Free-to-play revenue tactics

1. Overview

In the previous tutorial: Deeper Dive into Monetization you identified the impact of monetization on player experience, types of monetization, considered the relationship between monetization and game design, explored a successful case study and reflected on when to start adding monetization to your game.

In this tutorial you’ll be exploring "Free-to-play" tactics.“Free-to-play” comes from what is commonly referred to as “Freemium” in business. It basically means offering a product or a service free of charge at a very basic level.

Monetization comes in when extra functions and services are offered to enhance the product and/or user experience. You will now compare different types of monetization tactics in more depth so you can pick the best one(s) for your game.

In this tutorial you'll:

• Compare different types of advertising

• Compare three types of IAPs

• Explore how to combine and balance ads and IAPs

• Measure the success of your monetization efforts

• Reflect on how ads and IAP can interfere with retention numbers

Let’s start with Rewarded Videos!

2. Advertising: Rewarded video adverts

These are more engaging than any other online advertising format. With nearly 70% of users demonstrating favorable attitudes to rewarded video, they are a great example of generating revenue while giving your players clear incentives to participate in the process.

Rewarded video ads typically prompt a user to agree to view a video ad in exchange for a reward which can be used within the game they are playing.

The value of this exchange is clear to the player, but also provides significant value to both the developer serving the ad as well as the advertiser buying the ad. The developer gets to monetize at scale while the advertiser gets to promote their own application or product to a highly engaged user.

According to a recent study by AdColony, 75% of respondents identified rewarded video ads among their most effective monetization methods, higher than any other method.

The next type of advertising you will explore is Playable Ads.

3. Advertising: Playables

Playable ads

These are ads that can actually be played directly within the ad unit. This is typically done by companies wanting to show a teaser version of their game as part of the ad, which may influence players to proceed to download the game.

This is a growing ad format which more developers are allowing in their game because advertisers are willing to pay a premium for this engaging format, and have increased their capacity to create these formats for advertising.

The next type of advertising you will explore is Augmented Reality.

4. Advertising: Augmented Reality

Augmented Reality (AR) ads present an unprecedented opportunity to connect with consumers. In-game AR ads provide consumers with the ability to have a truly interactive experience with the ad content.

However, serving these ads can present some user friction that does not exist with other ad formats since apps need to request permission to access a camera. This may unsettle some users if they don’t fully understand why the app or ad placement is requesting access to their camera.

Unity’s in-game AR ad solution is called Responsive AR.

Responsive AR ads give more control to the user, allowing them to choose to interact with richer content. With Responsive AR ads, marketing content begins as a 3D-rendered ad unit. After a brief period of familiarization, it gives users the option to enhance their experience by using AR. Since the ad is interactive no matter what the user chooses, advertisers can design with purpose and avoid using fallback creative.

Augmented Reality (AR) ads are a format which are in extremely high demand for brand advertisers and they are willing to pay a premium for the rich experience it provides their audience.

AR ad placements are really just another content type and they can run wherever a video or interstitial ad would serve.

Therefore, AR ads will compete against other placements to ensure they only serve if they drive the highest price. The same thought process and strategy should apply when implementing AR ads as they would for rewarded video, interstitial video, or playables.

Does this placement make sense within the core loop of my game? Would a user want to engage with this ad to give them a reward and help them continue their game play rather than waiting 24 hours for a currency opportunity to reboot?

5. In-app purchases (IAPs)

As previously mentioned in Monetization as game design , one of the most common mistakes game developers make is treating monetization as an afterthought.

To succeed, in-app purchases need to be part of the game design so that they can be served at exactly the right moment. If you build your game with in-app purchases in mind, your users will be much more likely to buy them.

Consider how players progress from one stage of the game to the next, and think about challenging, high-friction experiences as IAP opportunities but make sure you won't make it impossible for your players to progress unless money is spent. Also be careful to not progress your players too quickly in your game, and make sure you’re offering enough gameplay value to get them to return.

There are three main types of IAPs. Games often offer a combination of the three, depending on the action you want the players to take throughout your game.

• Consumables: These are IAPs that can be used only once, such as an extra life. For multiple uses, they can be purchased again.

• Non-consumables: These are IAPs that can be purchased once and used again, such as an additional feature or a game upgrade.

