Let’s talk about Hybrid Monetization

Hybrid monetization is the mixture of different methods in mobile apps when trying to monetize. Hybrid monetization combines in-app advertising and in-app purchases in order to maximize an app’s revenue. Increasing the LTV (Life Time Value) of the users of an app is the main KPI by combining different monetization approaches by utilizing numerous combinations of monetization formats.

During 2020, in-app purchases consisted of 43% of the mobile gaming revenue and 21% of non-gaming apps’ revenue. App developers are constantly looking for different ways to App developers, are constantly looking for different ways to monetize the content using formats such Rewarded Videos & Rewarded Surveys.

The app market has become quite competitive over the last few years, while found developers have found new ways to deliver ads within their apps and diversify their monetization strategies. However, what remained the same, was the necessity of an app to properly fit any advertisement format with the user experience of the app, in order keep a good level of engagement and retention.

A perfect example of hybrid monetization which combines several formats within its virtual economy is the following trivia game. The player is able to earn rubies (the virtual currency of the game) for exchanging them for word hints within the game. A user can earn rubies by either paying a specific amount (in-app purchases) or by utilizing the free options: Rewarded Videos, Rewarded Surveys & other offers.

Below are presented some of the key formats that are commonly used the Hybrid monetization today both in gaming & non-gaming apps in the mobile industry:

In-App Purchases

A user would access certain features of an app or get extra coins for example by paying a specific amount. Usually, a small proportion of users would exchange a small number of dollars within an app & they prefer to utilize one of the other options that are listed below.

Rewarded Videos

As the ad industry evolved, more and more developers utilized rewarded videos within their virtual economies. Rewarded videos have created a unique value proposition for all parties: publishers were receiving an attractive payout & an opt-in format with a nice user experience. A user would opt-in to watch a rewarded video of 30 seconds in exchange for extra coins within a game or to earn free talk time in a calling app.

Passive Ads

A few years ago mobile apps were fully covered with Banner Ads, which were covering the top or bottom of the screen. Usually, they appear as a video, text, or image. Banner Ads are characterized as a passive ad experience and the user does not need to take any action. This format is suitable for apps & games that possess a high volume of traffic since they are based on impressions.

Interstitial ads are a full-screen format, overlays within the app, and are more engaging compared to banner ads. Interstitials are quite popular within mobile games since they are used as a natural break within a game. Usually, interstitials do not have the number of impressions that banner ads have, but they generate higher eCPM rates.

Rewarded Surveys

Rewarded Surveys have been a trending monetization alternative for various apps especially during the Covid19 era when developers & app owners were looking for new ways to boost their revenue with a format that does not harm the user experience and offers attractive eCPMs. Usually Rewarded Surveys can be used as an alternative to Rewarded Videos within a virtual economy of an app or a game.

The concept of In-App Bidding

In-app bidding, which is an advertising method where mobile developers are able to sell their ad inventory in an auction, has changed the monetization landscape for developers.

In-app bidding is a method by which app owners could sell their ad inventory in an auction. Specifically, app owners can run simultaneous auctions where they can maximize the impression value from different demand partners. In-app bidding is an automated process and can allow app owners to create an internal competition for their bidding partners.

In-app bidding can create a fair virtual economy and allow real-time the value of each ad impression. Moreover, it is a time-saving process compared to waterfall bidding which is a less efficient method of ad buying. The waterfall categorized the different demand partners based on their historical data and trying to predict which partner will yield the highest eCPM rates

The future of Hybrid Monetization

The mobile ad industry will continue to adapt and change, therefore each publisher needs to his adjust his monetization strategies and evolve.New hybrids will enter the space as app owners will test & experiment with those in order to keep their user base satisfied. The success of publishers will rely on the hybrid models they will adapt, and the proper combination d formats they will use in the effort to maximize their profits.