How to diversify your ad revenue streams | Chartboost Academy

September 7 · Nick Schultz · 11 Min read
To maximize growth, you should diversify your ad revenue streams. Fortunately, there are numerous ways to do just that. Here are five ad revenue streams you can explore today to increase revenue in uncertain economic times.

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Life is a rollercoaster. Everyone goes through good years and bad. The only constant is change. 

Take the mobile game economy. While still incredibly lucrative, it is on one of those downward trends. Recent reports claim that consumer spend in mobile gaming fell 5% in 2022 and will drop another 3% in 2023. 

This isn’t all that surprising given the state of the global economy. In the current climate, the average person has less money to spend, which means game developers should expect to drive less revenue than in previous years — at least, if they continue using the same-old strategies.

To avoid this scenario and grow revenue despite unfavorable market conditions, you should explore diversifying your ad revenue streams. 

Fortunately, there are numerous ways to do just that. In fact, we’ve compiled five ad revenue streams you can explore today to turn the tide during uncertain economic times. 

Analyzing the current revenue model 

There are a variety of ways to monetize your mobile game. 

You can charge users a fee to download it. You can offer in-app purchases or show in-app ads. You can even offer recurring subscriptions to drive a steady stream of income. 

In-app advertising strategies are especially popular right now. In fact, ad revenue for RPG, casino, puzzle, simulation, and lucky reward type games — traditionally in-app purchase based genres — has steadily increased since the start of the pandemic. 

We don’t anticipate this changing anytime soon. Why? Because, as mentioned above, users have less spending cash than they used to. Therefore, they’ll be less inclined to pay for games or even in-app purchases. In-app advertising will need to pick up the slack.

That’s why it’s essential that you build an effective in-app advertising strategy for your mobile games as soon as possible. To do so, you’ll need to include diverse revenue streams, so that your game is financially protected should one of them cease to produce. Speaking of which … 

Exploring new ad revenue streams

Which revenue streams should you consider for your mobile games? The five revenue streams below are solid options that could help you increase profitability in 2023. 

In-app purchases (IAPs)

A common way to drive revenue for your mobile games is to offer in-app purchases, i.e., virtual goods and/or premium features that users can buy in exchange for real-world money. 

Generally speaking, the best way to offer in-app purchases is to leverage the freemium model, which allows users to download your game from the app stores for free. You can then monetize said games by selling a variety of in-game perks. 

These perks can range from in-game currency to new character costumes and/or weapons to access secret levels. As long as the perks in question elevate the user experience in some way, you should be able to sell them to eager players who love your game(s). 

The popular game, Candy Crush, is a good example of this. Users can purchase extra lives and “special powers” to give them more control over gameplay and finish levels faster. 

To choose in-app purchases for your games, ask yourself, “What will make my game more enjoyable to users?” Then commit to testing and experimentation. That’s the only way to know if the in-app purchases you’ve chosen increase your game’s revenue. 

Here’s another idea: offer special promotions and limited-time deals. For example, for one day only, players can purchase two extra lives for the price of one. Used correctly, this strategy will help you create urgency, which will increase the number of in-app purchases you sell. 

Sponsorships and brand collaborations

This strategy gets less attention than in-app purchases and in-app advertising. But it can still be incredibly effective, assuming you partner with the right brands, of course. 

Think about it: rather than selling your available ad inventory to any company with a modest advertising budget, you could partner with select brands that your user base will almost certainly like. Doing so will allow you to elevate your game’s user experience. It will also help you deliver better ROI to brands because you’ll show ads directly to their target audience. 

Just be aware, this strategy takes more work than others. You can’t just partner with an ad network to sell your game’s ad inventory. You’ll need to develop and nurture relationships with specific brands; then collaborate with them to build effective campaigns.

What will said campaigns look like? It’s totally up to you and the brands you partner with. In-game branded content and product placements are an option. Or maybe go a step further and create custom, in-game events and/or rewards that relate to your sponsors.

The only limit to this strategy is your imagination and the willingness of your brand partners.

Native advertising

In case you’re unfamiliar with the term, native advertising refers to any form of advertising that resembles the unique outlet it appears in. Put another way, if the ad was paid for by a third-party, but looks like it was created by your game, it’s probably native advertising.

Native ads can be uber effective for both advertisers and game developers/publishers alike.

Why? Gamers prefer them to most other kinds of ads, which means they’re more likely to click on them. When this happens, advertisers achieve better ROI and game developers/publishers can charge more for their available ad inventory.

To make your native ads more effective (and drive more revenue) try your hand at contextual targeting, i.e., the process of serving ads based on your game’s content. If, for example, you’ve developed a racing game, you might display ads for automotive ecommerce stores. 

We also suggest using rewarded video ads, which will increase user engagement by making your advertisements seem more personal and meaningful. Win! 

