Data Monetization vs. In-app Ads: Pros & Cons for App Developers

Partner Post - Epom Apps Market Best Paying Ad Network

Posted: October 16, 2018

Today users invest over $86 billion in mobile apps, but the bigger point is this – apps attract advertisers budgets. After discovering astounding results driven by in-app ad campaigns, advertisers started to massively shift their focus to mobile apps. App Annie forecasts that by 2021 in-app advertising spendings will triple and reach a record $201 billion compared to $72 billion in 2016. This is why rates for in-app impressions went up, and the new app monetization strategies appeared.

In this article, we’ll review the pros and cons of two app monetization strategies that help developers make money with their mobile apps – in-app ads and data monetization. While in-app ads have already caught on, data monetization is just gaining its pace.

Data Monetization

The recent burst of the interest to users’ data gave rise to data monetization of mobile apps. For app developers, data monetization is an alternative opportunity to capitalize on users that doesn’t require additional efforts.

Data monetization is the process of collecting, segmenting, and processing of users’ data. In our data-driven world data is able to reveal extensive insights that marketers, research institutes and product companies find useful.

It’s important to emphasize, data collectors don’t gather sensitive or private information. As a result, all users stay anonymous and protected. Before tapping into data monetization, always ask your users whether they OK about sharing their non-personal information.

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;
  • Country;
  • IP address.

Monetizing your data is even easier than going live with in-app ads; you should simply insert one SDK to your code.

Data Monetization has 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.
  • 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.

In-app ads

In-app monetization with ads remains one of the most popular and profitable options to monetize mobile apps. By showing ads in apps, app developers can generate revenue streams coming from demand platforms, ad networks or brands.

In 2017 over 65 % of app developers, preferred monetization with ads than any other monetization models.

With its 51% share of the total digital ad spendings, this year mobile ads are expected to beat other digital ad formats. App developers started opting for ad mediation more frequently. Ad mediation is the ad monetization with a number of different ad partners added to the app.

Drawn up by the Chocolate ad mediation platform, an in-depth survey has shown that over 54% of app developers are willing to try ad mediation for generating a bigger revenue stream from their apps.

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If you are ready to try in-app ads too, you should know the pros and cons that come with them:

Pros:

  • In-app monetization with ads is the highest-paying monetization method for mobile apps.
  • You can switch on mobile ads even with a small number of DAU.
  • Your revenues will keep growing along with an increase of your users base.
  • You can always scale your payouts by adding high-paid ad formats (like native ads, rewarded videos. etc).
  • By running data-based ads, you can help your user find products and services they’d love to try.

Cons:

  • If you want to boost your revenue with ads, you’ll have to deal with everyday ad optimization.
  • You’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.
  • Users 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.

You should invest quite a lot of time and efforts to succeed with ad monetization. While being knee deep in their work, app developers often delegate ad mediation and optimization to specific full-service platforms. For example, after the in-depth analysis of your audience and your app, Epom Apps team will suggest the best-suited demand partners and ad formats. The platform takes care of everyday precise optimization and helps keep fill rate and competitive rates under control.

To sum up, in-app ads and data monetization are effective methods of earning money with mobile apps. If you can’t decide which one to try first, go to the app store and check out how similar apps monetize their traffic. You can also monetize your app with ads and data simultaneously as two SDKs won’t compete with each other.

Just remember that app monetization is impossible without users and their interest in your product. So keep perfecting your app, keep treating your users, and most of all do your best to stand out.

Join FREE webinar for Android app developers on Oct, 23 to discover more non-obvious ways to drive extra revenue to your mobile app.