In-app Ads vs. Data Monetization: Which One Is Better?tips, best practices October 12, 2018 • 12 min read
In 2018 mobile apps drew great interest, not only from users tapping on their devices seven days per week but also from advertisers. After comparison of the results driven by in-app and web ad campaigns, advertisers started to massively shift their marketing budgets to mobile apps. In-app inventory is considered to be the highest quality and best-working in terms of ad performance. Given that, the rates for in-app impressions increased, and the new ways of app monetization appeared.
In this article, we'll compare two options that help app developers make money with their mobile apps — in-app monetization with ads and data monetization. While in-app ads have earned a reputation as a scalable revenue-driver, data monetization is just starting to pick up the pace.
Let's look "behind the scenes", explore their strengths, hidden pitfalls and decide which one is better for you to effectively monetize your app.
In-app ads: the real pros and cons
In-app ad monetization is the first and foremost option that comes to mind when app developers decide to start earning with their apps. In 2017 over 65 % of app developers with their apps featured in app stores, preferred monetization with ads than any other monetization models
In-app ads or traffic monetization with ads means running, managing, and the optimization of ad campaigns in your app. By showing ads, you can generate revenue streams coming from demand platforms, ad networks or brands.
Enjoy these excellent statistics: App Annie forecasts that by 2021 the mobile app industry will reach an astounding $206 billion invested in in-app advertising. As a comparison, in 2016 advertisers shelled out $72 billion on in-app ads. These numbers mean that mobile apps attract more marketing budgets than web inventory or even TV.
Unsurprisingly, this year mobile ads are expected to prevail over other digital ad formats too. With its 51% share of the total digital ad spendings, the mobile industry keeps growing.
Speaking of specific apps, a recent eMarketers research came out with some splendid stats about Pinterest. The app is going to overstep $500 million in ad income this year (+ 43.8 % compared to 2017). Do you still believe you can't hit a jackpot with your mobile app?
Drawn up by the Chocolate ad mediation platform, an insightful survey has shown that over 54% of app developers are willing to try ad mediation for generating bigger revenue stream from their apps
If you are ready to give ads a chance, you should know the pros and cons that come with it:
1In-app monetization with ads is the highest-paying monetization method for mobile apps.
1If you want to boost your revenue with ads, you'll have to keep an eye on everyday ad optimization.
2You can switch on mobile ads even with a small number of DAU.
2You'll need to dive deep into ad mediation. Usually, one demand partner is not enough to fill 100% of your traffic at competitive rates. So you'll need to run tests, mix ad partners and analyze performance in order to find the best-working combination.
3Your revenues will keep growing along with an increase of your users base.
4You can always scale your payouts by adding high-paid ad formats (like native ads, rewarded videos. etc).
3Users are often skeptical about online ads. Low quality or pervasive ads can annoy and distract. What's worse, they can make users stop using your app and never come back.
5By running data-based ads, you can help your user find products and services they'd love to try.
6Your traffic is highly demanded today so you'll easily be able to find the platform or partner to monetize your traffic with.
To succeed with in-app monetization, you should invest quite a lot of time and efforts. While being knee deep in their work, app developers often delegate ad mediation and optimization to full-service platforms like Epom Apps.
Read our pre-monetization checklist to get your app ready for a killing in-app monetization.
Data Monetization: Strengths and Pitfalls
It's hard to overestimate the real power of data in our data-driven world. Data is able to reveal extensive insights that marketers, research institutes and product companies find useful.
A burst of the interest to users' data gave rise to data monetization of mobile apps. Data monetization is the process of collecting, segmenting, and processing of users' data. For app developers, this is an alternative opportunity to capitalize on users that doesn't require extra efforts.
What's even more important, data collectors don't gather sensitive or private information. As a result, all users stay anonymous and protected.
Among the basic parameters that data collectors usually gather are:
- Device type;
- Devise version;
- Screen size;
- Mobile Operator;
- Network type;
- CPU Core number;
- RAM, ROM;
- IP address.
Monetizing your data is even easier than going live with in-app ads; you should simply insert one SDK to your code.
Before tapping into data monetization, ask your users whether they don't mind sharing their non-personal information.
Data Monetization boasts its explicit strengths:
- Data monetization is a safe and scalable revenue-driver.
- After one-time SDK integration, you won't have to put any additional efforts into the process. Everything works properly from the beginning.
- The data collection takes place in the background, so the user's experience stays untouched.
- You will have enough time to concentrate on your work while earning money with your app.
- From month to month you'll get paid for every user who agreed with data collection. The more DAU/MAU you have, the higher the payouts.
- Data monetization won't harm your existing SDKs and monetization model that you've applied before.
But it also has some pitfalls to be aware of:
- Your app should reach at least 50k DAU to attract data collecting companies and drive descent profits.
- Before adding the SDK, always negotiate the parameters that the data collector is going to gather. Make sure that the list doesn't include any personal info and sign up the IO.
- Many users still take a dim view of data collecting. Be ready for users that may refuse to share their data, but that's OK.
Recently TheGuardianApp team revealed information about some popular mobile apps that secretly shared user's location to third-party data collecting companies. They gathered data about the devices battery status, GPS precise location, and other sensitive parameters.
Check out this list of companies to be sure you won't do an ill turn to your users and yourself.
All in all, both in-app ads and data monetization are tried and proven methods of earning money with mobile apps. If you can't decide which one to try first, go to the app store and look up how similar apps monetize their traffic.
You can also monetize your app with ads and data simultaneously. Two SDKs won't compete with each other. Just keep in mind that the overall success of your app depends on your users. So stay transparent and respectful with your audience.
Join our FREE webinar for Android app developers on Oct, 23 to discover more non-obvious ways to drive extra revenue to your mobile app.