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App Monetization: Video Ads Optimization for Mobile Games

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App Masters15:26Open on YouTube
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The bottom line

Rewarded video ads, offered at several natural moments in a game, are the best way to monetize a free app. Since about 95% of users never pay, they earn from players who would otherwise bring in nothing.

Key takeaways

  • Most users never pay, so video ads are how a free app earns from them. 13:04
    • About 95% of users never pay, a figure from a SongPop (Fresh Planet) talk at a New York conference.
    • Around 70 to 80% of users are gone after day one, so only about 30% of downloads are left to monetize.
  • Opt-in video ads are a triple win for developer, advertiser and player. 4:37
    • Developers get a higher eCPM, the pay per 1,000 impressions, than from pop-ups or banners.
    • Advertisers get the best-performing ad unit, and players choose to watch for coins, so nothing is intrusive.
  • Coins earned from ads train players to spend. 4:04
    • A player who never pays learns that watching ads is how to earn currency for the shop.
    • That habit makes players more likely to watch more ads or buy virtual currency later.
  • Fun Run 3 offers an ad at several points, not just one. 11:34
    • The main menu offers doubled stars, and the daily bonus pays 400 coins for an ad instead of 200.
    • Arena entry is free after an ad or costs 500 coins, and the chest can also be doubled by watching a video.
  • Limiting how often an ad unlocks a reward keeps players from overdoing it. 12:29
    • An ad gives only one free arena entry a day, and after that the player pays.
    • Ads sit inside rewards the player asks for, not as pop-ups that disrupt play.

That's what you got to think about, where can I show the user multiple points to engage with my video ads.

Steve Young, App Masters

Chapter summaries

0:00 Why video ads beat other formats

Video ads earn more because players engage with them, and the fear of losing players to them is overblown.

  • Fun Run 3 shows how far ad optimization can go. 1:17
    • Its ad placement gets one player to watch four to five ads every session.
    • The same player and his son reviewed Fun Run 1 on the podcast about five years ago.
    • The examples that follow are screenshots taken from their own play.
  • Video ads hold attention better than pop-ups or banners. 2:50
    • Players now have to hit play on the ad, so they are more engaged than when it autoplayed.
    • Ads also bring installs, because his son finds new apps through them.
    • Before, he would tap watch video ad and run away.
    • He calls video no better performing ad unit for the advertiser.
  • Worrying that players will leave for the advertised game is misplaced. 4:37
    • A good game keeps its players.
    • Retention is so poor that an ad watched by a few players is not a complete loss.
    • Because the ad is opt-in, the player has already said yes.

5:25 Fun Run 3's main menu

The menu pairs retention features with an ad offer, so the first screen already teaches players how to earn.

  • Fun Run 3 is a Mario Kart style racer. 5:50
    • Players race and use weapons against other racers.
    • He and his son play most nights, before bed or after dinner.
  • The menu is built around retention. 6:26
    • It holds the arena, the shop, daily bonuses and challenges.
    • The ad offer sits among these elements, not apart from them.
  • Ads and purchases can live side by side. 7:09
    • His son has already bought starter packs while also watching ads.
    • A player who is cheap learns that ads are the way to earn money to spend.

7:43 The daily bonus and arena entry carry the ads

Ads placed inside rewards that players already want keep them coming back and earn money at once.

  • The daily bonus grows with each day played, so it drives retention and ad views together. 7:45
    • Players get more coins the more days in a row they play.
    • Popping a video up unasked disrupts play, so the bonus offers it as a choice.
    • The bonus is framed as a gift for just coming in, and the ad is the upgrade.
    • The first option is always free, so no one is forced to watch.
  • The arena is the most loved mode, so it is the best place for an ad gate. 8:38
    • Players race four others, or eight in the bigger arena.
    • The last runner is eliminated at each checkpoint, so a player can be out early.
    • The first entry of the day is a free ad. Later entries cost 500 coins.
    • The speaker has no metrics, but he happily watches the ad first and pays after he loses.