• Subscription: These are IAPs that provide features on an ongoing and renewable basis, such as new game levels.

Now that you have identified the three different types of IAPs, compare them and reflect on which one(s) you would like to use to help your players progress in your game.

While you're deciding, you may wonder how you will know if you are progressing your players too soon. Meet the experts and hear what they say about this next!

6. Ask the experts!

Would you like to hear more from an expert?

In the video below, watch Cathal and Illya, both Unity monetization experts, discuss:

1. How can a developer know if they’re progressing their players too quickly in their game?
   

7. Combining/balancing ads and IAP

Once you have ads and IAP in place, you can begin to get more sophisticated in how you implement each method for different users at different stages of your game.

The key thing to recognize here is that the vast majority of your players will not make purchases within your game. This is because most games allow players to enjoy the majority of what a game has to offer without making purchases. If they didn’t, players would likely stop playing the game and the publisher of that game would have fewer opportunities to grow their business.

However, the players who do make in-app purchases are quite valuable. Therefore, analyzing your user data based on their history of making purchases in your game equips you to deliver smarter monetization.

More specifically, it enables you to serve ads disproportionately to the users who do not make in-app purchases by excluding or reducing ad exposure to those who do, allowing you to monetize your non-payers while continuing to enhance gameplay and increase retention from your payers.

Whether you track behaviour through your internal data or through a third party, this starts with some mode of user segmentation. User segmentation is the process of grouping users based on their actions or characteristics so that you can deliver unique experiences suitable for each of them.

Various ad platforms and liveops providers, which you will explore in more detail in Monetization solution providers, have capabilities to ingest those segments and deliver custom content to each of them.

8. Practical tips on combining and balancing ads and IAP

Have ongoing customer segmentation between IAP purchasers and non-purchasers.

Behavior changes over time, so if you segment your purchasers from your non-purchasers once, you can’t necessarily assume those segments remain unchanged. Segments of just about any kind are dynamic, so having current views of those segments refreshed every month or quarter will be helpful in assuring you are delivering the right actions to the right people.

Be flexible with your ad formats

If you find that an ad placement seems to be increasing your player churn, before removing it to rely only on IAP, consider trying a different ad format in its place and re-evaluating the results.

When in doubt, prioritize your gameplay

If you are weighing two different strategies or tactics against one another and you are struggling to determine which has more revenue upside, the player experience should ultimately be your deciding factor. Players who enjoy their experience in your game are your true source of sustainable revenue.

9. Measuring the success of your monetization efforts

Once your monetization pieces are in place, how do you know everything is working?

The easiest way is just to keep track of the revenue coming in, but ultimately that doesn’t do much good over the long term if the monetization strategies in place are causing players to churn.

Let's look at the five top reasons why players churn! Here are some tips on what to do in different scenarios:

Measuring revenue along with any peripheral metrics, such as player engagement and retention and time spent per session, will help you evaluate the overall health of your monetization efforts. You may be able to track this internally or with the aid of an analytics partner.

You'll explore the analytics providers in more detail in Analytics Providers. In Creating your Monetization Strategy, you will also learn about how to create a Monetization strategic plan in more detail.

If you are at a stage where you can check everything is working well with your monetization efforts, take some time now to analyze your game's:

• Player engagement

• Retention figures

• Time spent per session

• Opportunities to increase player engagement

• Advancement blockers

• Any technical problems

With some many different ways to measure the success of your Monetization efforts, you may be wondering how ads and IAPs could potentially interfere with your retention numbers. Let's ask the experts to hear what they have to say about this!

10. Ask the experts!

Would you like to hear more from an expert?

In the video below, watch Cathal and Illya, both Unity monetization experts, discuss:

1. Do ads and IAP interfere with retention numbers?

11. Summary

In this tutorial, you compared different types of advertising, three types of In-app purchase, explored how to combine and balance ads and IAPs and how to measure the success of your monetization efforts. You also took some time to reflect on ways to measure your monetization efforts.

In the next tutorial you will:

• Examine and evaluate the different Monetization 3rd party solution providers

• Distinguish the differences between native and paid 3rd party IAP plugins

• Investigate what to consider when selecting ad networks

• Compare different Ad mediator solutions

• Examine what to consider when measuring efficacy of analytics providers

• Recognize how you can make more money than you spend