According to Gartner, more than 130 billion apps will be downloaded onto phones and tablets in 2014, and most of them will be free. At the same time, revenue from apps is expected to grow by over 200% in the next 4 years. That may sound contradictory, but the reason has been clear to many developers for some time: while the first app economy was predominantly focused on paying for apps up front, we’re now seeing the rise of a second app economy, the era of free apps and incremental payments.
In this second app economy, the currency of success has altered significantly, centered on three critical areas:
1. Google Analytics now directly available in AdMob.
We introduced mobile app analytics in mid 2012 and there are hundreds of thousands of app developers using it already. We've now built Google Analytics directly into AdMob so developers can understand how people are using their app, segment them based on behavior in just a few clicks, then act on those insights. For example, the Google Analytics ecommerce report shows key insights into in-app purchases: top items sold, overall revenue and average order value. Now that Google Analytics is built directly into AdMob, developers can have a holistic view on their monetization based not only on revenue from ads but also on in-app purchase performance. All these functionalities have been incorporated into the updated Home tab in AdMob, making it a one-stop shop for all your performance reports.
2. In-App Purchase Ads.
To help developers promote in-app purchases to users in a more relevant way, we're also introducing in-app purchase ads. A developer can use these ads to promote in-app items at the right time to the users who are most likely to make a purchase, while still showing AdMob ads to those who aren't. Segmentation tools enable developers to quickly find these users, and then in-app purchase ads can be used to build relevant interstitial ads to reach them. For example, a developer can discover which of their users began playing their game in the last 48 hours, and promote a ‘welcome pack’ of extra lives at a 50% discount. This creates a more customized experience for users and can help prolong engagement. A developer can also choose where to place these interstitial ads in their app, and they can appear in either portrait or landscape mode.
3. Ad network optimization and Live CPM.
If a developer is using more than one ad network to monetize their apps, a mediation tool helps to manage them. However, these tools may not optimize for the highest revenue. To solve this, ad network optimization obtains the most up-to-date CPMs from ad networks in the AdMob mediation stack, and requests ads from the highest paying one.
Live CPM goes one step further to ensure developers earn the most money from their ad impressions. When a developer uses AdMob to monetize, they get real-time access to all of Google’s demand sources, including programmatic demand, via our integration with DoubleClick Ad Exchange. For each ad request, Live CPM compares the highest CPM a developer can get from Google’s demand sources, with the CPM they could get from other networks in their mediation stack. If a higher-paying ad is available from Google’s demand sources, it will serve that ad over lower-paying CPMs offered by the other networks. App developer iHandy Inc. began using Live CPM in February this year. Many apps' revenues increased at different rates, and certain apps achieved a 200% increase.
4. The App Developer Business Kit.
The App Developer Business Kit is an in-depth website designed to help app developers understand ways to build a successful business. For example, there are detailed chapters about building an app, different ways to earn money, and options for marketing your app. You can also check out the interviews with developers, read case studies and view market insights from AdMob surveys which give developers a head start into building apps for global users. For example, did you know that a third of smartphone gamers in China have spent money in apps to personalize characters?
Tune into Google’s GDC livestream today at 10AM PST. We have sessions for game developers all day, and the AdMob talk is from 12-12.30PM PST.
Posted by Jonathan Alferness, Product Management Director, Google
In this second app economy, the currency of success has altered significantly, centered on three critical areas:
- Understanding audiences: Developers should be able to segment their audiences based on in-app behavior and turn data into useful insights for better monetization.
- Growing in-app purchase revenue: According to Gartner, soon in-app purchases will account for almost half of all app store revenues, but this model requires a sophisticated approach from app developers and the right tools haven’t been available.
- Maximizing ad revenue: Developers shouldn’t have to worry about managing ads; ads should optimize themselves, in real time, so developers can focus on other important parts of their business.
1. Google Analytics now directly available in AdMob.
We introduced mobile app analytics in mid 2012 and there are hundreds of thousands of app developers using it already. We've now built Google Analytics directly into AdMob so developers can understand how people are using their app, segment them based on behavior in just a few clicks, then act on those insights. For example, the Google Analytics ecommerce report shows key insights into in-app purchases: top items sold, overall revenue and average order value. Now that Google Analytics is built directly into AdMob, developers can have a holistic view on their monetization based not only on revenue from ads but also on in-app purchase performance. All these functionalities have been incorporated into the updated Home tab in AdMob, making it a one-stop shop for all your performance reports.
2. In-App Purchase Ads.
To help developers promote in-app purchases to users in a more relevant way, we're also introducing in-app purchase ads. A developer can use these ads to promote in-app items at the right time to the users who are most likely to make a purchase, while still showing AdMob ads to those who aren't. Segmentation tools enable developers to quickly find these users, and then in-app purchase ads can be used to build relevant interstitial ads to reach them. For example, a developer can discover which of their users began playing their game in the last 48 hours, and promote a ‘welcome pack’ of extra lives at a 50% discount. This creates a more customized experience for users and can help prolong engagement. A developer can also choose where to place these interstitial ads in their app, and they can appear in either portrait or landscape mode.
In-App Purchase Ad
3. Ad network optimization and Live CPM.
If a developer is using more than one ad network to monetize their apps, a mediation tool helps to manage them. However, these tools may not optimize for the highest revenue. To solve this, ad network optimization obtains the most up-to-date CPMs from ad networks in the AdMob mediation stack, and requests ads from the highest paying one.
Live CPM goes one step further to ensure developers earn the most money from their ad impressions. When a developer uses AdMob to monetize, they get real-time access to all of Google’s demand sources, including programmatic demand, via our integration with DoubleClick Ad Exchange. For each ad request, Live CPM compares the highest CPM a developer can get from Google’s demand sources, with the CPM they could get from other networks in their mediation stack. If a higher-paying ad is available from Google’s demand sources, it will serve that ad over lower-paying CPMs offered by the other networks. App developer iHandy Inc. began using Live CPM in February this year. Many apps' revenues increased at different rates, and certain apps achieved a 200% increase.
4. The App Developer Business Kit.
The App Developer Business Kit is an in-depth website designed to help app developers understand ways to build a successful business. For example, there are detailed chapters about building an app, different ways to earn money, and options for marketing your app. You can also check out the interviews with developers, read case studies and view market insights from AdMob surveys which give developers a head start into building apps for global users. For example, did you know that a third of smartphone gamers in China have spent money in apps to personalize characters?
Tune into Google’s GDC livestream today at 10AM PST. We have sessions for game developers all day, and the AdMob talk is from 12-12.30PM PST.
Posted by Jonathan Alferness, Product Management Director, Google