2019 State of In-App Advertising and Monetization
How mobile game developers earn revenue for their games is changing before our very eyes. You need to look no further than the top free games charts, occupied now by many hyper-casual games from hybrid monetization-led companies such as Voodoo, SayGames, and Good Job Games. These game companies are turning the blueprint for monetizing a freemium app on its head, generating significant revenue through more than one point of monetization—namely in-app ads (IAA) and in-app purchases (IAP). Along with the introduction of new ways to buy ad space in-app (i.e. in-app bidding), these mobile game developers are also changing digital marketers’ perception of advertising in mobile games.
But what are other mobile game and app developers thinking and doing? What are the perspectives they have on business models, the ROI of IAA, the app bidding advertising model, and much more? And how far along are digital marketers in shifting their advertising budget to in-app? In June 2019, we surveyed 400 app developers and 400 marketers, who shared how they’re thinking about in-app advertising and monetization, what’s working, how the industry is changing in the next few years, and more.
Here are five important insights from a new survey we’re calling the 2019 State of In-App Advertising and Monetization, in addition to the complete set of survey data across 35 charts.
67% say app bidding represents the future of ad monetization.
Two-thirds (67%) of app developers see app bidding/real-time unified auctions representing the future of ad monetization. And almost half (48%) agree that app bidding’s greatest benefit is access to more granular user-level data.
While app bidding adoption hasn’t mirrored that of header bidding in the web world just yet, over three-quarters (77%) of app developer respondents say they’ve considered shifting their advertising model from waterfall to real-time unified auctions.
Performance versus brand marketing is a thing of the past.
Marketing is evolving in a way that performance and brand advertising no longer means choosing one or the other. Marketers say they now split their mobile ad budgets between performance (49%) and brand campaigns (51%). This breakdown is comparable to what app developers reported with 53% of ad revenue coming from brand buyers compared to 47% from performance buyers.
The majority of marketers are aware of app bidding.
Two-thirds of marketers (66%) say they’re aware of in-app header bidding solutions, and 60% say they’re aware of app bidding/unified auctions.
Advertisers have just as much to gain as app developers by investing in app bidding/unified auctions. A waterfall won’t let buyers bid on users they value most at that particular moment if their buying mechanics or waterfall rank prevents them from bidding. And it’s no mean feat to move up in the waterfall if bids have historically been lower. In unified auctions, price, and only price, determines the winner.
App developers think user-level impression data is the key to ad personalization.
When it comes to monetizing apps, 42% of app developers ranked their biggest challenge as ensuring ad creatives aren’t intrusive to their content. The good news for developers who sell their inventory programmatically is that user-level impression data can solve this. In fact, according to 54% of app developers surveyed, personalization of the monetization experience is the top reason why user-level impression data is important to them.
Business model balance is the name of the game.
Monetizing your mobile game or app no longer means having to choose between IAP and IAA. On average, in-app purchases make up half (53%) of an app developer’s business model compared to in-app ads (47%).
One reason for this split could be that app developers are no longer following the traditional rules of engagement where midcore game developers focus on IAP-only, purely casual game developers on IAA-only, and hyper-casual game developers on blending both.
Full survey results
The 2019 State of In-App Advertising and Monetization survey was administered in June 2019 by Sapio Research—a leading market research company—and commissioned by Fyber. Take a look at the full survey results below. Each chart indicates the respondent group that answered the question.