News apps are an advertiser's dream. They have high reach, engaged readers with above-average salaries, and most importantly they offer a brand-safe environment. Because of this, advertisers are willing to pay a premium to reach this audience.
How much exactly are advertisers willing to pay? On the Smaato platform, the average eCPM for news apps is 44% higher than the overall average. With such high rates, building a strong monetization plan around an app is a big opportunity for news companies of all sizes. Here are our four tips to help maximize news app revenue:
1. Understand the Advertisers
An important step in creating a news app monetization plan is to gain a full understanding of the advertisers. One reason why advertisers like news apps so much is because of the audience. News readers are typically more mature and have more purchasing power than the users of other app categories. Furthermore, news apps have a large reach among all mobile users.
In general, news apps attract a wide range of different brands. However, some brand categories are better represented than others. Healthcare and Retail, for instance, are the biggest spenders by vertical, followed by Food and Drink and Automotive. Knowing this, you'll have a better understanding of what your audience is seeing and who advertisers are trying to reach.
2. Leverage Video With the Right Format
Video advertising is an effective tool, as potential customers are twice as likely to remember the content of a video ad compared to a display ad. Advertisers want to make the most of this format, so eCPMs for video are higher compared to other formats. This is a big opportunity for news apps, as many apps incorporate videos into their content. However, simply offering video isn't enough to maximize revenues. You'll have to leverage the right type of video format.
As the data from the Smaato platform shows, interstitial videos are by far the most valuable. These full-screen video ads are typically played at natural points in the user experience, such as between news videos. Users are engaged at these moments, which is why advertisers pay more for this format.
What does mean for news apps? Essentially, these apps should try to cater to the highest-yielding ad formats and provide support for interstitial video ads when it makes sense. Not offering advertisers this format leaves money on the table.
3. Invest in the App
When a user downloads a news app that they like, they are likely to continue using that app. News apps have the third-highest retention rates out of all app categories, behind weather and health and fitness apps. That's true for both Android and iOS devices.
To attain high retention rates, the app has to be well-designed when it comes to the user experience. Apps are an integral part of creating a positive brand experience, and a poor design can force users away soon after they first download a news app. Technical issues could also frustrate even the most loyal users and prevent them from retaining the app.
In order to avoid these problems, it's important to invest properly in the app and offer a quality user experience. With engaged users, successful monetization comes easier.
4. Choose the Right Monetization Mix
Not all news apps are equal when it comes to monetization. A purely ad-driven plan can be very effective for some news apps. However, a freemium model can work on some audiences, as these users might be willing to pay a subscription fee to remove ads or access premium content. Some users might be especially sensitive to paying a subscription fee, so it's important to do thorough research of the audience.
Regardless of the monetization model deployed, in-app advertising is a powerful tool to generate revenues. Advertisers value news apps and pay accordingly. So, be sure to make the most of these tips when creating a news app monetization plan.