10:14 The chest turns a loss into a win

Giving a reward even after losing keeps players in the loop and prepares them for the next ad.

  • A chest that grows with wins gives something back even after three strikes. 10:14
    • A player is out after three strikes, meaning three finishes outside the top three.
    • With zero wins, the player still opens a chest of virtual currency.
    • The chest refills the coins spent on entry, whether paid or earned by an ad.
    • The message is even though you lost you've actually won, and more wins make a better chest.

11:29 Offer the ad wherever a reward appears

Every moment of gain is a chance to offer a double, and the small paying minority makes that worth building.

  • Any reward the player receives can carry an offer to double it. 11:47
    • The design question is where to give users many points to engage with ads.
    • Doubling also trains players to spend what they earn.
    • The chest follows the same rule, since a win can be doubled by watching.
    • A block works best where most players already go, with a choice of paying or watching.
  • Few users ever pay, so ads must earn from the rest while keeping them happy. 13:04
    • Only a small slice of the roughly 30% of users who stay will ever pay.
    • The aim is more money and users who stay happy with the product.
    • He urges playing Fun Run 3 to spot ad placements he did not cover.

In the growth library

Steve Young, Founder, App Masters (app marketing agency and podcast). Rewarded video ads work best when they are offered at several natural points in a game and tied to the in-game economy. Using Fun Run 3 as the example, the episode shows one player being prompted to watch 4 to 5 video ads per session without feeling forced.

More from App Masters · The whole library, and ask it anything

Transcript384 lines
0:00

coming up I'm gonna show you an example of an app that is optimizing their video ads so well that I'm watching four to five ads every time I play the game stay tuned what is up app nation it is steve peon founder at masters dot-com the place you go when you want action-packed content in the app business and today well first off thank you for some of the feedback that i gotten from my paid apps category I've never seen such crazy comments in terms of me doing something I'm sorry I did protect some of those content and edited that funny it's just something I'm trying okay trying to be great content for you guys and trying to like provide this valuable content but at the same time running a business so for those were very very disappointed I'm sorry it's a brand new strategy that was just trying to try out okay so bear with me but let's get into the more important stuff and while you're watching this

1:07

video today I want to talk to you about a game that I've been playing a ton with with my son it's funny because we actually reviewed the version one so it's called Fun Run 3 and my son and I reviewed version 1 like shoot 5 years ago when I first started the podcast he came on and we talked about Fun Run 1 and how much we liked it and we been playing Fun Run 3 a whole ton to him and I and we've been loving that game as well and what I started noticing with fun on 3 is that they do they're doing a phenomenal job of optimizing their video ads and so I took a bunch of screenshots for you guys i'ma show wit show you guys what they're doing so well that's got me watching four to five ads every time I'll play the game I'm playing the game a lot alright so let's get into it go go video ad monetization how to optimize your video ads and make more money now I think it's safe to assume this but you

2:09

guys are a very sophisticated audience and usually my content doesn't attract all the beginners of the world right so I'm gonna assume that you know a little bit about video ads and why it's so important but for those of you who don't let me go into a little bit details of why video ads so the number one reason is higher eCPM so that just essentially how much you get paid for every 1000 impressions and you're gonna get a higher payout because people are engaging with video ads okay so it's a win for you as a developer the other reason is it's higher engagement and installs for the actual dev so if I'm playing funrun 3 I'm watching this fun run 3 dirty bit they're getting paid higher because I'm watching the video ad then like a pop-up or a banner ad right and then I'm actually gonna be more engaged with the video ad especially now video ads you have to hit play so before I'll show you these examples you hit

3:15

watch video ad it will just autoplay and now they're asking you for hit play on the video to so it's an auto plain so it's double tap so usually I'm more highly engaged before I used to be like watch video ad and run away now it's like all right I gotta hit play twice and then watch the video and literally my son will find new apps because of video ads okay so it's higher engagement and installs okay there's no better performing ad unit than video ads alright so that's a win to the person that's advertising and finally it's a win for us consumers because we love I love getting more coins so if done right usually users users will love watching video ads because they get more virtual currency and because they're getting more virtual currency you as the game developer or app developer you're getting them in the mindset of spending money the other works they have to spend money to get more stuff in your app and they're gonna

