In-app Bidding, Monetization
One of our favorite topics to discuss at events right now is in-app bidding. As this technology becomes more widely available to mobile game developers, the team at AppLovin aims to do everything we can to ensure that devs understand as much about the solution as possible.
After all, maintaining a sophisticated, traditional waterfall setup for one or more games is a complicated process, and the idea of switching to a new technology can be intimidating. This is why we want to share what we’ve learned from building MAX, our full stack monetization solution based on in-app bidding. We have the pleasure of continuing to work with our partners and be invited around the world to discuss all things in-app bidding. Read on for some highlights from a few of our recent speaking opportunities.
What is in-app bidding and what do monetization managers do?
Last week at Pocket Gamer Connects Digital #2, AppLovin’s Cyril Cael participated on a panel about how devs can make monetization more fun, and he gave a great overview on what in-app advertising and monetization are. They can be coupled with in-app purchases in some cases, but it is also often used to keep casual and hyper-casual games free.
Just like any other experience, there are many ways to monetize a mobile game. Monetization is a process of refinement and iteration that creates a more rewarding and entertaining experience for gamers. New tools that are leveraging in-app bidding have recently emerged to offer developers a more seamless monetization experience, help automate some tedious tasks, and ultimately earn them more money. The broader idea behind bidding is that it makes a fair, transparent auction to increase competition and increase revenue, and leave these team members with the time to put their focus on a great user experience and helping develop the next hit game!
In addition to leveraging the latest technologies, balance is needed to maximize player engagement and retention, while also monetizing games. Intrusive, unrelated ads can cause friction in the gaming experience for players, and where ad placement sits within your games is key. Analysis of data helps to make the ad experience unique to each player and accounts for their individual playing habits, which ultimately creates a better gaming experience for them so they will continue to come back to the games they love.
The ultimate goal for monetization managers is to keep users engaged and avoid burning through a game’s content too quickly, a big part of which is carefully placed ads that break up gaming sessions. Essentially, monetization managers are increasingly involved in the design and development process of the game, and successful monetization is as much a matter of game placement choices as it is curating ads.
What is the current state of in-app bidding?
Earlier this month, AppLovin’s VP of Platform, Dan Sack participated in a panel with our partners where there was a lively discussion around the current state of in-app bidding. From day one, MAX was built with a focus on providing developers with a more efficient and effective monetization solution built around in-app bidding. Today, many of the largest and savviest developers use MAX to generate more revenue and free up time to make better games. Several large networks have shifted to bidding, while most others are pushing to get there.
While some developers wonder if there are enough networks bidding “yet,” we’ve only seen wins with developers switching to MAX. Today there is an opportunity for all game developers, regardless of genre, to make more money with MAX.
At this point, in-app bidding has been proven as successful, and most of the largest game developers are currently making more money with what we call a hybrid monetization mode where bidding and mediated networks compete for the same inventory.
One of the main benefits developers of all sizes in all parts of the world are seeing in addition to increased revenue, is they are able to shift time away from tedious waterfall management toward the creation of more games. We discussed this in a recent installment of our Ask the Dev Live series where PeopleFun shared that they removed more than 1,000 lines from their waterfall.
An additional benefit that developers are seeing from switching to in-app bidding is faster ad serving and reduced latency. When a developer launches on MAX, we generally see an increase in impressions per daily active user (IMPDAU), which helps to drive a lift in average revenue per daily active user (ARPDAU) and impressions per daily active user (DAU). The data tells us that this cleaner, faster ad serving through bidding consistently results in higher revenue for developers. On average, developers see a 10-30% ARPDAU lift by switching to MAX.
What are some in-app bidding success stories?
Earlier this month at Gamesforum, Daniel Tchernahovsky, Managing Director of AppLovin EMEA, discussed in-app bidding with monetization pros from TapNation and Kolibri. This discussion highlighted the success these studios have seen.
You can get 10-15% ARPDAU lift through manual optimization, but it becomes a time-consuming process that keeps people from performing other functions of their role.
Casual and hyper-casual devs like Kolibri and TapNation don’t have unlimited resources to spend on ad and SDK updates, so it’s incredibly easy for them to plug in a bidder and let it run. By switching to in-app bidding you’re able to hit a button rather than spend hours on monetizing, and it drives more business for everyone.
“Now we have time to do more A/B testing without worrying about latency, since almost 50% of our revenue is from in-app bidding,” said Anouar Benattia, Head of UA and Monetization at TapNation. “It offers us user-level data to help us make better decisions, and take me as an example, I save 50% of my time by using in-app bidding that I can now use this time to focus on my product.”
“It’s a game changer,” said Anouar.
In-app bidding is transparent which makes it better for every business involved. Among the ad networks leveraging in-app bidding, 99% of them have their own networks as bidders. By running A/B testing, bidding allows developers to test bidders against waterfalls, which can lead to incremental revenue increases each time.
“We got deep in A/B testing and the amount of work that we need to do it’s significantly lower, which has driven great time savings for our team and we can redirect those resources elsewhere,” said Nathaniel Barker, Director of Business development at Kolibri. “Our head of ad ops now can focus on things like better rewarded video ad replacement or new in-app purchases.”
While there is much speculation about where the industry will be heading in the future, it appears that we’re barreling toward a world dominated by in-app bidding. At AppLovin, we are constantly listening to the wins our clients are seeing, but more importantly where their pain points are. This way, we can continue to improve MAX so that devs can keep increasing their revenue without having to spend more time worrying about monetization.
