Last month, we hosted a publisher event in Beijing together with MoPub to share 2019 monetization trends and best-practices. The event was held at Hotel Eclat in the center of Beijing and it was a full-house, gathering more than 100 mobile app developers from China. In case you missed it, here are some of the key takeaways of the event.?
In-app ad revenue is surging driven by casual games
According to Newzoo, mobile revenues reached $70.3 billion in 2018 and it?s expected to grow to $180.1 billion in 2021. This means that for the first time, more than half of all game revenues will come from the mobile app segment. When looking closer into who the mobile gaming audience is, Reuters reported that nearly 65 percent of U.S. adults play games (more than 164 million people!). The most popular game category is casual games, and this is a game category that is heavily dependent on ad monetization.?
As Christian Calderon from Ketchapp said in this exclusive interview with Chartboost, Ketchapp and Voodoo made up 50% of all arcade downloads in the world in 2018, which also marked the year in which revenue from in-app ads (IAA) surpassed in-app purchases (IAP). According to Appsflyer?s State of Gaming Report in 2018, the revenue split between IAA and IAP for casual games in the second half of 2018 was 56% IAA vs 44% IAP. In contrary, for mid-core and strategy games, they are still relying heavily on in-app purchases, with 27% IAA vs 73% IAP.?
Based on our own client data, casual game publishers make between 70% and 90% of their revenue from advertising. When looking into the revenue split by ad format, 50% comes from interstitials, 30% from rewarded and 20% from banner. A research study made by Walnut Limited UK, for Facebook Audience Network, shared that 65% of mobile app developers expressed that in-app ads are complementary to in-app purchases and 54% agree that ads do not detract from the user experience.
Programmatic is shaking up in-app monetization
While programmatic has frequently been used within the context of user acquisition, there is programmatic development on the supply side as well, which is header bidding or unified auctions solutions. If you?re wondering why there are two different definitions on this, see our previous blog post ?From Header Bidding on Web to Unified Auction on Mobile?.?
The shift to unified auction solutions is inevitable as mobile app developers want better scale and efficiency and the only way to get there is with automation, which is what programmatic essentially means. With new and rapid technology development happening, the unified auction solution will allow mobile app developers to earn more revenue with fair competition through a first-price auction with real-time committed bids.?
The biggest flaw of the waterfall is that it sequences demand partners based on historical performance, which doesn?t give them an option to bid in real time for each specific impression. The unified auction solution is developed to help developers earn more by calling all ad networks at the same time and selecting the highest bid. If you?re interested in learning more about unified auctions, visit chartboost.com/helium.?
Programmatic helps advertisers reach their goals
MAGNA advertising forecasted a 30% growth rate year over year in mobile ad spend dollars resulting in expected ad spend of $80 billion by the end of 2019. eMarketer projected that $36 billion will be on mobile programmatic ad spend, which is a huge chunk of the total mobile ad spend. While not everyone has programmatic bidding capabilities, the industry is definitely moving towards buying more efficiently with AI and machine learning.?
Generally speaking, marketers select which mobile platforms they want to work with based on inventory quality, brand safety, and scale. Publishers relying on advertising revenues, need to excel in these three metrics to be successful. 52% of brand advertisers say their biggest concern is ad fraud, while 48% of advertising agencies think ad viewability is the biggest issue as they rely on KPIs to gauge the success of an in-app campaign, according to Mobile Marketer.?
On the performance side, advertisers are evolving from CPI targets to ROAS (return on ad spend) goals. Programmatic buying technology uses algorithms and machine learning based on proprietary data and advertiser data to help advertisers reach their ROAS goal in an efficient and scalable way.???
Thanks to the MoPub team for joining us in co-organizing such a successful event to support mobile app developers in China. You can find all the pictures from the event here.?
We look forward to continuing our conversations during Chinajoy in Shanghai (August 2-5). Request a 1-in-1 meeting with our team here!