Here at SOOMLA, we are highly interested in measuring monetization in mobile apps. That’s why we love looking at trends under a magnifying glass, spotting them and making predictions on the future. Last year we made a few predictions based on the year before, and this time, we’re going to do the same.
Although nothing is guaranteed, here are some things we believe will come true in the year to follow:
1 – The hyper-casual category will continue to grow
Exploding in 2017, hyper-casual is an umbrella term used for lightweight, instantly playable, highly addictive, and free games. It all started with the development of the mobile games industry roughly a decade ago when we became acquainted with paid games such as Crash Bandicoot. Then came along cheaper games like Angry Birds that cost as little as $0.99, relying on whale-driven monetization strategies. The success of Angry Birds, in particular, was mesmerizing, going so much to spawn a movie and an entire franchise.
Hyper-casual games became popular due to a number of factors. Most notably, they were easily accessible and free to play, having a user-friendly and instinctive design, as well as short sessions. This allowed the players to stop and continue playing instantly, whenever they want. Unlike all these other genres that largely depend on in-app purchases (IAPs), hyper-casual relies on a monetization strategy that combines banners, playable, video, and interstitial ads. Although this strategy does not generate that much revenue from one user, it is the user acquisition that counts. This means that hyper-casual developers rely more on the mass appeal and popularity of the games to make up for the low revenue per single user.
In 2018, hyper-casual games occupied the highest ranks on the app stores. As their popularity, which relies largely on simplicity, shortness and addictiveness increases, so does the demand, leading developers to produce as many as up to 10 of these games per year. In 2019, they are set to become even simpler, shorter, and sweeter, continuing their upward spiral.
2 – Monetization and optimization will be smarter
In all truthfulness, the hyper-casual games’ rise to fame has been predominantly propelled by ads. We are talking about the developers’ strategy for creating ad revenue from players watching and engaging with ads. In 2018, companies focused a lot on discovering who the ad whales, i.e. users generating the most ad revenue, were. They were also interested in what they were doing, what were the best ways to lure even more of them in, and how to optimize the apps to best leverage their existence.
In order to monetize and optimize their advertising strategy for this type of games, publishers need to have access to unbiased granular user data and the right tools to analyze it. Such is any kind of tools that allows developers to see which user categories are not engaging with a certain type of ads (videos, banners, or interstitials) so they can show them more of a different type. Once they have these prerequisites, they can leverage actionable insights and make data-driven strategic decisions, utilizing the information to bring in more users and to improve their overall monetization techniques.
In 2019, ad monetization and optimization are bound to become smarter as publishers recognize the significance of advertising in hyper-casual games. To this end, they may start using smarter techniques (or increase their usage), such as rewarded (and skippable) videos after one or a few core game loops. As app publishers see their worth, ads will also increase in quality and relevance, all the while retaining a good user experience – the key to monetizing modern day users.
3 – App publishers will maximize their revenue potential
As the tools in the industry get better and the production becomes cheaper, app publishers now have plenty of opportunities to maximize their revenue potential and stop leaving money on the table.
One smart method is cross-advertising. This means there are plenty of options to yield revenue through cross-promoting one’s own brands, which allows them to support themselves. Just a single hyper-casual game can be a good platform for placing more ads, so the more apps you have equals more ads. Cross-advertising also includes competitive ads – when one publisher runs ads within its competitors’ games. Although it may seem counterintuitive for the competitor, this strategy has proven effective in generating success for both parties because it allows the genre to go viral.
And let’s not forget to mention video ads which, in the hyper-casual genre, play (no pun intended) the most important role. Incorporating rewarded videos in an app will probably rise as it can easily add 30% to 40% more advertising value.
Playable ads are also a great strategy as they allow users to try out other apps before they decide to install them.
The developers may also start using the “smash-and-grab” ad strategy, attempting to expose all users to at least one ad per session, with more ads appearing with the completion of each game loop, or at least with every important game loop when users are more engaged. The high number of downloads combined with short sessions and repeatable gameplay results in high exposure of players to ads as they can view multiple ads per session and multiple sessions per day. While not exactly resulting in high engagement in one single app, this should nevertheless ensure immense network growth across all apps.
Regardless of what they may be, all the ad strategies must be A/B tested and fine-tuned for ad localization, frequency, and a host of other factors. Implementing deeper features is a good strategy for publishers attempting to stand out from their competitors, but they need to be careful not to over-complicate the genre known and loved for its simplicity.
To summarize, in the past year we have seen that ad monetization has overtaken the IAP model in the mobile game industry. Today, the hyper-casual genre is taking an increasingly significant role, resembling the life itself which is becoming faster and more “hyper”. This genre opens immense possibilities for everyone involved. In 2019, app publishers are bound to recognize the worth of these simple, free games, and should they act accordingly, only the sky will be their limit.