In-app Advertisement Auction Innovation drives ARPDAU up 30%
New ideas brought about by new technology. Grape Jun once heard from industry insiders that in order to maximize the monetization benefits, developers usually need to access multiple advertising platforms, and the number of access can be more than one, and management and maintenance costs will also rise. Therefore, in an environment where the difficulty of obtaining traffic is high, if you want to improve the monetization efficiency, on the one hand, you must reduce the cost of human operation and maintenance so that you can use your energy to polish and optimize game development, on the other hand, you must increase your own premium opportunities化 ARPDAU. Compared with large manufacturers, these two points are particularly important for small and medium-sized teams and game studios.
However, there are indeed no small challenges in how to improve the monetization efficiency and self-premium under the premise of controlling labor costs. Waterfall is currently the mainstream mode of mobile advertising. In this mode, developers always have to invest manpower to set the priority of advertising auctions. Besides, there is not enough control and discourse in traffic sales, which detracts from certain potential revenue.
The above situation has become a new problem encountered by developers in the realization of advertising. In this context, a name of “auction in the application (an In-App Bidding ) mobile cash solution”, and has begun to be adopted by the world’s large and small developers.
Developers may have early contact with this technology. As a new monetization strategy on the mobile terminal, it has the advantages of labor saving, data transparency, maximum revenue, fair bidding and other aspects. According to Grape Jun, domestic developer You Daoyi has used this technology to reduce the operating costs of managing multiple advertising platforms, and allowed the installation of more than 200 million “Crazy Zoo” to achieve 12% of ARPDAU ( The average revenue of daily active users) increased, and 59% of its advertising demand came from bidding partners. In addition to this, they also reduced a lot of operating costs.
So, how does in-app bidding technology solve developers’ pain points? How does it effectively increase developer income?
How the new model solves pain points
To overcome the two major pain points in maximizing monetization, the method is actually very clear: one is to automate the work of optimizing advertising inventory, and the other is to increase the premium opportunity for advertising space.
In-app bidding can help developers achieve these goals. It is a programmatic trading technology based on developers’ self-realization needs . Its operating principle is equivalent to bidding: the developer is the auctioneer and sends the advertisement display opportunities to multiple potential demanders at the same time. The demanders conduct fair auctions in accordance with the “highest bidders” rule.
Principles for implementing in-app bidding
From initiating a bid request to completing ad placement, the entire ad slot auction process takes place immediately.
From a developer’s point of view, this model has the following advantages: In addition to automation, advertising inventory can be bid in real time on multiple advertising networks; secondly, the increased competitiveness of resources also disguised the profit of traffic monetization basis. In general, the developer’s initiative and voice are greatly improved in this set of monetization models.
As a programmatic bidding technology, in-app bidding has actually been applied in the realization of advertisements on the web. It starts with the “Header Bidding” solution in the realization of advertisements on the web-website developers will embed code in the header of the webpage to send requests to advertisers for inquiry and bidding.
With the development of technology in recent years, many companies are migrating the head bidding model to the mobile platform. AppLovin’s MAX is one of the earliest in-app bidding solutions in the industry. The product was put into testing in early 2019 and was officially launched on September 16.
Before the emergence of in-app bidding, “Waterfall” was the mobile advertising transaction model used by most developers. The reason why the new technology is proposed today is precisely to solve the limitations of the traditional model.
Three disadvantages of the traditional model
Waterfall is a set of mature advertising transaction model. In this mode, the developer will set ad fill requests hierarchically according to historical eCPM bidding data. When the demand for high-price ad fill is not responded, Waterfall will automatically send ad requests to the next level in sequence.
Schematic diagram of advertising transactions for waterfall and in-app bidding
Waterfall is also a programmatic advertising transaction technology. For developers, its advantage is that it can improve the advertising fill rate; correspondingly, for the advertising platform, it can get bidding opportunities in the high, medium and low layers of the waterfall. However, due to the limitations of its inherent mechanism, there are three main problems with the waterfall model:
First of all, the biggest limitation of this model is that it may set up a layered request mechanism based on the average value of historical prices, which results in opaque monetization data and the demand side cannot access more advertising inventory.
In fact, the demand-side bid is not fixed. It may temporarily issue a higher eCPM because it wants to obtain a high-quality display opportunity. However, due to the low historical bid, the demand side can only participate in the auction within a fixed bidding interval. Advertisers ’limited bidding opportunities also mean the loss of potential developers’ revenue.
In addition , due to the problems of the above mechanism, the sorting and optimization of waterfall flow also becomes complicated and cumbersome. It often requires developers to invest in manual maintenance. For small and medium-sized teams, this may be the most expensive time and labor cost.
