Mobile user acquisition is more competitive than ever.
As research mounts to suggest that app downloads are in universal decline, publishers are doing everything in their power to hold on to whatever market share they can. For many, this means preventing ads for perceived competitors from running in their apps. This practice, known as "blacklisting", is intended to prevent otherwise engaged users from encountering an ad for a similar product and leaving, never to be seen (or monetized) again.
While it might make intuitive sense for some, research has shown that this isn't the most common scenario. Fears of cannibalizing IAP revenue, reduced session time, and hastening churn have been proven largely unfounded. A 2015 study by AdColony analyzed retention and revenue from 8 apps in contrasting verticals. The study revealed that in all cases, removal of blacklists resulted in substantial increases in ad ARPDAU at no statistically significant cost to retention.
As professional ad optimizers, our enterprise partners entrust us with earning the highest possible ad revenue per user across their portfolio. We've repeatedly seen that the findings of AdColony's 2015 study on blacklists are equally applicable when mediating multiple networks and exchanges in order to optimize large-scale portfolios. Here's how we've found blacklist removal affects the apps we optimize for our enterprise partners:
It Increases Ad ARPDAU
Unlike eCPM, ad ARPDAU is an accurate representation of how well your existing ad implementation is monetizing your entire user base. It's a function that takes into account things like placement and frequency caps, but one of its major determining factors is whether or not your users are seeing ads for things they like. Chances are that if users are using your app, they're interested in apps from the same category, and higher interest means higher engagement rates. Whether you consider yourself in direct competition with those apps or not, ad ARPDAU will inevitably rise if you to put more relevant content in front of your users. But does that mean you're inviting your users to leave? Well...
It Doesn't Affect Retention
While there are plenty of reasons why competitor's ads don't impact retention, chief among them being that users are using multiple apps for the same purpose, the numbers don't lie. AdColony's study revealed that only 3 out of 8 apps suffered any loss in DAU. What losses did occur were statistically insignificant. Across all variants, there was an average 2.9% increase in DAU following blacklist removal. At its worst, blacklist removal resulted in a 4.7% decrease in the case of an entertainment news app with 200k DAU, though it was accompanied by a 442% increase in ad ARPDAU. But what about IAP revenue?
It Doesn't Impact IAP Revenue
As any seasoned publisher knows, all IAP revenue is typically generated by a very small subsection of your user base. It's not uncommon to see conversion rates in successful apps as low as 2%. Paying users are typically highly engaged and well retained, which aren't the type of users you need to worry about losing to a competitor. If they're engaged enough to pay, consider them invested. To be certain, you can always disable ads for paying players, either directly within your app or using a tools like Upsight's User Experience Management.
All that said, there are plenty of non-performance based reasons to maintain a blacklist including brand-related PR implications or legal obligations. Whatever the reason, the only way to be 100% sure that your blacklist is being enforced is to check regularly and stay in constant contact with ad providers. It's a time consuming task that impacts legal, financial, and technical departments. At Upsight, we think your time and attention would be better spent working on your next great product or update, which is why blacklist management is something we include in our ad optimization solution. We also offer dedicated technical support resources and expert consultation on best practices to make sure our partners are set up for success.
To learn more, feel free to contact our sales team.