The five best practices for mobile game monetisation

Given that freemium is now the dominant model for mobile gaming, mobile game developers must master the art and science of monetisation in order to be successful. Typically this requires some combination of running ads and offering in-app purchases (IAPs). At AppLovin, we’ve worked closely with thousands of game developers to monetise their games and have seen what works and what doesn’t up close. Here are five best practices for getting your players to make purchases in your games.

1: Plan your monetisation strategy during game design

It is possible to make good money by building your game first and then thinking about how to monetise it, but you’re going to be more successful if you carefully think through where to place in-app purchases and ads even before you build. Always keep user experience top-of-mind: are the ads placed in such a way that they don’t disrupt game play and alienate players (or are they part of the game mechanics themselves)? If you plan early and strategically, you’re more likely to devise IAPs that encourage players to go deeper into your game and place ads in ways that encourage them to continue to play. While successful virtual economies do require testing and constant, thorough attention, there’s a tremendous amount to be said for planning early and building sound approaches from beginning.

2: Factor ad revenue into your life time value (LTV)

All too often, game developers focus on IAP only when calculating life time value. But accounting for ad revenue within LTV allows you to more confidently pay more per new user. This is more difficult than you expect – but it’s totally sufficient to work with averaged out ad revenue numbers per users – more like a revenue uplift through advertising. You have to remember that low CPIs often mean lower user quality in terms of retention and IAPs, so it’s important to factor in ad revenue. Too often advertisers give us CPIs that are 20-30 percent of their true ad-revenue adjust LTVs. The result is that the users they acquire aren’t high quality in terms of IAPs. So you serve yourself well by factoring in ad revenue to your LTV from the get-go.

3: Make the value of In-App purchases clear

Players like knowing both the value and the advantages of IAPs. With currency, if you’re offering it in bulk, make it clear what the savings are if a player spends £9.99 rather than £1.99. Show them the percentage savings so they don’t have to do the calculation themselves. Similarly, with items, make sure it’s clear to the player exactly how the item will enhance gameplay. Will it give the player an advantage or make the game more fun? Then say so in the description of the item. The point is you want to lessen the friction as much as possible and make conversion as easy as possible. Don’t make the user have to think too much about what they get for the IAP. Spell it out.

4. Check out rewarded video, if you haven’t already

If rewarded video ads are appropriate for your game, you’d be a fool not to take advantage of one of the hottest format in mobile advertising. The hype surrounding rewarded video is well-deserved. One of the great things about the format is that you basically make money off it in two ways: the placement of the ad and IAPs that result from the rewards. While some mobile game developers worry that rewarded video will deter players from buying items or currency (why pay for something when you can get it for free?), actually the reverse is true: when you introduce non-paying players to what they can get with currency, the chances that they’ll convert and buy it themselves actually increases. But, as noted earlier, you can’t just drop it in anywhere at any time and expect it to work perfectly — you should plan as you build where to incorporate rewarded video, incorporate it early and often, and test it to see what works (including the amount of currency you reward players with).

5. Host in-game events and promotions

In-game events can run the gamut from tournaments to limited-time, themed characters and limited-time challenges to celebrity appearances. Pretty much anything that you build that encourages your players to engage with your game in a new way for a limited period qualifies. At AppLovin, we’ve seen top games slip to down the ranking to the 20th spot or below, but then do an in-game event and rocket back to the top ten or even higher. Almost universally, game developers who do events see a surge in ARPDAU on event days. With in-game events, however, it’s important to be creative, ensure that the players get something that they want for joining the event, and leverage holidays for ideas.

Limited time promotions or special bundles are also a great way to upsell the user to invest more currency.

Finally, make sure you have the proper architecture to do the bulk of your events server-side. Then you don’t get hung up in the approval process, you can be super nimble about responding to something timely (for example creating an event that riffs on something going on in popular culture), and you can remove the events when the time is right. And what good is your Christmas themed update if half your players don’t install it until January 15th?

It takes multiple strategies to be successful monetising a mobile game, many of which require being keenly aware of user experience and “thinking big.” Plan your monetisation strategy as you’re building your game and make the value of your IAPs clear. Make the most of rewarded video in order to make revenues in two different ways, and always factor ad revenue in when you’re calculating LTV. Last of all, host events regularly and often — nothing engages player quite like a smart, fun event.