Field note · December 19, 2022
The Most Common Ad-Monetization Mistake
One common 'mistake' I see with clients? Rejecting ad monetization (Interstitial & RV) without fully considering the tradeoffs.
Some common framings, and my devil's advocate 2c
"Our plan is just IAP monetization. If that doesn't work, we'll consider ads." - Game Team
Me: From a business and first-principles perspective, deliberately choosing $0 revenue from 95%+ of users seems suboptimal. You CAN do better than that.
"We're worried about ads driving away spenders." - Game Team
Me: Segment the audience. Delay interstitials in T1 Geos until D3-D7 by driving self-selection with a juicy starter offer. 'No ads for anyone' seems unlikely to be the optimal tuning.
"Our top-grossing competitor doesn't have ads." - Game Team
Me: Even if your top-grossing competitor is ROAS-positive with $0 revenue from 95% of users, I wouldn't conclude that this is the best strategy for YOU, in the current UA environment.
"We'll probably need ads, but we want to really dial-in our IAP monetization first." - Game Team
Are you sure it makes sense to prioritize a 5% ARPU lift over a 15-40% ARPU lift? If you take an ROI-first approach to feature selection, you will likely find that first-pass ad monetization tops your list, since it generates revenue from 95% of your users (non-spenders).
It's worth drawing a distinction between RV and Interstitials since the latter is what tends to push developers' comfort zones.
I find that teams often resist Interstitials for personal / philosophical, rather than business reasons, e.g. "As a player, I hate forced ads."
While not without merit, these feelings (which, FWIW, I share) don't necessarily reflect 100% of your target audience. With a little segmentation, you may be surprised how little retention and IAP revenue are affected by Interstitials.
If I could leave skeptical studios with one recommendation it's to test and let the data inform the decision: a small-scale test will bring light to the tradeoffs involved.
NOTE: I have no financial incentive (other than monetization growth for my clients) to push ad monetization, so, of course, you should make the best decision for your product and lifecycle stage.
Turbine helps mobile game & app publishers drive UA and product KPIs.
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