Ask any app developer if they want to increase their eCPM and they’ll almost certainly answer with a resounding yes. Despite this, most in-app ad strategies are under-tested and under-optimized. The result is that many developers are needlessly losing out on revenue.
Whilst there are lots (and I mean lots) of ways to potentially notch up your earnings, the basic ideas that underlie most individual strategies are relatively simple. As detailed below, you’re essentially looking to improve only a handful of key metrics.
The Role of In-App Advertising
You can see from the graph below that advertising accounts for the smaller share of worldwide app revenue. The key point to bear in mind is that it should be part of a broad monetization strategy – one that incorporates various in-app purchase options and also (if it’s appropriate) paid upgrades and premium content.
As you’ll see, one of the most effective tactics can be to blend different elements together. Combining in-app advertising, for instance, with promotion of your own virtual goods, allows you to control every part of the buyer cycle. The result is a higher CPA and, ultimately, greater revenue for you.
(Source : Statista)
It’s important to first clarify some common terms. eCPM stands for “effective earnings per mille”. “Mille” is a latin term that means one thousand and “effective” signifies actual rather than face (proposed) value. So it refers to the actual cost to the advertiser for 1000 hits. The higher the eCPM, the more revenue that the publisher will earn.
It’s a useful figure because it represents earned revenue whereas other measurements are more open to misinterpretation. If you’re working, for example, with a CPA network you might have a high click-through-rate but a low eCPM because the visitors you drive aren’t converting on the third-party platform.
The basic calculation is as follows:
We can also rewrite the formula to help illustrate the areas which we can improve. Take the following example:
Based on the second calculation, which acts as a useful tool, we can see that increasing eCPM is about optimizing one, or all, of the following values.
● Click-through rate: This is the probably the easiest metric to optimize because the developer can control a lot of the variables. Different ad placements, timings (when they show) and formats can all be tested. That said, the choice of network, and resultant targeting, does play a part.
● Conversion rate: This is applicable to those developers opting for a CPA (cost-per-action) or CPI (cost-per-install) model.
● Revenue per conversion: If you can increase the amount that you are being paid per click or conversion then revenue will increase.
Understanding What you Control (and What you Don’t)
It’s important to distinguish between the factors you can have an effect on and those you can’t. Those which are under your control are the focus of this post.
The important thing to understand is that most factors are under your control. Even those that aren’t can be effectively managed. OK, so let’s jump into the tips and tactics themselves…
1. Experiment With Different Networks
Ad-relevancy is one of the most important factors for increasing CTR (and thus eCPM). If your user-base consists largely of millennial gamers then you’re not going to have much success if the ads that they’re seeing are aimed at yacht-owners or pensioners.
Different ad networks have different targeting strategies, so switching can often mean significantly higher revenues if you manage to find one that’s particularly well-suited to your audience. Google’s AdMob network, for instance, relies primarily on geographic and demographic information whereas InMobi uses a system called appographic targeting that delivers unique ads to users based on their past installs.
Equally for certain apps, a CPA model, utilized by networks like YeahMobi, might work better. You can then use your own data insights about your users and pick highly-focused offers.
Chartboost, a network that will be explored in more detail later in the post, is a games-only ad network. They offer the unique option to choose which advertisers you work with. Again, if you’re able to use your own analytics software to understand your user-base, you can much more effectively target the right kind of people.
6Waves, who publish the app Slots – Magic Wonderland – saw a 150% increase in revenue when they changed their network. The mix of highly targeted ads and personally-selected deals meant that they were able to achieve an an astonishing eCPM of $100.
2. Opt for Ad Mediation Companies
Generally speaking, you’re going to see greater success with ad mediation companies than with specific networks. There isn’t always a clear distinction between the two – AdMob for instance offers mediation alongside its own network – but most will differentiate themselves as being either one or the other.
So what’s the difference? A network connects publishers with advertisers, serving ads based on its own targeting criteria. It’s essentially the middleman. As illustrated in the first point, different networks have their various pros and cons. A mediation company, on the other hand, connects the publisher with numerous networks. They have their own internal processes for evaluating and ranking networks with the aim of providing the best eCPM.
There are numerous benefits for the developer. Fill rates tend to be higher, ads are better targeted and optimized, and publishers aren’t limited to ads that fall within a particular geographic location. MoPub, MobVista and Appodeal are all good examples of mediation companies.
One developer effectively used mediation to increase the revenue generated through their app, Horoscope Plus, by 299%. They did this by enabling six different ad networks, monitoring their success and prioritizing the best performers. You can see a screenshot of their earnings increases below.
(Source : Borislav Gizdov)
Also keep in mind that their downloads stayed exactly the same, as indicated by the graph below.
(Source : Borislav Gizdov)
One more interesting case study is Devexpert’s Weather and Clock Widget, which achieved a 53% increase in revenue after switching to a mediation service.
3. Try Different Ad Formats
Almost all apps will benefit from having a range of different ad formats. By including a handful of different types, especially in the early stages, you’ll be able to track which perform best. You can then focus your efforts on improving those.