4:16

more likely watch video ads or buy virtual currency because they want to spend even more money that's the beauty of it you got to get people to spend at least a little bit so that they're they know that they're gonna spend more okay users love them too I love them telling you I'm watching a ton of video ads okay dirty bit you're welcome all right let's get into it so to summarize it's a win for the developer for the game developer who has the app okay if you're scared that oh they might leave my game and go to another game don't worry okay if your game is good enough people will stay and frankly retention rates are so horrid that if you're getting a few people and your people watching the ad you know it's not a complete loss so trust me it's a win for you the developer it's a win for the advertiser and it's win for consumers this is why video ads are so awesome unlike pop-up ads unlike banner

5:09

ads they're not intrusive if they're usually opt-in I mean customers and users are saying yes I want to watch a video ad okay so it's a win win win triple win which is the type of wind that we all love right so let's get into the fun run example so here's the game go check it out if you guys want to get into more of the details definitely go download the game it's a phenomenal game look me up it's the real page oh you'll see in the some of the screenshots look me up then let's play okay my son and I will probably be playing usually daily nights right before bedtime or after dinner we'll throw on fun run he's pretty good at it actually so here we go you're the examples right so the first off I want to give you guys for those who aren't familiar with the game this though the way it looks ok so this is the main menu of iPhone 10 so I think it's just getting cut off like this but here I am so look me up if you guys

6:05

want to play me but here's what I love and so I want to show you the the context of the game a little bit so that you have an idea okay it's a game with current sort of like Mario Kart where you race and then you have these weapons that you can use against other racers okay so really really fun and engaging definitely economic a so here arena play play here's the shop and everything else here's the you know the menu where you get daily bonuses and different challenges so for retention purposes this is why you have it right these these elements right here are for retention purposes now what I also want to point out is look at this there's a little video ad right here so if I click this I can double the stars so even in their main menu they're giving me an opportunity to one figure out that hey I can make something more and an opportunity for me to watch a video I write when I say make something more

6:57

ease they're giving me something exchange that I can then use virtual currency that can then use in the shop so the training my mind to use money in the shop okay very very important because even if I never buy anything like virtual coins even though I spent net a penny on the app trust me my son has already bought some starter packs but even find never spending money you're training me to wanna earn more money so that I can spend it in the way that if I'm cheap the way for me to earn money is to watching video ads okay so really important here that's why I thought this screenshot was valuable because one it showed you what the app it's all about it's - they have a video ad right here for me okay so let's look at the next one so here is the next one is the daily bonus okay so again this is a retention metric as I play the game more every single day I'm able to get more and more coins right so one it's

7:58

great for retention and - here's the monetization I can guide to get 200 coins click or I can get 400 coins by watching a quick little video right again retention element because they're forcing me airs daily bonus for you for you just for playing just for coming in you can easily get it right now if you want it for 200 or you can double the coins 400 so I know some people are using video ads just popping it up and playing it right we don't want to do that that's going to disrupt the user experience this is the way to really really do it okay alright let's go into the next one so enter the arena I'm not skip over here real quick so here I can play against four people I can go to the Reno where I play against eight that's the part that my son and I really love to do so we love to enter the arena now here's how the arena works the first time you go in of the day you get free so you can either pay 500 coins

9:00

or you just watch this watch this video I think she never clicked on this so I'll have to ask those guys what this is their arena ticket but I'll generally just watch a video okay now we loved Arina okay and I think I think funrun knows that people love the arena because you're playing with eight people and it's like the last place so you start with eight and there's different check-ins different markers that you have to pass and if you're in the last place when that when you pass that marker you get eliminated so really fun right like you don't have to finish the whole race you can get eliminated right off the bat it's a really really good element I think it's a great retention model too that they added arenas so really great for that and secondly look this is the optimal way that I want to play it so I'm gonna have to pay if I want to play this one right or I can get in every day by just watching a quick