In addition, the manually set mechanism and interval request will affect the return speed of the advertisement. The more the Ad Network layer in the waterfall stream, the higher the probability of the occurrence of advertisement delay and no advertisement return.
The in-app bidding solution solves the deficiencies of waterfalls. The former is a programmatic trading technology, so it reduces the manual input of developers; it allows the demand side to conduct public bidding, so everyone has the opportunity to participate in the auction, and the realization data is more transparent; The problem of delaying the return of advertisements has also been reduced.
Let’s look at a case. Geisha Tokyo is a game developer with just over 30 employees in Tokyo, Japan. Its casual game “Traffic Run!” 》 Over 4.9 million downloads were made in the world last May. In order to further expand game revenue, Geisha Tokyo switched its monetization mode to in-app bidding.
According to Grape King’s understanding, the new monetization structure finally let “Traffic Run!” 》 The ARPDAU growth rate exceeded 30%. Geisha Tokyo has subsequently used in-app bidding in other popular games such as “Dinosaur Rampage”, and revenue has improved.
How to maximize the realization of income through new technology?
As far as optimization work is concerned, waterfall flow has already added a lot of costs to developers. In terms of maximizing revenue, it is also unsatisfactory. The operation of in-app bidding is fully automated, and its bidding mechanism also gives developers more premium opportunities. These may be the reasons why new technologies are favored.
Programmatic bidding
So, how can developers use in-app bidding to break the revenue bottleneck? In the view of Grape King, for most developers, the realization of technology is tantamount to making a new choice: developers need to choose an advertising aggregation platform that supports in-app bidding.
Grapevine noted that AppLovin has recently taken many actions in bidding and is one of the earliest global platforms in the industry to start in-app bidding. They officially launched the in-app bidding solution MAX in September last year. It is worth mentioning that, while supporting in-app bidding, the solution is also compatible with the waterfall layered model. Under the combination of the two technical solutions, the hybrid mode has also become one of the advantages of MAX.
In fact, before connecting to the new platform, developers may face a problem of transitioning to the new model: not all mainstream advertising alliances support the implementation of bidding. In order to continue to cooperate with the existing advertisers, developers may also need to continue to use existing monetization methods.
In order to facilitate developers to seamlessly transfer from existing monetization methods to in-app bidding, the AppLovin platform has launched A / B testing tools. This feature allows developers to compare bidding and waterfall flow stratification, so as to see the changes in revenue in the two modes, and the results of the comparison will help developers optimize the monetization strategy.
The aforementioned Japanese developer Geisha Tokyo has passed the A / B test to obtain more bidders in the in-app bidding and waterfall flow models. This makes “Traffic Run! 》On the premise that a 10% increase in revenue has been achieved, an additional 21% ARPDAU value has been added.
So in the end, developers still have to look at how many ad networks participate in the auction on the aggregation platform. After all, the more intense the competition, the higher the potential revenue. It is reported that AppLovin’s MAX has aggregated more than 20 advertising networks such as Facebook Audience Network.
It can be said that developers of any size can benefit from in-app bidding. For small teams, the value of this technology may be greater. Because in the traditional monetization mode, they may have no conditions to maintain numerous monetization platforms.
Let’s look at another case. Tripledot Studio is a small studio with less than 30 people in London, England. Their main product is a card game “Solitaire”. For this team, how to reduce the workload of maintaining waterfall flow is a big challenge, because they need more time and energy to focus on game development and optimization.
Tripledot finally liberated manpower through in-app bidding. They also found that the number of impressions received by the game also increased, and ARPDAU increased by 20%.
In-app auctions will become a trend
Since last year, voices related to in-app bidding have continued to flow into the industry from overseas. Grapevine learned from AppLovin that, based on their data, many overseas game publishers have achieved revenue growth for several months through in-app bidding.
Although domestic developers are not widely used, the mainstream monetization platforms are pushing new technologies. I think it will definitely become a trend in the future. In this regard, the person in charge of MAX said in an interview last year, “In-app bidding technology is the general trend, and the entire mobile game application ecosystem will benefit from in-app bidding.”
The reason for a win-win situation lies in the two major advantages of new technologies: programmatic and transparent bidding. For advertisers, he can obtain cross-platform ROAS (total return on advertising expenses) data; for developers, he can save labor through new technologies, reduce operating costs, and maximize revenue.
However, there are still challenges in the popularization of new technologies. In the early stages of technological development, developers cannot easily change their inherent monetization thinking. This process always takes some time. But if you try a new technology, you may be able to find a new way of realizing it.
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