Once you’ve developed a great mobile app, then begins a thorny road toward success with its monetization. Developers have different mechanisms to ensure this, although not all of them are equally good nor are all developers equally capable to implement them.
There are multiple metrics at play in the monetization business, including conversion rate, CPI, CPM, eCPM, CTR, etc. However, arguably the most important metric for understanding your monetization is ARPDAU or Average Revenue Per Daily Active User.
As its name implies, ARPDAU tells you how much revenue your app generates in a single day from individual users that have actively engaged with it during that day. Calculating ARPDAU involves taking the revenue generated from ads, IAPs, or both, on any given day and dividing it by the number of unique active users that engaged with the app during those 24 hours.
Keeping an eye on your ARPDAU over time is important as it allows you to see how the changes you make in the app (e.g. increasing or reducing the IAP prices) affect monetization on a more granular level.
Jump-start the stagnant ARPDAU, ASAP
Sometimes things aren’t going in a satisfying direction in terms of your app’s ARPDAU. In such times, the publisher has to sit down, consider the situation, and devise a plan to address the issue. There are certain activities that are bound to have a positive effect on ARPDAU, so let’s get a closer look at them:
1. Give your users a gentle push toward IAPs
Sadly, a large portion of users who download a free app isn’t contributing to its overall profit. So what can you do to fix this?
One of the ways is to adjust the prices of your IAPs to make them more enticing. Another, perhaps an even better way is through rewarded video ads which give users a taste of a premium feature they might get if they pay for it (like an extra life or in-app currency).
As a matter of fact, users who watch rewarded videos are more inclined to make IAPs, as evidenced in a study commissioned by Facebook two years ago. The study found that mobile gamers are 18% more likely to make IAPs when rewarded video is used.
Another, more recent study also discovered that 53% of developers are aware of the influence that rewarded videos have in driving IAPs.
2. Shake up advertisement positioning and timing
If things still aren’t working out ARPDAU-wise, consider how ads are positioned in your app. Sometimes their location in the app is what is turning users away not only from converting but from the entire app. They might be hindering the app’s functionality, look, or the overall user experience.
Some ads are set to appear at certain points during the app’s use. Mistakes can happen and the ads can pop out of nowhere in the middle of a game level or when trying to get a ride in a ride-hailing app. The end result (user frustration) can be catastrophic.
Other ads, like banners, are shown in the app’s interface constantly, usually at the top or bottom of the screen. This can sometimes lead to accidental clicks and, you guessed it, user frustration.
A/B testing is a sure-fire way to see how ads in your app look like, behave and affect users. Each time you make a change in an ad’s positioning, make sure to test it.
3. Mix it up with different ad types
There are multiple types of ads and some work better than the other in different kinds of apps. There is, however, one ad category that seems to hail the best results – rewarded video ads. Users can opt for watching these ads in exchange for in-app rewards such as extra lives, new items, boosters, in-app currency, you name it.
In fact, users love them so much that when one developer tried to remove them from one of its games, the players demanded their return. So if you don’t have any rewarded videos, you really need to add them as soon as possible because you’ve been missing out.
4. Uncover the whales
Users come in all shapes and sizes. But there’s one type of users that is more valuable than others – the so-called whales. This is a small group of users with a large session count and activities, who spend a lot of money in your app and contribute the most to your revenue. It is extremely important to discover who they are so you can tailor your monetization strategies with them in mind and attract their lookalikes.
SOOMLA is a monetization platform that can help you catch these elusive whales thanks to its lookalike algorithm and ad traceback system that allows you to trace ad revenue back to the user level. Once such a system is in place, you can easily see who are the users that contribute the most.
5. Try out a different monetization method, like rewarded surveys
Rewarded surveys are a relatively new monetization strategy which hasn’t been used much but is a great idea. Like with rewarded videos, you can give your users rewards like extra lives, in-app currency, boosts, etc. for deciding to take part in suggested surveys.
Instead of advertising commission, you’re actually getting useful information that you can monetize by selling it to market researchers, without compromising users’ data privacy. Users can choose to provide information about themselves to make sure the surveys they receive are relevant to their interests. Once they complete a survey, they will receive an in-app reward, while the market researcher sends a payment to you, the app publisher.
Ultimately, it’s up to you
ARPDAU is just a single but immense cog in the magical and fascinating machine called app monetization. At the end of the day, you need to have enough data and track all the right metrics that take part in the process so you can make data-driven decisions and succeed.
Hopefully, this article gave you some ideas to implement in your strategies but ultimately it is up to you which one(s) to use and how. SOOMLA can assist you with them, so if you’re an app publisher, monetization manager, or a member of a product team, feel free to get in touch with us if you need any help or even request a demo. In any case, good luck!
about there. What was unimaginable only 10 years ago is now a reality – mobile apps are serious business.