While ad revenues and LTV are on the decline for many app publishers, ADM is swiftly stepping in and becoming the new way to earn decent revenue - with some app publishers set to earn >$1M per year, on top of revenue from ads and in-app purchases.
ADM is still in its infancy and many games and app developers have implemented their ADM strategies differently. We have listed our top tips for CCOs and CROs who are investigating this revenue stream and who are looking for an ADM partner.
- Data collected must be anonymous!
It seems obvious, but a critical success factor for ADM is maintaining absolute anonymity - no use or device data is essential. This includes ensuring that there is no way for this to be reverse engineered or re-attributed in the future. This is important for compliance with COPPA and also with data privacy laws in different countries.
Check that your ADM partner does not collect any personal data. This includes IDFA, IP address, MAC address, UID, etc which are considered to be personal data in some countries.
- Understand the monetization model. Accept that it is different and embrace its benefits.
Data is monetized differently to ad inventory. This is because data has varying values, depending on the quantity, type, geography and target vertical market. Unlike ads, there can be a delay between SDK distribution and inbound flow of revenue. This can range from days, to months. It is important to understand how, why and when the data is expected to be monetised; who will buy it, who will sell it, and what will it be used for. Due to the high costs of processing, storage and sales, the gross revenue share percentages are also often lower than other revenue streams. The good news is that the gross revenue numbers are high and data (unlike ad inventory) can be sold more than once. While it can sometimes take time to ramp-up, revenues can grow, and grow indefinitely, it's all incremental to other revenue sources and there’s no impact to the user.
- Minimise user impact.
Introducing data collection in the wrong way can affect battery, CPU, app file size, mobile data usage and more. These can have a negative impact on the user experiences and potentially lead to churn or abandoned installs. The right ADM partner will ensure that the collection of data has no impact to the user or their device. Check that the key performance indicators are not affected.
- Check for reputation and privacy compliance.
Various legislation and policies restrict the use of data, from app store T&Cs to government privacy legislation. If you work with an ADM partner, ensure that they have a clear privacy charter and continue to ensure their compliance with laws and regulations.
- Check if the data has value to you, too.
ADM data can be useful for competitive analysis, user experience and churn analysis which can help you optimise and grow in your core revenue areas. Take the time to explore to see if it can help you. That will ensure that you are collecting data that is useful to you.
- Don’t miss the boat.
Data monetization companies often have a limited amount of cash and capacity available to accept new partners and to offer integration payments or minimum guarantees. This often works in 12-18 month cycles. It is important to be decisive and execute a partnership quickly, or qualify yourself out. Deliberate for too long and you may lose out to more agile groups..
Tom Luke is the VP of Sales and Partnerships at Tutela, a company specialising in ADM for mobile app publishers on Android and iOS. Located in Victoria, Canada and London, England. www.tutela.com