Rewarded Video
When it comes to monetizing users, in many ways, Rewarded Video (“RV”) is the most effective ad format. In addition to increasing revenue for developers, adding a rewarded video also increases retention and session duration (unlike Interstitial and banners, which can sometimes have the opposite effect).
While it can be difficult to add reward video to hyper casual games (due to the lack of complex app economics), it’s worth considering creative ways to implement this format. Developers who want to roll out more reward videos can try adding different levels to their games or providing different valuable rewards such as gems, extra time, extra lives, etc. to increase player engagement. A good target would be an engagement rate of 40% or higher, and 4 impressions per user per day.
Banners and Interstitial
Even if developers have optimized their strategy for reward videos, you can’t help but notice that more than half of users don’t interact with this ad format (and even fewer make in-app purchases). This makes Interstitial (full-screen banner) and banner ads the best friends of hyper casual game developers, helping them successfully monetize their users.
There are two main factors to consider for Interstitial. The first is the number of ads shown per play session, and the second is its type: static, video, or Playable. It’s also very important to decide if the ad will have a “skip” option, and if so, how many seconds will it appear after? A more aggressive approach (more impressions per session, including Playable and video, a “skip” button that will only appear after 5 seconds) will result in a higher ARPDAU, but can also simultaneously reduce session length and drive users away – so it’s worth being careful here.
Developers who want to implement a more sophisticated monetization strategy should consider creating individual ad slots for different segments. For example, for users who watch reward videos and actively purchase in-store, a less aggressive approach to display ads would be appropriate, as these are users with high engagement rates and likely high retention rates as well. For users who are not monetized by in-app purchases or reward videos, a more aggressive approach would be appropriate to help drive hyper casual revenue.
Measuring advertising revenue
While advertising is the bulk of revenue in hyper casual games, getting data on this revenue at the device level is just as important as it is for IAP-centric games. As the share of advertising as a percentage of total app revenue increases, this information becomes more important for user engagement and for the monetization process as a whole. In some ways, advertising can be very similar to IAPs in the sense that, you have Whales who spend a lot in apps. You may also have “Ad Whales”, that is, users who generate significant revenue from actively interacting with ads. Thus, it’s important for developers to adjust their strategy based on data about how users interact with ads and on device-level revenue data. For example, ironSource’s ad revenue measurement tool allows developers to see which segments of users are not interacting with reward videos at all, and who can be shown more Interstitial and banner ads.
In-app bidding
In addition to implementing ad units, the monetization stack that powers them is equally important for hyper casual developers. Acting as an auction among ad networks, In-app bidding, which has gained significant popularity recently, allows developers to effectively automate monetization while keeping the maximum price of each display.
Since monetization of hyper casual games relies heavily on advertising, and hyper casual developers often have large portfolios of advertisers, activating In-app bidding can help reduce resources devoted to optimization. In essence, instead of spending hours manually optimizing multiple Woterfalls to maximize EBPM, In-app bidding technology automatically allocates display to the ad network that pays the most.