As mobile apps become more embedded in our day-to-day lives, user behavior grows more nuanced and complex. Some of the biggest shifts in the app ecosystem have occurred with respect to pricing models — today’s consumers expect apps to be free, while still offering a path to premium content. Years after its inception, the free-to-play model remains profitable, but diverse strategies are now necessary to monetize every user segment.
For mobile developers, the key is to use all the tools at their disposal — chief among them, offerwalls. These are in-app advertising units that monetize users through rewarded engagements.
New research, from mobile advertising and app monetization company, Tapjoy, suggests that offerwalls continue to play a vital role in mobile app monetization. Though the format has been on the market for over a decade and is already adopted broadly, publishers are reawakening to its full potential thanks to consumers’ interest and demand for the increasingly popular ad unit.
Here’s seven takeaways from the report:
1. Non-IAP spenders love mobile offerwalls
Nearly half of all mobile offerwall users — 45% — said that if a mobile game suddenly removed its offerwall, they would stop playing after they ran out of virtual currency. Furthermore, 30% said they would continue to play without making an in-app purchase.
2. There’s no one-size-fits-all monetization strategy
According to recent industry data, just 13.4% of users ever complete IAP. Meanwhile, in a survey run in the Tapjoy offerwall, 88% of users say they like having rewarded advertising options alongside IAP.
3. Offerwall users love CPE offers, and CPAs are growing in value
Cost Per Engagement (CPE) offers, in which a user is rewarded for both downloading a new app and completing a specific activity or event within it, account for 84.5% of revenue for Android publishers. On iOS, new restrictions prevent CPE offers from running, which has resulted in a 35.8% increase in advertising spend on CPA offers since the change, opening a new window of opportunity for iOS publishers.
4. Offerwall and video are an effective combo
On average, we saw that Tapjoy publishers that use the Offerwall alongside Rewarded Video generate 114% more revenue than those using Rewarded Video alone.
5. Offerwalls complement the IAP ecosystem
On average, just 4.7% of Offerwall users also convert on IAP, proving that offerwalls primarily monetize non-spenders. This aligns with reports we’ve heard directly from publishers, who say that IAP revenue has remained steady or even increased following Offerwall implementation.
6. Offerwall engagement correlates to strong retention
Retention among Tapjoy Offerwall users is 2-3X higher than non-users at the 7, 14, and 30-day marks, proving that an app’s most loyal users enjoy rewarded offers.
7. When it comes to F2P, offerwalls are here to stay
Overall, the data Tapjoy uncovered suggests that offerwalls will play a big role in the future of F2P. If your app has a currency-based economy, an offerwall could unlock a whole new revenue stream with virtually no heavy lifting from your team.