User-generated content monetization

Looking to improve your game’s engagement levels? You should definitely consider adding user-generated content (UGC) to your monetization strategy. 

What is UGC? Simple: it’s in-game content that your users create. 

Maybe one of your users makes a custom outfit for their avatar to wear, designs a new level, or builds a new kind of vehicle. The options available in your game will vary depending on your genre and the capabilities afforded to users, of course. But if you can give users the freedom to create their own game elements, you’ll be able to earn more revenue. 

This is true for two reasons. One, the ability to create custom content naturally boosts user engagement because users are able to actually participate in the way the game is constructed and/or played. And two, revenue sharing models will allow users to sell the in-game content they make for real-world money — and you, as the developer/publisher, can take a cut. 

Not every game can take advantage of UGC, but if you can provide tools and resources to users for content creation, all parties will benefit. 

Subscription models

Finally, we have subscriptions, which is a recurring revenue-based monetization strategy that can help your mobile game earn consistent income throughout the year. Because of this, you might want to consider pairing it with one or more of the other strategies outlined above. 

The subscription model is especially popular with online multiplayer games that allow users to access premium characters, levels, or items in exchange for a weekly, monthly, or annual fee. Note: the fee is usually less than it would cost to access all of the included perks individually. 

If you decide to use this monetization strategy, try offering a tiered subscription plan. For example, your users can pay $2 a month for an ad-free experience (a good benefit), $4 a month for tier 1 and exclusive content (a better benefit), or $6 a month for all the tiers plus early access content (the best benefit). Tiered subscription plans give users more control, which makes it more likely they’ll subscribe to your game. 

Just remember, to succeed with subscriptions, you need to provide regular updates and incentives for players. Otherwise, they won’t have anything new to gain from their subscription and will quickly cancel. This won’t help you grow consistent, reliable revenue. 

Evaluating and testing new strategies 

Implementing a new revenue strategy is one thing. Making sure it actually works is another. How do you go about this process in the most logical and efficient way? Here are a few ideas: 

  • Market research: First, conduct extensive research. Study your game’s genre to see how successful developers monetize their content. Then read through forums to see what actual gamers think of different games, why they like them, etc. 
  • User feedback: Next, contact your own users for feedback. What do they love about your game? What drives them up the wall? To entice users to leave feedback, give them an incentive, such as a free life, extra hint, or in-game currency. Once you receive user opinions, use them to improve your game and monetization efforts. 
  • A/B testing: You should also A/B test your monetization strategies. Doing so will help you determine which strategies drive the most revenue. It will also help you optimize your chosen channels so that you can achieve maximum success with each. 

At the end of the day, effective mobile game monetization relies on continual iteration. Test a new strategy or idea and adjust your approach based on the results. Then do it all again. 

Maximizing revenue with data and analytics in a privacy-conscious environment 

You can’t optimize your game’s monetization strategy without access to data. And you can’t get data legally unless you follow the numerous privacy-related rules and regulations in place. 

The GDPR in the European Union and the CCPA in California are the two most prevalent regulations you need to abide by. But there will be others since additional states in the US plan to roll out their own versions of the CCPA in the coming years. 

Fortunately, there are still options to attain user information. For example, your game can leverage first-party data (data that your game collects directly from its users) and use it for targeted advertising purposes. 

Once you receive your data, make sure you analyze it. Track the key performance indicators (KPIs) that pertain to your revenue goals. If you want to charge more for your available ad inventory, for instance, track and improve your daily active users (DAU) metric. 

It’s also worth mentioning that ad mediation platforms such as Chartboost Mediation make it way easier to optimize ad performance and produce additional revenue. With our platform, you can maximize eCPM and fill rate metrics for your games, while enjoying unbiased transparency

Contact us today to see our industry-leading platform in action. 

Adapting to changing trends and technologies

Last but not least, keep your ear to the ground. What new trends have developed in the mobile gaming industry? What about in your game’s specific genre? Are your competitors taking an innovative approach that you can emulate? Study the market to find out. 

We suggest exploring emerging technologies as well to see if you can get an edge. Maybe you can catch the augmented reality (AR) or virtual reality (VR) waves before other games in your genre. First-movers often achieve the most success in these situations. 

When you’re open to new ideas, willing to adapt to new trends, and committed to experimentation in every aspect of your game’s monetization, the sky is the limit. 

Uncover new ad revenue opportunities

The mobile games landscape is always changing. The developers and publishers that reach the top of the industry are always seeking out new ways to generate revenue. 

You’re now aware of multiple revenue opportunities that have the potential to produce serious income for your games. All you have to do is try them out. 

Pick a few ad revenue streams to experiment with, keep an eye on your numbers, and optimize your approach when needed. Then enjoy the extra cash flow your games produce. 

One more thing: your revenue ambitions should never come between your game and its users. If you fail to provide players with an enjoyable experience, you’ll never earn significant revenue. Find the balance between these two things to achieve your goals.