In mobile gaming, apps are much more than a player’s paradise; they are a business for publishers, developers, and marketers. While most mobile games are free, they still make money in various ways. To understand performance and monetization efforts, one of the most important metrics is ARPU (avenue revenue per user).
To increase ARPU in mobile games, you’ll need to know what it is and how to calculate it. We’ll introduce that next and follow with some takeaways to help you boost it.
What Is ARPU?
ARPU is an important mobile app KPI. Its definition is the average revenue you make from each user during a specific time period. You’ll be calculating all players who downloaded your app and are active.
How to Calculate Average Revenue
To calculate this metric, you’ll divide revenue by the number of users by a specific time period, which could be day, week, or month.
ARPU = Revenue /Users
Why Is ARPU a Critical KPI?
Your mobile game may have a large user base, but that doesn’t mean you’re earning revenue from all of them. Those players that are contributing require special analysis. You can learn a lot from them that can then help you attract and retain similar users.
What You Can Learn
- Do certain events impact revenue?
- Is testing of different ads increasing revenue?
- What days and times of the day do these users engage with your app?
You’ll be able to spot trends, which could be positive or negative. Then you’ll need to respond to those to optimize mobile gaming app monetization efforts. In general, you’ll gather knowledge about how much more your app is generating from its most valuable users.
Industry Studies Show Events Drive High ARPU
Gaming apps collected $100 billion in 2020. In analyzing that number, gaming ARPUs were higher than ever. Why? There were several tactics, which varied by region. They included events, leaderboards, customization, competitive multiplayer, chat, daily and logins, and guilds and clans.
Applying this industry knowledge along with your data can help you accelerate this metric.
Tips to Increase ARPU
Now that you have data around your paying users, it’s time to exploit it to boost ARPU. Creating revenue from apps can occur in several ways:
- In-app ad revenue
- In-app purchases (IAPs)
- Subscription models
- Pricing models
Optimizing user experiences and being as relevant as possible to the user is critical. With your data and guidance from app monetization experts, you can experience lift around ARPU.
Here are some ideas to consider:
Experiment with New Ad Formats
What ad formats are you running currently? Do you see a drop-off in engagement? It’s time to do some testing and change up your ad formats. Leveraging a performance-based reward platform offers you a versatile portfolio of options to engage users.
Hook Whales with Subscription Offers
The majority of IAPs your app receives will be from whales, a subset of your paying users. They drive the most spend and are loyal. If you want to increase their spend, subscription-based models are a good strategy. It can work for others, too.
The key is to determine which features should be part of a subscription. It’s a delicate balance. You don’t want the game to be unplayable without a subscription, but you don’t want to give too much away. Strategize with your in-house experts and others to define this. Then test it to see if it works. You can always make changes to increase interest.
Maximize CPE Campaigns
CPE (cost per engagement) campaigns drive users to complete specific in-app actions post-install. You can use them across the user journey, and they can be a boost for revenue. You’ll need to understand “events” that drive engagement and optimize those for conversion. Testing these events is vital to learning more about how they contribute to revenue.
For example, if reaching a certain level in the game leads to retention based on your data, create a CPE campaign around it that offers players the chance to buy virtual currency or in-game features. You know, at this point in their journey, they are devoted to your game, so present them with offers that make sense for their continued enjoyment of it.
Segment Users to Better Personalize Offers
Not all paying users will be whales. Other groups are bringing in revenue. Creating cohort groups around user activity, demographics, or other similarities allows you to target them better.
- Increasing IAPs: Once a user engages with offerwalls, they are 10-14 times more likely to make an IAP.
- Earn without fees: Purchases made via offerwall don’t fall under platform fees.
- Grow ad revenue: Mobile games with offerwalls typically have a much higher eCPM (effective cost per mille/thousand) than those that use rewarded video alone.
- Scale and hit unique user bases: The offerwall inventory you use will depend on what provider you select. Thus, it needs to be highly scalable and expand your reach. If you work with a platform that offers this, you could see a bump in ARPU.
- Create urgency with limited-time deals that can incentivize users to claim the offer before it expires.
- Launch monthly specials: Looking at your data, you know times and periods of peak usage. Develop ads that correspond with these to maximize revenue.
Adjust Pricing Models
The simplest way to increase ARPU is to raise prices. However, if you do this, it should be driven by data. You don’t want to change prices arbitrarily until you have a better understanding of what the market is willing to pay.
Sudden price changes with no value behind them are likely to disappoint your most loyal users. You have the opportunity to present different pricing to segments of users. Focusing on whales with premium offers is a good start. You’ll want to test and review to understand if these adjustments are fruitful.
Optimizing ARPU for Mobile Games
To achieve sustainable increases in ARPU, look to your data and what it tells you about monetization. Executing these tips could make sense for your mobile game. Be strategic in the changes you make and work with experts in the field like AdAction that offer a portfolio of inventory options. If this metric matters to you, then contact our team today to get started.