Most app developers these days know that in order to extract the most value from their user base, they need to customize the app experience for individual users according to their in-app behaviors. By treating users based on their preferences, a developer is able to personalize the experience and more than likely build a longer, deeper and more profitable relationship. Of course, building these relationships on a one-to-one basis is impractical if not downright impossible, so most developers break their user base up into segments.
The challenge to building these segments lies in knowing which behaviors to base them on. The most basic and common form of segmentation is spenders versus non-spenders. This strategy lets developers focus on promoting in-app purchases to their spenders while encouraging non-spenders to take part in advertisements instead. It’s an effective strategy that helps maximize the revenue for both segments, but it’s also an overly simplistic strategy that ignores a lot of the nuance of users’ spending and engagement habits.
For those developers looking to take their segmentation practices to the next level, we present four powerful but often overlooked ad-based user segments and the best ways to monetize them.
Segment #1: Currency Samplers
A Currency Sampler is someone who takes part in rewarded ad offers as a means to testing out an app’s premium currency. They’re not quite ready to spend actual money on IAP just yet, but they’re curious about what they can get with IAP and whether it’s worth buying premium currency. So they watch a few rewarded videos or engage with the app’s offerwall in order to earn premium currency for free, to see how much value it adds to their experience. For this group, rewarded ads essentially serve as the gateway to in-app purchases.
Be sure to give these users an easy path to taking part in rewarded ad offers, and when the time is right -- based on in-app analytics and the past behaviors of other Samplers -- hit them with high-value offers for premium currency so that they’ll convert from being a Sampler to a Spender.
Segment #2: Ad Fanatics
This segment of users can’t get enough rewarded ads. They might not ever convert to spenders, but they will often watch videos and engage with other types of rewarded ads until they’re aren’t any relevant offers left. In fact, Ad Fanatics are so hooked on rewarded ads that if the ads do run out, they will often file a complaint with the developer asking for more videos to watch.
Make sure your Ad Fanatics have enough ads to watch by removing any caps you might have in place for other users and also by making sure you have enough ad networks integrated in order to cater to their requests. If you do run out of ad inventory, send these users a message apologizing for the shortfall and let them know the very second you have more videos available for them to watch.
Segment #3: Non-Rewarded Ad Viewers
Believe it or not, some users don’t want to be rewarded for their ad engagements. There is a segment of users who will decline your invitation to earn rewards by watching a video ad, but who will happily sit through a brief, non-rewarded video ad as a nice little breather in between levels.
For these users, be sure you have plenty of non-rewarded video ad inventory on hand, and serve the ads during natural breaks in the gaming action, so that they don’t interfere with the gameplay. Be sure the ads are skippable so that users aren’t forced to sit through the entire ad if they don’t want to. You’ll find that these ads have no impact on the user’s retention or engagement levels but serve as a nice source of incremental revenue.
Segment #4: Never Watchers
Just as there are non-spenders, there is also such thing as Never Watchers. This is the segment of users who will do everything within their power to avoid watching or engaging with any type of ad at all costs. Some might even put their phone on airplane mode in order to prevent the developer from serving ads. They don’t want rewarded ads, and they dislike non-rewarded ads even more.
Many developers will offer these users the option to purchase the ability to turn ads off, which can be an effective way to monetize them while also giving them more control. If you’ve offered them this option several times and they’re still not interested, continue to serve them ads on a very limited basis, making sure not to overdo it to the point where they’ll uninstall or stop using your app.
Proper user segmentation can be a tricky task. It requires developers to get the right data and be able to apply advanced analytics to it in a way that is both insightful and actionable. But the payoff for those who get it right can be enormous. Try targeting the segments above with their associated monetization strategies, and not only will you give your users a better, more personalized app experience, but your revenue numbers will increase as well.