9:49

little video now what happens with the arena and I'll get into the some of this a little bit more to is even more phenomenal okay but again this what I don't have the metrics cuz I haven't talked to them but I'm assumed just because of me and what I love doing I love playing the arena and I you know I happily watch videos the first time I play it of the day and then after I lose obviously I'll pay the 500 bucks okay so here's the other part so once the once you're in the arena you have three strikes so if you lose three times you don't place in the top three you get different strikes okay and here's the brilliant part here's what I really love about the arena element - and I want to point out to you guys is as I'm playing so the if I'm racking up wins before I get my three strikes out I get this chest and this chest grows as I get more wins okay and then secondly after I hit those three strikes I can open the chest

10:48

so here the screen shot I got no wins I lost three times in a row I got eliminated three times in a row game so I got no wins but I get to open this chest which gives me more virtual currency okay because I already used it here why whether I watch the video or I paid the 500 coins they replenish me by me losing they're giving me a win - this is what I love about this element one keeps me it took takes a hook loop and then it sort of says okay even though you lost you've actually won and so we give you this chess and the more wins you rack up before you get eliminated the bigger the cooler the chest is the love I love that so again let's recap this really quick here there's multiple places and that's what you got to think about where can I show the user multiple points to engage with my video ads okay that's the summary so one main menu well daily bonus get them to come back and there's always this opportunity so even

11:50

want to open the chest I think but once I get something from the from the game they always give me the opportunity to double up by watching a video all right so that's the really cool part if you win something hey you want to double up watch this video and you're gonna make more and you're gonna train your users to spend that money to so main menu daily bonus and then enter the arena which if your stats are right and they know right if most people are joining in a part of your app well put a little block on it make them pay something or watch a video ad and I've been watching three or four now what happens after the arena's once I watch one video ad I'm gonna have to pay so I can no longer enter the arena unless I pay I can only watch one video I had today I think that's the great part - it's like you don't want to continually waste it right like you don't want the users to stop engaging with video ads you still want

12:45

them to engage with it so they're not overdoing it I think it's the fine balance that funrun it's doing really well as well too many wealth all right guys that's it hope that was useful I love the game definitely go check it out definitely go play it so you can see all the ways they are doing the video ads and maybe you'll find some that I didn't cover as well again video ads are the best way to monetize a free app I was just at a conference in New York and they were from songpop so fresh planet they were talking about how to really maximize 90% of you 95% of you users are never gonna pay so 95 percent of your users are never gonna pay right and you think about like the retention metrics I think like 70 or 80 percent are gonna quote be gone first day so you're really dealing with 30% of your overall downloads and of that 30% only about 95% of that 30 initial 30% are gonna actually pay so figure out a way to

13:45

incorporate video it hides so that you make more money and the your users are extremely happy with your product at the same time okay cool if you guys like stuff like this you know like me getting into the weeds do me a favor go check how app masters Academy do me a big favor if you've got any questions about joining app masters Academy send me an email cuz I want to know what's stopping you from joining I've seen so many good results people are sending me emails we're doubling tripling downloads who've gone through all our videos they're like dude this is so awesome so got some really cool testimonials I want to share with you guys and I'm recording interviews with people who found success through the Academy so that you can really hear from them and how well they've done so definitely check it out it is app masters Academy com it come it contains everything that we do for our clients and these type of deep dive case

14:36

studies and that one video where I tell you you know how much you can pay for paid apps and all that stuff I put I'll put a link to that video you guys can check it out I was being a little sneaky on it check it out it is app masters Academy com and one last thing we are doing more and more events so if you guys want to get interested or just a one in LA we're gonna do one in Bali Bali Indonesia as well in June and then we're gonna do one in San Francisco on the backs of f broke the app growth summit in October so we got Bali coming up this year in June and then in October we're gonna do one in San Francisco as well right so go to at masters comm slash events and don't forget to hit thumbs up and like and subscribe and all the other junk and I'll see you on the next video