Monetizing non-gaming apps has long been a challenging endeavor for publishers and developers alike. With a plethora of myths and misconceptions surrounding ad formats, strategies, and revenue potential, it's easy to see why many hesitate to fully embrace advertising as a viable monetization strategy. However, the ad landscape for non-gaming apps is evolving, and understanding the realities can unlock significant revenue opportunities.
While games continue to dominate mobile revenue through in-app purchases, generating over $60 billion, according to AppMagic, non-gaming apps still capture a substantial $45 billion despite a significantly lower revenue per download (RpD) of $0.36 compared to $1.17 in gaming. This discrepancy suggests that non-gaming apps, which often have lower IAP potential, stand to benefit significantly from ad monetization—yet many publishers remain hesitant due to persistent myths about its effectiveness and impact on user experience.
This article aims to demystify the most prevalent myths in non-gaming app monetization and offer actionable insights for publishers to maximize their ad revenue. Whether you're a non-gaming publisher exploring new ad formats or a seasoned app developer looking to optimize your existing strategy, read on to discover how you can effectively leverage ads without compromising user experience.
One of the most pervasive myths is that non-gaming apps inherently generate less ad revenue than their gaming counterparts. This misconception stems from the high engagement levels typically associated with games, which are often assumed to translate directly into higher ad revenue.
The Reality:
While it's true that gaming apps have traditionally dominated ad revenue charts, non-gaming apps have immense untapped potential. The overall revenue generated during a user's lifetime depends heavily on user retention—a factor that is equally critical in both gaming and non-gaming apps. Beyond retention, the key lies in how effectively you monetize users during their time within the app.
Non-gaming apps have the advantage of leveraging multiple monetization models simultaneously. They can utilize in-app purchases (IAPs), subscriptions, and ads to create a diversified revenue stream. Ads, in particular, serve as an excellent tool to complement IAPs and subscriptions by monetizing the vast majority of users who may never make a purchase.
When examining factors such as effective cost per mille (eCPM) and engagement rates, non-gaming apps often perform on par with gaming apps. The potential for ad revenue in non-gaming apps is not just comparable but, in some cases, can surpass that of gaming apps when optimized correctly.
Another common belief is that non-gaming apps don't need to diversify their ad formats and can rely solely on traditional options like interstitial ads. This myth suggests that exploring new or multiple ad formats is unnecessary and may even disrupt the user experience.
The Reality:
Diversification is crucial for all apps, regardless of their category. Relying on a single ad format limits revenue potential and may not fully capitalize on different user engagement opportunities. Non-gaming apps can benefit significantly from incorporating a mix of ad formats, including interstitials, rewarded videos, and newer options like app open ads.
Often, developers focus on perfecting their existing ad setups, tweaking placements, and optimizing fill rates. While optimization is important, introducing new ad formats can lead to immediate and substantial revenue boosts with less complexity.
A prime example of successful ad format diversification is the eSound music app by Spicy Sparks. With the assistance of GameBiz Consulting, eSound implemented banner ads in addition to their existing ad formats. This introduction led to a remarkable 13.5% increase in ad average revenue per daily active user (ARPDAU). Banner ads quickly contributed to around 10% of the overall ad revenue. You can find our case study at this link.
Crucially, this revenue growth did not come at the expense of user experience. Store ratings remained stable, and there were no increases in negative reviews related to the ads. This case demonstrates that strategic diversification can enhance revenue without harming user satisfaction.
There's a notion that advertising games within non-gaming apps is ineffective because the user base is assumed to have little interest in gaming content. This myth leads some publishers to avoid lucrative gaming ad networks altogether.
The Reality:
The global gaming audience is massive and continually growing. According to Newzoo, there are approximately 3.4 billion gamers worldwide, accounting for more than 40% of the global population. Furthermore, 70% of smartphone users engage in gaming activities. The democratization of gaming through smartphones has broadened the demographic to include teenagers, young adults, adults, and even seniors.
With over half a million games available on major app stores, there's a game for every interest. Statistically, at least 70% of your app's users are likely open to playing mobile games, making them a relevant and valuable audience for gaming ads.
In practice, many non-gaming apps successfully use a mix of ad networks, including those focused on gaming. These apps often experience competitive eCPMs and achieve fill rates close to 100%. By excluding gaming ads, publishers may inadvertently limit their revenue potential and miss out on engaging a substantial portion of their user base.
The concern that introducing ads will deteriorate user experience is a significant barrier for many non-gaming app developers. The fear is that ads will disrupt functionality, leading to user dissatisfaction and churn.
The Reality:
Balancing ads with user experience is indeed a delicate task, but it's not exclusive to non-gaming apps, nor is it insurmountable. Success lies in strategic implementation and personalization.
Here are key strategies to achieve this balance:
Interestingly, ads can sometimes enhance user experience. For example, implementing rewarded video ads can lead to increased retention and longer session durations, as users gain more value and engagement opportunities within the app.
Monetizing non-gaming apps through advertising is not only feasible but can be highly profitable when approached strategically. By debunking these common myths, it's clear that non-gaming apps have significant potential to generate ad revenue comparable to gaming apps. Diversifying ad formats, embracing gaming ads, and carefully balancing user experience are all critical components of a successful monetization strategy.
App developers and publishers should feel encouraged to explore and implement ad monetization strategies tailored to their unique user bases. The key is to remain user-centric while leveraging the full spectrum of ad opportunities available.
If you're ready to unlock your app's full revenue potential but unsure where to start, GameBiz Consulting is here to help. Our expertise in ad monetization strategies has helped apps like eSound achieve significant revenue growth without compromising user satisfaction.
Contact GameBiz Consulting today to set up your ad monetization strategy for success. Let's work together to transform myths into opportunities and elevate your app to new heights.
