features have enabled ARK to maintain a consistently high rate of new downloads, despite the absence of a paid UA strategy.

 

Estimated July 2019 Downloads (via SensorTower)

 

ARK’s Rewarded Monetization & IAP Strategy

Unlike desktop, ARK’s mobile version employs the free-to-play business model. Revenue is generated through rewarded ad placements and in-app purchases; according to Kleeman, “the split is probably 30% ad revenue, 70% in-app purchases, with most ad revenue coming from our offerwall and rewarded ad placements.” ARK uses rewarded ads as part of their core engagement loop, providing players the ability to level up, progress through content faster, or acquire the Ancient Amber virtual currency. The app also offers a number of “free gifts” in the form of valuable objects, including food, medicine, or armor. These free gifts can be acquired by watching a rewarded video ad every two hours.

As the game’s only hard currency, Ancient Amber figures prominently into ARK’s virtual economy. The use-cases of this currency are tied directly to gameplay mechanics, as opposed to timers or cooldowns. While this can lead to a relatively low average revenue per paying user in other game genres, the sophistication of ARK’s gameplay systems and economy design provides ample opportunity for players to derive value from repeat purchases. Paying users typically convert on multiple premium items, making for an active late-game community responsible for generating the majority of the game’s revenue.

That said, ARK does offer things like timers and cooldowns too. “We have a wealth of in-app purchases,” Kleeman explained. “‘Paying for convenience’ is sort of our motto for the items we sell in-game.”

To further cultivate this dynamic, War Drum Studios employed a VIP program monetization strategy. It uses the relatively new subscription based monetization functionality provided by Google and Apple to offer its most devoted players a better class of gameplay experience designed around frequent engagement. The “Primal Pass” IAP can be purchased on a monthly or annual basis and includes the following features:

 

Estimated July 2019 Revenue (via SensorTower)

 

Ark Survival Evolved

 

Brand recognition fuels the app’s current performance

ARK’s powerful brand recognition has allowed it to sustain consistent profitability and reach. The decision to optimize in-game assets for older devices allowed it to thrive in geos where current gen device adoption is lower. At the time of writing, App Annie data places ARK’s Android version among the top 10 grossing Android apps within Mexico (#6), Ecuador (#7), Saudi Arabia (#7), Colombia (#9), and India (#10).

“We knew making the transition from console and PC to mobile would be a challenge, but our investments in mobile-specific game aesthetics paid off. ARK is also a powerful brand, and that brand recognition has been a primary driver of our success on mobile. Our PC community is already highly active and engaged, and many of these same users have taken the liberty to review our mobile edition publicly and positively. There’s always active discussion on our forum regarding the ARK app and we are incredibly grateful for this vibrant community.” – Marc Diana, VP of Partnerships and Marketing at Studio Wildcard.

In addition to the top grossing charts, ARK benefits from prominent visibility in its gaming sub-category charts on both Android and iOS

This sustained community engagement and consistently high review scores have increased the app’s visibility radically, resulting in a steady flow of organic downloads.
 
 

Global Android Reviews

Ark Android reviews

Key:    = # of positive reviews,     = # of negative reviews

 

Global iOS Reviews

Ark iOS reviews

 

ARK is far from extinct

War Drum Studios has managed to translate unique open-world gameplay, varied monetization strategies, and a strong content development machine onto mobile platforms in order to make ARK: Survival Evolved a major success story. Though theirs might not be the most universal approach, it’s a valuable reminder not to underestimate the potential of a strong franchise to navigate new environments and generate value for its creators.

 

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Offerwall monetization can be incredibly effective for mobile developers. It provides an engaging opt-in monetization option for users, increasing ad revenue and improving overall engagement.

However, it isn’t a fit for every app. Offerwalls drive revenue by providing value, and they can’t do that if your game or app doesn’t leverage a few fundamental parts of traditional freemium app design. In this article, we’ll walk through some key questions every developer should ask themselves before committing resources to an offerwall integration.

  1. Does Your Game Have A Virtual Economy?
  2. Would Your Community Respond Well To An Offerwall?
  3. Will Offerwall Monetization Positively Impact Your Virtual Economy?
  4. Can You Ensure Visibility For The Offerwall?

 

1. Does Your Game Have A Virtual Economy?

One of the main benefits of a in-app offerwall is that it provides players with an extra avenue to further engage with the games they love when they may not wish to make an in-app purchase. Like many aspects of free-to-play games, offerwalls depend on a strong relationship between supply and demand. If interaction with your game’s core features doesn’t depend on some element of a virtual economy, offerwalls might not be a right fit.

