Challenges in app monetization — and how to resolve them

Users around the globe downloaded 136 billion apps last year, spending a total of 4.2 trillion hours in those apps. With so many apps and such intense competition for attention, app developers face an uphill battle in generating real profits. And that hill turns into a mountain when you consider the added burden of future-proofing apps in a mobile ecosystem that’s shifting to emphasize end user privacy.

All these factors have complicated app monetization for app developers and studios. Many developers choose to monetize their apps through methods including pay-per-download, in-app purchases, subscriptions, and in-app advertising. But it’s in-app advertising that is the most popular and impactful strategy in today’s mobile ecosystem.

The actual process of app monetization, however, can be overwhelming for many developers. Navigating a complex ad monetization landscape and choosing which techniques and technology fit your revenue KPIs is a big hurdle. So what are the main challenges that come with app monetization, and how can these challenges be overcome?

Not enough demand sources

Publishers often struggle with a lack of diversified demand sources. Developers choosing just one monetization partner will hinder their opportunities to access demand on a more global scale. Working with more than one monetization partner for different apps can be beneficial in driving better performance for certain app verticals or for particular geos. 

Additionally, publishers should partner with a credible SSP or ad exchange that supports private marketplace (PMP) deals to achieve higher eCPMs and stronger relationships with buyers. 

For publishers experimenting with mediation, it’s important to add monetization partners that provide the flexibility to work with multiple mediation or in-app bidding platforms. Monetization partners should also support multiple integration methods, with an SDK as a core offering.

Poor ad quality

While ads are the most popular strategy for app monetization, they aren’t a foolproof way to generate revenue. Some developers fail to consider the quality of ads that they allow within their apps. This can result in poor ad creatives that severely degrade the user experience. In order to safeguard inventory, publishers need to ensure that automated and manual checks are in place for detecting fraudulent and undesirable ads.

Publishers should also carefully consider the tradeoffs between an ad format’s monetization potential and the experience it could deliver within the app. As a general rule of thumb, high-impact ad formats such as interstitials and rewarded video work best for engaging users within the in-app context.

For example, Verve’s dedicated in-house ad quality team helps publishers ensure positive user experiences with high-tech and hands-on processes that weed out irrelevant ads or invalid traffic. Those processes include: manually curating every ad placement during onboarding, whitelisting new supply partners, and using proprietary algorithms to detect fraud in real time before bidding. We also partner with Pixalate and Human to verify legitimate traffic, and work with GeoEdge to detect malware. We hold all publishers and advertisers to rigorous content guidelines to ensure quality.

Fraudulent SDKs

Within today’s mobile ecosystem, there are many fraudulent SDKs, which can damage a publisher’s reputation and violate user privacy. To combat this, it’s necessary to carry out thorough checks before implementing a partner’s SDK, as well as ensuring the SDK is lightweight and robust enough so the user experience is not compromised. Publishers can examine the SDK footprint of a partner and check how the SDK safeguards user privacy.

In our mission to promote growth and transparency, Verve’s HyBid SDK is built on an open-source core. Open-source SDKs are key for ensuring that an SDK is secure. By making the code public, the SDK is open for audits by security companies or others monitoring consumer data protection.

Privacy challenges

The new realities of our privacy-first digital ecosystem (including the enforcement of privacy manifests) mean mobile app publishers are facing challenges around future-proofing their apps with privacy safeguards. To combat the revenue impact of user opt-in rates, app owners should experiment with SDK partners offering on-device monetization solutions that don’t require any form of identifier or PII.

On-device audiences can ensure that user addressability is maintained and their inventory appeals to advertisers — brand and performance alike. Verve has an on-device audience monetization technology for publishers called Anonymized Targeting on Mobile, or ATOM. ATOM 3.0 solves for addressability with privacy-first technology that does not require any persistent device identifiers — still allowing publishers to monitor app usage patterns anonymously. Even better, ATOM 3.0 enriches the ad requests of the ad SDK of the app with relevant cohorts.

To learn about how Verve can help you monetize your apps effectively and with dedicated support, get in touch. We’d be happy to help.