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How First-Party Ad Revenue Data Can Boost Your App Monetization Strategy

App Annie

Data driven marketers rely on ad revenue data to extract insights that result in better monetization strategies. They use this data to establish smarter bidding strategies and allocate their marketing budget more efficiently.

Analyzing first-party revenue data drives mobile app monetization performance, helps optimize user acquisition (UA) campaigns, and protects user retention. App makers gather ad revenue data constantly, but many are unsure of how to use it. When we say first-party ad revenue data, we are referring to the data that you own or the data provided to you by your partners.  

In order to make the most out of ad revenue data, it must be leveraged properly - and that is a more complex task than it sounds. It starts with collecting data from all of the disparate sources across your marketing and advertising stacks. Then comes the process of cleaning and organizing this data, and then finally analyzing it for insights.

To explore why first-party ad revenue data is so important to app publishers, we tapped Kamal Slaoui, our lead analytics specialist.

A photo of Kamal Slaoui, App Annie's lead analytics specialist.

Kamal Slaoui

App Annie: To start, can you tell us what kinds of data exist in the app publishing market? 

Kamal Slaoui: Data-driven app publishers and marketers can encounter three different types of data. To put it simply:

  • First-party is the data you have collected as the publisher of the app. This could be ad revenue data, your customer data and their account details, ad network performance, app/web interactions, or the record of how users behave in the app. 
  • Second-party is information you have purchased directly from another company that owns the data and has permission to sell it. For example, information that comes from LinkedIn profiles. 
  • Third-party is data you purchase from other sources but without any direct connections to the users from whom the data is collected. This could be ratings of an app in the app stores, for example.

What makes first-party data unique? 

First-party data is the information you collect, own, and manage. It comes from your apps, marketing campaigns, social media platforms, customer relationship management (CRM), mailing lists, and throughout your ad tech stack (supply side platforms [!ssps!], demand side platforms [!dsps!], mediation, analytics, and attribution partners.)

This data type illuminates how your users interact with your apps, helps you determine if your monetization efforts are effective, and enables you to analyze trends. It gives you unique information and the power to build a competitive advantage. 

When it comes to the data that you own, you must be especially careful, given recently enforced data protocols (e.g. GDPR) and the soon to be enacted Privacy Act in California. When you manage first-party data well, it can be useful to you and your customers. 

First-party data is key to good decision making. But it’s not easy. How you leverage your data matters.

Tell us more about that. What’s the best way to leverage your ad revenue data?

App marketers rely on ad revenue data to extract insights that result in better monetization strategies. They use this data to establish smarter strategies and allocate their marketing budgets more efficiently.

In order to have a 360° view of your business and extract insights from ad revenue data, it must be organized and centralized in one place. However, there are a number of challenges that advertisers and publishers must overcome. Some of the most common are technical issues. 

Then, there’s the cost. There are three types of costs associated with cleaning and organizing the data:

  1. Building an efficient and stable data pipeline
  2. Unifying your naming convention across all your ad tech partners
  3. Building insightful reports, reliable ETL (extract, transform, load), and then feeding reports and data into your business intelligence system

A study conducted by Advertiser Perceptions and MightyHive, shows that marketers still struggle to tap the full potential of the data they own: 44.5% of respondents said they were tapping into 40% or less of their company's first-party data potential.

A table explaining First-Party Data Potential

For many, correctly leveraging first-party data is easier said than done.

How can app publishers make the most of their ad revenue data?

Analyzing ad revenue data helps optimize eCPM (effective cost per mille/thousand impressions), as well as protects user retention. The faster you have access to this data, the faster you can fine-tune your strategy. Next, you can find areas to personalize user experience, monetize more effectively, and increase LTV (lifetime value) within your reports. 

Publishers can also use their own data to negotiate better deals with their partners. Whether it is in a DMP (direct marketplace), PMP (private marketplace), adjusting heading bidder strategy, reordering waterfall, or just comparing CPMs (cost per mille), the data provides an exclusive look into how your business is operating and how each connection is contributing to its success. 

You can even compare your partners to each other to see which ones are giving you the best deals. Monitor KPIs (key performance indicators) like CPM and viewable impressions to make sure you’re both monetizing and advertising with quality partners. A viewable impression shows insights about the quality of the ad, as a viewable impression of “1” means that the visitor saw at least 50% of the ad for more than one second. The CPM in some ways describes your ad monetization performance.

The value of first-party data extends beyond internal strategy and also gives a window into competitor strategy. The careful combination of first and third-party data, is an important component of a holistic strategy. 

Can you explain the difference between direct, indirect, and programmatic?

The key point is to integrate all your partners in one place, whether it's an ad network, a mediation platform, an SSP, or an analytics platform. The reason behind this is that it will allow you to analyze your performance using cross-network metrics like revenue per session, impressions per page view, served ads per user, return on ad spend, etc.

One unified data set can drive operational excellence, as it provides actionable insights to all levels of the organization. From the same database, the ad operations manager can decide to replace interstitials with rewarded videos between every level of a game, while the marketing manager can choose to increase UA spent on a certain network for a specific campaign. At the same time, C-levels and General Managers can control the overall performance across all connections.

How do first and third-party data work together?

The goal of combining first and third-party data is to get a complete view of your competitive position. Sure, you know how you might be performing and you may be experiencing your best performance yet. But what if it seriously trails your competitive set?

While first-party ad revenue data gives you an overall view of your own performance, third-party data can be more revealing. This level of analysis gives publishers a huge advantage over their competitors. With first-party data helping you optimize campaigns and third-party data giving your meaningful insights into what is going on in the industry, you will be better positioned to succeed. 

What are some key use cases for first and third-party data?

Third-party data can be useful at different points in the business journey, such as:

  • When releasing a new game: The first weeks after the release, your data set is still poor, as there is not enough data to make a thorough analysis. Here, third-party data comes in handy as it shows you the direction you should be going in, both in terms of advertising and monetizing. Third-party data can help you answer questions like: How many downloads should I be aiming for? How many paid/organic users should I be expecting? What SSPs are my competitors using? What are the most prolific ad types/formats?
  • To maintain your positioning: Your game was released a long time ago and you’ve been performing well, but you need to maintain your position. Here marrying first and third-party data is essential as you can match your own KPIs with market KPIs (or competitors’) and proactively adjust your monetization and user acquisition strategies accordingly.

Can you give us a quick example of how this would work?

Say you launched a new ad campaign; your own data shows your CPI (cost per install) decreased in the US from $2.50 to $2.00. This shows that your campaigns have drastically improved. Using only first-party ad revenue data, you will consider this a win. However, seeing that the average CPI in the US is $1.90, you know that there is still room for improvement. This combination of first and third-party data is crucial to benchmarking your performance and improving over time. 

How can app publishers take first-party data to the next level? 

Using first-party ad revenue data, you can A/B test different levels of your performance and come up with new strategies such as a new monetization mix, a new cross-channel conversion technique or simply a new ad tech partner. Matching the result of that A/B test variant with relatable third-party data can only strengthen your decision making.

Thank you for this introduction to first-party data, Kamal!

You’re very welcome.

 

Get in touch with the App Annie Sales Team to make your marketing and advertising data actionable.

December 17, 2019

App Monetization

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