If your game does include a virtual currency based economy, then offerwalls likely have a place in your core engagement loop. They are most effective when they serve as a source of currency that’s in particularly high demand. In freemium economy terms, this is typically referred to as a game’s “hard currency”.

Unlike soft currency, which players can typically earn through gameplay, hard currency is more valuable and is typically kept scarce to foster demand. It’s this high demand that motivates players to complete IAPs, but can also be channeled into providing value for developers through offerwalls and other kinds of rewarded ads.

Concerns over IAP cannibalization have been widely disproven by a variety of industry studies, including our own. In fact, offerwalls have been found, in many cases, to increase conversion rates and average spend per user by fostering greater levels of overall engagement. With that in mind, it’s still important to take a qualitative look at your user base and consider what it could mean to them.

 

2. Would Your Community Respond Well To An Offerwall?

Many games are solitary entertainment experiences, but some let players interact with each other, giving rise to organic community interactions on social media, subreddits, fan sites and Discord channels. Many developers come to depend on these communities for organic user acquisition and retention. Before adding an offerwall, ask yourself what impact it might have on your community dynamic.

It’s been our experience that when it comes to free-to-play titles, most communities would benefit from adding an additional currency source. Rewarded ad placements of any kind can often end up in blog posts and articles shared by experienced players in an effort to help newcomers.

Starting fresh with offerwalls integrated at launch is one sure-fire way to ensure that they’re well received. If you’re updating an existing app to include an offerwall, it’s a good idea to notify your community through patch notes and social media channels to make sure you get the word out.

 

3. Will Offerwall Monetization Positively Impact Your Virtual Economy?

While economies of any kind can quickly get complex, they’re fundamentally comprised of two things: sinks and sources. Sinks are any opportunity for players to spend currency, and sources are ways to earn it. It’s critical that these two are kept in constant balance in order to fuel engagement. Too many sinks and players might get frustrated. Too many sources and they won’t have anything to aspire to.

Adding an offerwall means introducing a potentially powerful source into your game economy, and so they perform best as part of an economy with an equal or greater number of sinks. These come in many forms, but can include any of the standard freemium economy drivers, including:

If your game or app offers players indefinite opportunities to engage meaningfully through hard currency transactions with assets like those listed above, then it’s likely a great fit for offerwall monetization. If you have only a limited number of ways for players to spend currency, consider adding more before finding ways for an offerwall to fit into your overall strategy.

Offerwall Monetization 2

 

4. Can You Ensure Visibility For The Offerwall?

The revenue generated by any rewarded ad placement is limited by the number of opportunities players have to engage with it. Furthermore, offerwall engagement increases the closer it is to moments in the user experience in which players feel the need for hard currency. If your game or app includes one or more high-traffic bits of UI where players can experience demand for hard currency without interrupting gameplay, then an offerwall is again likely to fit nicely into your economy at large. Some examples of ideal placements include:

Some of these placements drive higher conversions than others. Ideally, each offerwall will have multiple access points in order to maximize engagement. As with any monetization tactic, user experience comes first. If you can integrate an offerwall in such a way that players don’t feel distracted or annoyed by your placement then you’re in good shape for boosting ad revenue, engagement, and retention. Remember – offerwalls is are an opt-in experience for your users.

Implement Offerwall Monetization With Tapjoy

As offerwalls become more common across the in-app ecosystem, it’s crucial to ensure that yours provides a seamless and engaging user experience. That means ensuring full control over things like conversion rates, display frequencies, branding, and more.

If you replied “yes” to one or more of the questions, then we should talk!  As the originators of the mobile offerwall format, we here at Tapjoy have spent more than 10 years perfecting the practice of offerwall monetization and helping countless developers use offerwalls to add a powerful new revenue stream to their business. Click the button below to get in touch with one of our monetization experts and learn more about offerwall monetization with Tapjoy!

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For nearly a decade, mobile publishers and developers have relied on ad waterfalls to monetize their user bases. It’s an approach that made sense given the technical limitations of the time, but new developments are allowing for more advanced strategies to take root. It’s time for a change, and we believe programmatic mediation, sometimes referred to as in-app header bidding, is the way forward. Understanding why starts with recognizing the shortcomings of ad waterfalls.

 

How the waterfall model falls short

The mechanics of ad waterfalls contain a number of biases, some less useful than others. Their reliance on estimated revenue per ad impression means that demand sources with the best historical track records are given the greatest opportunity, while others rarely get the chance to prove their value. It’s a model given to both negative and positive momentum. 

The top demand sources tend to stay at the top, delivering high eCPMs for the majority of ad impressions, while the lower sources are only given occasional opportunities to deliver value. As a result, publishers are able to realize greater value than if they were to depend on a single demand source, but not as much as if every source were given the chance to demonstrate their strengths consistently. These blind spots can mean missed opportunities for publishers, especially as the entire ecosystem develops a stronger understanding of who their audience is. 

