AerServ Boss Offers Tips for Improving Mobile App Monetization

opinionThe following is a guest contributed post from Josh Speyer, CEO of AerServ.

What would Target do if 98 of every 100 people who walked through its doors left without making a purchase? It would probably go out of business. Yet, many apps have built monetization strategies on the presumption that only two to 3 percent of users will make them any money. This would never fly offline. It’s time mobile app publishers made some changes. These three tips will help you drive profitable action from a larger percentage of your app user base.

  1.   Audit your data

If 100 different people open your app, are you able to observe their actions and tendencies? First, make sure you have the necessary analytics for understanding your users. Are you able to determine what percentage of users will spend hard dollars on in app purchases? Do you know what percentage of users will visit the app store and subscribe, or select to watch a video in exchange for some in-app reward as opposed to paying with real dollars? You also need to know what percentage of users won’t do anything at all. Understanding your audience is key to devising your strategy. Be sure you have a system in place for answering these questions, just as retail stores go to great lengths to understand the behavior of their shoppers.

  1.   Customize your marketing

Once you understand your audience segments, you can customize your marketing accordingly. Of course you want to monetize a greater pool of users, but you should also take steps to get more from those who are already spending. In Las Vegas, a small number of “whales” do the big losing. Thus, casinos roll out the red carpet for these players and do everything they can to make them feel comfortable and in the right frame of mind to drop serious dough. Retailers also reward and incentivize their loyal customers, offering promotions and special deals in exchange for their continued patronage. To get more from your big spenders, don’t just offer special deals—eliminate ads from their experience and remove the rewarded video option to encourage more cash purchases.

You should also identify users with characteristics and behavior patterns similar to those of existing big spenders and engage them with enticing promotions. Consider what messaging works best with your loyal users. To monetize and engage non-spenders with a low probability of becoming spenders, integrate rewarded video placements into their experience. Ask your developer to analyze and segment this audience a step further by identifying users who have never opted-in to watch a rewarded video before. For that cohort, and users showing similar behavior patterns, consider using different forms of advertising, such as interstitials after a level of game play, in-app native ads, or banner ads that persist throughout the app.

  1.   Be realistic about performance advertising

Performance advertising plays a big role in mobile app ad spend, yet a significant amount of users will not click to install an app from an ad. Showing these users a performance-based ad is a waste. The publisher won’t generate any revenue because the user will not take action, and the advertiser won’t get its intended result. Instead, segment your users intelligently and serve ads based on their previous behaviors. For example, if you can identify a user as a non-clicker or non-installer, you can opt to show them a sponsored message from a brand that pays based on impressions, rather than serving a performance-based message from a brand that pays based on installs.

This personalized and intelligence-based approach to monetization is a more effective alternative to the spray and pray methods of yesteryear. Retailers would love to have these type of options. (Imagine if Target could make immediate money from shoppers who didn’t actually make purchases?) Leverage what you know about users’ behaviors and preferences to execute marketing strategies that have a higher likelihood of generating revenue. By doing so, you will not only get more from your whales, you will cultivate an entirely new school of minnows by monetizing a larger percentage of users.