In a world where more than 70 percent of users access the internet through smartphones, the mobile app that is defining customer convenience and comfort has become the golden key opening the gateways to better branding strategies. Using an app, a customer opens a direct channel of communication with the company. For a company, this presents a golden opportunity to leverage the app to promote brand imaging. But the most innovative marketing ideas, smartest app developers, and the app’s inbuilt user friendliness won’t count for much if the app isn’t making money. In other words, app monetization is vital to augment the business bottom-line.
The waves of technological change are crashing, churning, and transforming the contours of the app developer’s ecosystem. Customer preferences are changing with lightning speed. Digital marketing masterminds at Miromind give us a bird’s eye view of the most significant trends that are shaping brand marketing strategies and fueling app monetization.
Before we start discussing trending developments, let’s briefly examine what started the buzz within the in-app monetization arena.
How app monetization made a tentative beginning
Historically, apps were presented in feature-rich forms that had to be downloaded as full versions. The scenario changed dramatically after Apple’s iOS 3.0 facilitated in-app purchasing on the Apple Store platform. Developers could finally market apps as free versions that could be upgraded to full versions for a price. This enabled users to purchase content, unlock features, or acquire value-added services within the app without having to migrate to a separate payment portal. This led to a slew of strategies for improving monetization of the app and better opportunities to promote product branding through apps.
How branding and app monetization strategies are evolving with the times
Customer metrics analysis is changing brand advertising and monetization campaigns
In the decade leading up to 2016, we saw the market penetration of smartphones peaking in the United States as in many other parts of the globe, and app development was quietly picking up the pace. From 2017, the strategy shifted from marketing new apps to analyzing customer behavior– for example, how often was the customer engaging the app or keeping the app installed. Which features were in higher demand? Which factors were losing ground and why? The most critical question that begged an answer was how much money was an app generating?
What this meant was that app developers were gradually shifting focus away from app installation to the behavior of the customer post-installation. The wealth of consumer data was being tapped to evolve new branding campaigns and monetization strategies more focused on fulfilling customer intent. The new approach positively impacted cost per install (CPI) campaigns where advertisers paid publishers wherever users install the app. We’ll see companies improving ROI with each ad spend.
Programmatic ad mediation is burying waterfall mediation
In the freemium model, we’re seeing apps presented as basic versions with users given the option of paying to unlock full version functionality. You also get a handful of ads that many would find distracting given the small size of the mobile screen.
The trend nowadays is to shift to ad mediation platforms where publishers get to maximize ad revenue by sourcing and deciding ad placements where better visibility caters to the growing demand for the product. In this way, the mediation platform with its comprehensive customer metrics analysis provides online marketers a chance to make more significant inroads into areas where customer preferences generate maximum demand.
In conventional mediation models, the best-performing advertising network was placed higher up in a cascading waterfall. This automatically prioritized demand for the advertiser on the lookout for proper ad placement. The drawback was that you were gauging ad performance within a longer window of say 48 hours which could give you skewed results.
Going by the latest trends in mediation, we’re seeing a tectonic shift away from waterfall mediation models to real-time auctions. Every single available ad network now vies for the most effective first impression through an open bidding system where the highest bid wins the auction.
A sterling example of mediation change is global technology firm Fyber which is offering a new app monetization platform. In Fyber FairBid, you get a parallel bidding platform that is markedly superior to the older waterfall mediation model. Publishers now have access to Real-time bidding (RTB) where the app inventory can be bought and sold on single-impression basis through programmatic auctions. And it’s not just RTB that is on offer; publishers gain access to segmented audiences that will go a long way in improving the reach and power of brand advertising.
A path-breaking solution is overcoming poor video ad viewership
It’s a widely acknowledged statistic that nearly half of all video ads go unviewed. Market research indicates that more than three-quarters of Americans will be pressing the ad block button more than ever before. Mostly, this is due to the viewer’s aversion to the proliferation of online frauds. Fortunately for online app marketers, value exchange advertising has arrived as the game changer.
Value exchange advertising is advertising that offers a tangible reward or an incentive in exchange for the user’s time and attention. The trend is now making waves in the video advertising circuit. A valid example is the Interactive End Card (or IEC) that plays after a video. The IEC presents an opportunity for the viewer to interact with the brand in a way that releases rewards or unlocks access to premium (restricted) content.
More than ever before, users are spending quality time within the app and are becoming more receptive to value exchange video advertising. According to the Kleiner Perkins Internet Trends Report of 2018, the viewer’s preference for value exchange videos outstripped the pre-roll advertising (the ad spot that rolls out before the video content begins) by three to one.
In the times to come (much sooner than later) brand advertisers will be spending more time engaging users with freemium apps with precision-targeted value exchange videos which will become the new revenue model.
We’re already seeing signs of this revolution in the music streaming internet radio service. Pandora dumped the music subscription route to embrace the ad-supported value exchange platform to monetize and maximize their revenue stream, and the move has been an enormous success.
Kim Kardashian’s Hollywood video game; Crossy Roads, the arcade video game; Madden NFL, the hugely popular football video game, and the Angry Birds games series are just a few top brands that have bridged the divide to embrace value exchange products for the sheer revenue they generate through better viewer response.
Gaming industry takes the lead in brand building through mobile app platforms
According to market researchers, in-app advertising expenditure by users is steadily gaining ground, and by the end of 2021, digital ad spend would overtake traditional media. It becomes clear that changing consumer media preference is the driving force powering the trend. For example, more consumers were devoting more attention to mobile apps than they were lavishing on television. Now we’re seeing companies catching on to the trend in a big way by earmarking bigger budgets for brand building through mobile apps while devoting equal attention to the monetization of apps.
Nowhere is the brand building effort more evident than in the entertainment and gaming industries. One of the companies that moved ahead with its mobile gaming strategy is Supercell Oy, the Finnish mobile game developer. Supercell abandoned its Gunshine browser game in favor of developing games targeting handheld devices. Not to be outdone, Rovio, the founder of the Angry Birds franchise followed suit and notched up similar success in mobile gaming apps. The trend has resulted in mobile app developers increasing their share in the brand advertising market in the gaming industry.
We are witness to two major disruptive forces—the app developer searching new strategies to monetize the app market, and the digital online marketer seeking new ways to target audiences that are showing increasing interest in mobile apps. Value exchange advertising is the spark that is igniting a new revolution in monetization and product branding. It’s an evolving market, and we’ll see app developers experimenting on a large scale to finalize which is the most result-oriented way of branding the mobile app.