Leveraging psychology, data, and analytics for profitable ad placement

December 6 · Nick Schultz · 9 Min read
Delving into user behavior and motivations gets to the core of driving engagement through ads, whether deciphering why a player chooses one ad format over another or uncovering the triggers behind in-app purchases. Use data and analytics to reveal insights into user behavior, preferred ad types, and the most opportune moments for placements. Create your strategy to nurture player engagement while yielding tangible monetary results.

Find the answers you need

Human psychology is critical to making engaging, profitable mobile games. Understanding behavior and motivation lies at the heart of driving user engagement with an ad. If you can ascertain why players click on one ad format, such as rewarded video, over another, or what motivates them to make an in-app purchase, you’re well on your way to a great game that is profitable. 

Tapping into data and analytics allows you to experiment and uncover the information you need. These tools can help you understand how much time users spend in your game, the types of ads they’re clicking on, and when. And that’s just the tip of the iceberg. 

Soon you will be able to identify patterns and trends that indicate the best times, ad formats, and placements for ads. It all adds up to a more effective ad mechanism that helps players stay engaged in your game while driving monetary results

Read on to learn how to use data and analytics to inform your ad placements and pricing strategy. 

Various types of ads

If you’re new to the mobile ad world, welcome. 

There are a handful of basic ad formats you should be aware of for your mobile games. 

Banners are rectangular ads at the top or bottom of a mobile screen. They are often static images but also can be animated. 

Interstitials are full-screen ads that are considered to be more intrusive than banner ads but also more effective at grabbing attention. 

Video ads play a short video clip that can be skippable or non-skippable. 

Playables allow users to interact with a mini-game or demo. They are great at engaging users and promoting your app. 

Rewarded ads reward users for completing a specific action, such as watching a video or playing a game. 

Metrics to master: CPM, eCPM, CPC, CPI 

Which ad formats should you use? Start by tracking users and keeping tabs on key metrics. Cost per mille (CPM), cost per click (CPC), and cost per install (CPI) are the most common ways for advertisers to purchase inventory in mobile games. 

CPM is the amount an advertiser pays for every 1,000 ad impressions within your game. If you’re monetizing with in-app advertising (IAA), CPM tells the advertiser how well your inventory is performing. eCPM (effective CPM) shows the publisher how much ad revenue is generated from an average of 1,000 impressions. 

The goal is to have high eCPMs. 

Most inventory is sold on CPM because most advertising monetization platforms default to a CPM model for payouts. 

CPC is the amount an advertiser pays for each user who clicks on their ad within a mobile game. There is also cost per action (CPA), which is the amount an advertiser pays for a user who performs a specific action (sometimes called a conversion or an in-app purchase) through an ad placed in the game. 

CPI is the amount an advertiser pays for each install via an ad they placed in your mobile game. 

CPIs are user acquisition (UA) campaigns in which a fixed or dynamic price is set each time a user installs the advertised game. CPIs are tied to your monetization strategy and depend on several factors, such as countries, platforms, and app categories. 

Advertisers like CPIs because they aren’t interested in paying for traffic because traffic doesn’t necessarily convert to actual users. High volumes and traffic are more relevant for CPM and CPC metrics. 

CPA is chosen by the advertiser. It doesn’t rely on CPIs and is a less risky metric for advertisers than a CPI because they won’t lose money on the players who quickly drop out or delete the app. However, due to hybrid monetization strategies that utilize both in-app purchases and IAA, advertisers may find it more simple to use CPI. 

The results of key metrics like CPC, CPI, and CPA will help guide you in choosing the best place and format for an ad to appear on the user’s screen. It’s a balance — you don’t want to disrupt players at key moments in the game, but you are trying to catch their attention. A well-planned mobile ad placement strategy leads to more clicks, better user experience, and more revenue. 

Personalization and ad placements 

A study revealed that 80% of customers are more likely to make a purchase when a company provides a tailored experience. Ads that align with a player’s interests and enhance their overall experience help increase click-through rates (CTRs), brand loyalty, and increase revenue. 

