Identifying the right app monetization strategy for 2019
If you were at either CES or Mobile World Congress, you know 5G is going to be big in 2019. The ultimate goal of the technology is “to have far higher speeds available, and far higher capacity per sector, at far lower latency than 4G.” This will allow for the development of new applications like smart bandages that track your healing and faster load times for applications that currently exist, thus building a framework of increased online connection at higher speeds. While we're still in the early days of 5G, publishers need to start rethinking how they want to monetize for a future of reduced latency.
The age old question: Subscriptions or advertising or both
The question of how to monetize a media platform has existed since the dawn of newspapers. Obviously, it was a less saturated market when The New York Times sold its first paper over 168 years ago. Advertising supplemented the cost of the paper and continued to do so until the digital age. Since the proliferation of digital media consumers, and the introduction of hundreds of thousands of new resources for content, publishers have been tasked with being increasingly strategic with how they monetize their content. This is challenging for developers, as selecting the right monetization strategy is more important than ever.
Many developers go exclusively with an in-app-purchase (IAP) based revenue model and users either subscribe or pay on demand to access content, services, and experiences. Other developers choose to offer their app for free. They earn revenue by displaying ads within the app and generate significant ad revenue by attracting large quantities of engaged users. This approach works as long as a developer is leveraging customer data to update the app frequently to add new content and experiences. And then there are developers that take the freemium route free content supported by ads and premium content supported by IAP.
No matter which of the last two approaches a publisher takes, they have much to consider and they aren't alone in their discovery and deliberation efforts. By selecting the right partners, they can develop an advanced, technology-driven strategy to monetize the right users and ensure success.
The middle ground: A mediation solution
Due to the saturation of standard monetization SDKs currently available, app publishers are often forced to integrate multiple SDKs; Mobbo has reported that there are an average of 6.1 SDKs per app among top publishers and apps. They're also tasked with managing dozens of accounts, collecting multiple monthly payments, and optimizing their revenue manually. This process is laborious, and mediation is often the solution.
If you're unfamiliar with mediation, it refers to the process of acting as an intermediary, or “mediator” between a publisher and several ad networks. Whilst mediation can be a solution, most mediation platforms available on the market also put the onus on the publisher to optimize their set-up and thereby their revenue. The platforms that are supposed to help a publisher focus on what they do best — creating content to attract and retain users end up distracting them with ad revenue optimization.
Many publishers try to solve this by hiring experts to manage “waterfalls” (in some cases hundreds of them) and strike “preferred look” deals with ad networks. And while these experts do their best with the available tools, they are always at a disadvantage as almost all stakeholders in the industry benefit from the status quo and inefficiency in mediation technology and do the bare minimum to improve and innovate. Exploiting inefficiency is not innovative.
In April 2018, Ogury acquired Adincube, an entirely unbiased mediation solution that uses artificial intelligence to optimize ad revenue for mobile publishers now called Ogury Intelligent Monetization. Through one simple integration (just two lines of code), Ogury Intelligent Monetization connects publishers to every major demand source in the market, optimizes ad revenue, collects earnings, and pays on demand. This not only negates the need to manage multiple accounts, but it also removes the need to manage multiple waterfalls and multiple floor prices manually. With Ogury Intelligent Monetization, the waterfall is flattened to create a header bidding-like environment where participating and capable ad networks can decide the price they want to provide the fill at per user and per ad request. This removes the need for preferred deals or the need to manually top-rank ad networks as the platform establishes multiple placements at multiple price points, and these price points are dynamically adjusted. Ogury has repeatedly demonstrated that this type of technology delivers much higher revenue, in some cases greater than 200 percent.
For more than a decade, mediation platforms have been stuck in ‘version one,' or ‘1.0,' mimicking what worked for desktops, while mobile devices have gone through a generation of evolution. It's time for mediation to evolve as well. Mediation, as it exists today, is unbalanced with a lot of efforts focused on maximizing revenue, all the while completely ignoring the user. Mediation of the future — to use a cliche, ‘Mediation 2.0' — needs to factor in the user behind the ad request and behind the device screen. Mediation 2.0 needs to deliver revenue while minimizing ad fatigue and maximizing user engagement with ads. Just check the reviews for any ad-supported app and the most common complaint is “too many ads” or “irrelevant ads” or “why the hell am I seeing ads for X.” How do you plan to solve for that?
The solution is leveraging mediation of the future, which is centered around the user. If developers plan to leverage mediation to improve revenue, it's critical they understand the source of that revenue, which is the user. And the best way to understand them is by having visibility to the entire mobile user journey of that user. Ogury's technology is purpose-built on consented first-party data, drawn from the entire mobile user journeys of over 400 million global profiles.
With the average American spending five hours per day on mobile, the industry is evolving to meet the demands of evolving users. The barrier to entry is lower than ever, but the barrier to success has never been higher. You need the right users to monetize, and the right technology partners to ensure your app is positioned for success.