As mobile targeting capabilities grow, it has become easier for demand sources to determine which customers are most valuable to them. In these circumstances, a lower-waterfall network might actually be willing to pay more for impressions to these audiences than networks ranked above it.

Waterfall mediation was a good and natural progression from the manual management of individual ad networks, but it’s proven to be inefficient when it comes to giving each demand source a level playing field to compete for the most valuable inventory.Amit Bhojwani, Head of Partner Management, Facebook Audience Network said. “Bidding flattens the waterfall and gives every network the opportunity to compete for publishers’ inventory.

“Waterfall mediation is certainly widely used, but it also makes it harder for smaller demand sources to compete at a premium level — even when they have the means to pay premium prices,” Jackie Cooper, Manager of Professional Services at MoPub said.  “Programmatic mediation levels the playing field by allowing all demand sources to truly target their most valuable markets in a way that is both transparent and competitive.”

For example, a premium source with a stronger track record may be willing to bid $1 for an ad impression, but a secondary network with greater knowledge of this particular user would pay $3 to reach a key market segment. If the premium network fills demand in this scenario, the publisher is missing out on revenue that was hidden behind the waterfall’s prioritization. Even worse, because the secondary network fulfills impressions less frequently, the average price that determines waterfall rankings can become volatile and prone to error.

From this perspective, waterfalls run counter to mediation’s intended purpose of maximizing publisher revenue. So what can be done?

 

What in-app bidding means for the ad ecosystem

Programmatic mediation represents a more effective and transparent mechanism for monetizing apps through the power of in-app bidding. Instead of prioritizing networks and contacting them consecutively, in-app bidding solutions contact each integrated network concurrently and provide an opportunity to buy the impression in a real-time auction. By offering these opportunities to multiple demand sources at the same time, programmatic mediation platforms can increase competition, maximize yield, and diversify demand for each impression.

“For years, in-app ad monetisation suffered from inefficiencies, lost revenue, and an overall lack of transparency,” Amit Bhojwani, Head of Partner Management, Facebook Audience Network said. “Impartial systems that award impressions to the highest bidder help in solving these problems directly and create new opportunities for sustainable ad businesses.”

Let’s revisit the scenario mentioned earlier — where the high-paying premium network offers $1 for an impression, but the secondary demand source offers $3. In a real-time auction, the higher bid of the secondary source means it wins the impression and pays more revenue to the publisher.

“The meritocracy of real-time bidding for in-app advertising makes a world of difference for publishers,” Jayme Farrell-Ranker, Senior Product Growth Manager at MoPub explained. “In recent A/B tests, publishers using our in-app bidding solution, Advanced Bidding, saw increases in ARPDAU of up to 45% and enjoyed the reduced overhead that comes with switching to a unified solution.”

Advertisers benefit from in-app bidding solutions as well. The transparent nature of programmatic mediation creates an equal playing field for all demand sources. It allows advertisers to leverage market data to determine whether an end user warrants increasing the bid’s value. Suddenly, the broader advertising ecosystem is more sustainable as it increases buyer confidence and matches the right ads to the right audience.

 

Implementation 

Despite the notable benefits of in-app bidding, much of the industry remains entrenched in waterfall models. Transitioning to programmatic solutions will take time, but steps can be taken to implement them more effectively:

1. Choosing the right model – Programmatic or Hybrid

Exclusively programmatic in-app bidding is not the only solution available to publishers. In this transition period, hybrid models allow publishers to monetize apps through auctions while still prioritizing direct partners. This combines the best elements of both models by allowing publishers to continue to get the most out of their existing demand relationships while providing new opportunities to experiment.

2. Auction density

Flattening the waterfall with in-app bidding is a great first step to increasing competition. The second step is to maximize the number of demand sources on your platform. Even within hybrid models, the more partners you have taking part in auctions, the greater the benefits will be for publishers and advertisers alike.

3. Reviewing your Results

When transitioning networks from a traditional waterfall integration to a bidding integration, publishers need to ensure they measure performance changes effectively. Additionally, when running a hybrid waterfall that contains both bidding and fixed price/auto optimised demand, it’s important to measure the share of voice bidding partners have in the overall demand mix, as well as the impact bidding has on non-bidding demand that remains within your app. By reviewing overall ad APRDAU publishers can best measure the effectiveness of programmatic mediation.

 

Ultimately, programmatic mediation benefits publishers as competition increases on a per impression level. On the flip side, demand partners get greater transparency on available supply, improving advertiser confidence and long term performance.

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