The placement of when and where ads appear on screen matters. Keep in mind the following factors that also affect an ad’s placement and viewability, which indicates whether your ad is being viewed by a real person: 

  • Page load times 
  • Responsiveness of page design 
  • Ad size 
  • Ad layout 

Viewability gives advertisers a better understanding of ad performance from a budgetary standpoint. 

If an ad is too large or placed in a spot that is difficult to engage with, you may see lower CTRs. A strong placement strategy supports personalization efforts and unpacks player behavior and purchase tendencies. This is why tracking your key performance indicators and metrics — including CTR, CPM, and CPC — is important. 

Length of time for an ad

Are your ads too long or show up too frequently? If so, your players may experience ad fatigue and drop out of the game or uninstall completely. 

You may consider interstitial ads that completely take over the screen to be shown on a player’s first day after installing your game. Or you could use them during organic breaks within the game. 

Examples of placements for rewarded videos

Rewarded ads are a great way to provide value for a player, enhance the game experience, and boost engagement and profitability. There are various rewarded ads, but the most common type is video. 

Players watch a rewarded video to grab an extra life, gain access to a secret key, or understand how to forge ahead in the game. Rewarded video ads, combined with the right placements based on where the user is in the game, can be really effective. 

Monitoring the timing of when rewarded videos are displayed can help you understand what events prompt more player engagement (or less). Utilizing natural breaks in a game versus showing one in the middle of gameplay is less disruptive. For example, place an ad offering a reward of coins or an extra life after a level completion to keep players motivated. Or give them a reward at the start of their play session just for logging in or to boost confidence in their gameplay adventure. 

Videos also can entice players to receive more coins, receive discounts for future purchases, or help unlock new characters, levels, and/or abilities. 

If you offer freebies, make sure they are less valuable than in-app purchases. Keep players engaged and moving through your game just enough but also keep them interested in paying for a premium offering down the line too. 

Data and analytics to inform ad placements and pricing 

Data and analytics continuously report what drives the most engagement, which should influence your ad placements. 

When you track user behavior at different points in gameplay, you’ll start to see which ads drive more clicks and engagement. For example, you might discover that users are more likely to click on ads when they’re stuck on a certain level or about to reach a new milestone. 

Different ad formats carry different prices, so gathering this data can help you understand how to best allocate your advertising budget. 

A/B test to understand a player’s willingness to pay 

Split testing, or A/B testing, compares two options so you can analyze the results. It removes the guesswork and instead relies on data and hard numbers to decide how much to spend on certain ads and where to place them. 

Before beginning your A/B test, set your objectives and key performance indicators (KPIs) or metrics that will answer your questions about the most optimal ad placements. Remember CPMs and impressions? Try forming your test around those metrics. 

Check your daily active users (DAU) by dividing the total number of impressions by the number of active users. For example, for rewarded videos, if your impressions are low but the usage rate (how many ads a player sees per day) is high, you may want to change up some of the creatives — perhaps animate CTA buttons or use a different color so they stand out more. 

Another metric to test is engagement rate. Going back to rewarded videos, if engagement rate is still low even though you made changes to the creatives, it may be that players simply aren’t seeing the value in the ad. This might be an opportunity for you to test different types of rewards, such as currencies and the amount of reward. 

A/B testing also can be used to test ad frequency and duration. See where players drop out or if your ads aren’t blending seamlessly with your user experience. 

And when choosing your KPIs, don’t make the mistake of looking at clicks only. Focus on down-funnel metrics and what occurs after the click, including purchases, installs, and registrations. 

Remember to segment groups based on behavior and test consistently to turn your data into concrete next steps. 

Final thoughts

Tailor ad types and placements based on your players’ needs, preferences, and behaviors. If they see and understand the importance and usefulness of what you offer, they’ll click and engage. Once you’ve accomplished that, a lift in your numbers and revenue will follow. 

Test to see what resonates to find your perfect balance that minimizes game disruption while helping them along in their adventure. 

How can Chartboost help with your ad placement strategy? Reach out and we can help maximize your ad revenue.