The table below, which shows the various CTR of different ads (a metric that broadly corresponds with eCPM), might prove useful in helping you to decide which ads you should be erring towards when you don’t have any of your own data to go on.
(Source : AppFlood)
Banner: These are small ads that appear permanently on an app’s interface. They are the lowest-performing type across all media (browsers as well as apps).
Interstitial: Also known as “full page” ads, these fill the entire screen of the user’s device. They have one of the highest eCPM rates.
Video: Usually (but not always) an interstitial ad. These can be either “voluntary”, where the user can exit the ad, or “forced”, where they are only able to return to the interface after a period of time.
Native: Ads that are built into the design and flow of the game. Discussed in more detail below.
Panel or List: Ads that list a selection of potential apps that the user may want to download. They are amongst the top performers.
Advanced Overlay: Mini-games and interactive ads. Covered in more detail below.
The important thing to remember here is that there’s no one-size-fits-all solution. The indie game, Flappy Bird, for instance, generated 50K a day from banner ads alone.
Find what works for you then run with it.
4. Use NEW formats
Following on nicely from the above point, it’s worth experimenting with new ads, either by actively seeking networks that provide them or enabling them in the networks that you already use. If you can make sure that you’re constantly testing new types of ad media, you’ll be giving yourself a leg-up over the competition.
In December of last year, Google launched two new formats. Trial Run Ads (pictured on the left) allow users to play a mini-game for sixty seconds or so whilst being given the option to download. Interactive Interstitial Ads (pictured on the right) allow advertisers to create a unique, interactive experience for the user. Both offer interesting possibilities.
(Source : Crealytics)
Another area for consideration is that of panel ads and lists, both of which offer multiple “app-install ads”. Certain networks, like ClicksMob, offer attractive CPI (cost-per-install) options that allow publishers to take extra advantage of these high-performing ad types.
Writing in Tech Insider, Mark Hoelzel said that, “The mobile app-install ad — an ad unit that directs users to download a mobile app – arguably offers the most measurable return on investment (ROI) of any major mobile ad format, and has seen a massive rise in popularity among marketers.”
One more great example of an interactive ad, which is especially unique, is pictured below. It’s from hoteliers Westin.
(Source : Mashable)
5. Offer Rewards for Watching Ads
If you’re not already doing so, then offering virtual goods in exchange for watching an ad is one of the easiest and most effective methods for ramping up eCPM. Because you have user-consent, you’re able to push the most aggressive, intrusive ads that are available to you. Invariably these have the highest monetization success.
Vungle provides an interesting case study in regards to this tactic with the app Pic Stitch. They allowed users to earn a bundle (typically worth $0.99) simply by watching an ad. The result was an increase of 300% in eCPM.
App network Fyber has shown that users who receive a reward by engaging an ad are twice as likely to buy in-app purchases in the future.
6. Filter with Chartboost to Delete Low-Performing ads
Chartboost was mentioned earlier as a potential network to try out for improving targeting. The unique thing about it is that it offers publishers the ability to pick and choose which advertisers they want to work with. It’s relatively easy to run your own tests to find the best performers and focus on them exclusively.
You can read a full Tutorial on how to do it here.
7. Include ads at High-Investment Points
The key to making sure that you deliver intrusive ads to your audience in a sustainable way is by integrating them with game-flow. If you’re app is particularly immersive, ads shown before the game starts will work well. This is the strategy that the New York Times Crossword uses.
8. Use Native Ads
Native ads are built into the flow of the app itself. They’re particularly popular with developers who have news or “reader” apps, as in the example of Keek below. But they also lend themselves to mobile games as well.
(Source : Mobup)
Compass Point: West, who have an average eCPM of $10 – $20, have used this strategy extensively. They have effectively used the method of offering virtual goods in exchange for watching an ad, but, uniquely, have also built it into the continuity of the game itself.
(Source : Fyber)
9. Advertise Your own Virtual Currency
Finally, consider implementing ads for your own in-app purchases. These aren’t ads in the typical sense (they’ll work as pop-ups that lead people to a buy page) but essentially fulfil the same function. Networks like Ad Colony provide this functionality.
One developer, who achieved an eCPM of $10, writes about her experience with the strategy: “To implement – we simply removed the full screen interstitial ads we had been serving through our ad mediation partner (MoPub). We then used this ad space for a pop-up ad that we designed in-house offering a user 10 coins for watching 1 video, or 100 coins to watch 5.”
There are numerous strategies for appreneurs and developers who want to increase their eCPM. Whilst taking a diverse approach, split-testing and choosing the best networks are all important, it’s also vital that you find the approach that works best for you. The many case-studies cited in the article are testament to the fact that there is no universal approach that works for everybody.
One final point: don’t forget about fill rate. Whilst eCPM is a fairly reliable metric, it doesn’t account for those ad requests that aren’t served. So if an app requests 1000 ads but the network only returns 500, your eCPM will be artificially reduced. That’s why it’s vital to make sure you’re incorporating the tips about choosing the right network.
Anyhow, there you have it! Let us know your own tactics for increasing eCPM in the comments section below!