Mobile Gaming Apps Less Reliant on Advertising Than Others

August 8, 2017

This article is included in these additional categories:

Advertising Trends | Creative & Formats | Cross-Media & Traditional | Digital | Mobile Phone | Tablet | Videogames

The top-grossing mobile app publishers tend to derive more revenues from advertising than from in-app purchases (IAPs) and other sources, according to an AdColony report [download page]. While in-app purchases are their single largest source of revenues (39% share), ads – led by video (31%) and display (20%) – represent the majority (55%) of their monetization.

The survey was fielded among 50 of the top-grossing mobile app publishers with an average of at least 3 million monthly active users each, the vast majority (>80%) of whom are gaming app publishers.

In segmenting the responses, AdColony found an interesting divergence in monetization between gaming and non-gaming app publishers (bearing in mind that the sample size is small for non-gaming apps).

Indeed, while gaming apps derived a majority (53%) of their revenues from ads (video, display and native), in-app purchases and mobile commerce accounted for an almost equal share (43%).

By contrast, advertising represents 76% of revenues for the other apps surveyed, with IAPs and mobile commerce comprising just 21% of the monetization.

Publishers Tout Rewarded Video Ads

When it comes to the user experience, mobile publishers are united in their belief that rewarded video ads offer the best UX, with 87% pointing to them as being among the best. Native ads and interstitial display ads, the next-most cited methods, were tabbed by just one-third (32%) of respondents each.

Rewarded video also gets the nod when it comes to effective monetization methods, with three-quarters of the respondents believing them to be effective. In-app purchases were next on the list, the only other monetization method found effective by a majority (63%) of respondents.

Affiliate programs (6%) and in-feed video ads (13%) are considered effective by the fewest publishers.

Engagement and User Quality Measures

The strongest indicator of user quality is retention (82%), per respondents, an unsurprising result given low app user retention rates.

Another healthy indicator of high quality users is an early in-app purchase (62%), per the report. Interestingly, only about one-third feel that session frequency is a good indicator of user quality, despite research demonstrating that churn rates are significantly lower among users who log more sessions in the first days post-download.

The majority (71%) of mobile publishers use at least 3 engagement methods for retention, with the most popular being achievements (65%) and push notifications (62%). Seven in 10 of those use push notifications report their effectiveness in driving engagement. Indeed, previous studies have credited push notifications with higher app engagement and retention rates.


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