Leadership Perspectives

Four Ways Ad Publishers Stumble Over Monetizing Ads

Guest Contributor

Mobile ad monetization doesn’t end with the advertising network’s SDK integration, even if an ad network of choice comes pre-packaged with either analytics, or support for a mediation platform like HasOffers. Developers all too often step into the trap of thinking that earnings will increase week-over-week, and that simply observing earnings will suffice. Unfortunately monetizing ads not only takes work, but practice and experience. To save developers from wasted resources, time, and money, we’ve outlined the four common errors that mobile ad publishers make with monetizing mobile apps.

Developers don’t have a monetization strategy

You’d be surprised how many developers don’t have a monetization strategy. Of the developers that have decided to monetize their growing userbase and install an SDK, AppFlood has found that as many as 20% of indie developers have selected an ad network without much of a reason. What is their explanation? These developers simply “took a chance” on an ad network. What does this tell us? Developers are making crucial monetization decisions without a plan of action. App developers need to do their due diligence, whether that means researching ad networks and ad formats, A/B testing, or even investing in a burst campaign.

Misunderstanding eCPMs

There’s “analyzing analytics,” and then there’s analyzing analytics. Publishers might simply eye earnings and eCPMs and call it a day. For these types of developers that analyze eCPMs, they’ll tend to buy into the common misconception that earnings are directly tied to eCPMs. However eCPMs simply measure the quality of the advertiser. In other words, low eCPMs doesn’t equate to smaller earnings since you need to factor in the total volume of impressions. To illustrate this, the equation to calculate earnings looks like:

Revenue = Impressions x eCPM

Stopping tests after the first win

Experiment, test, revise, and repeat. The mobile ad industry is constantly changing. Developers will find themselves generating high eCPMs and satisfactory mobile ad earnings with the expectation that the money generated will continue to roll in, only to find out a month later that their eCPMs and revenue have suddenly plummeted. While the decline could be blamed on the season if the holidays have just passed, in many instances boosting earnings is within the publishers’ control. Increasing revenue will be a case of additional testing and optimization, whether that means identifying and allocating traffic to high eCPM advertisers, locking in a direct deal, or substituting a low-performing ad format.

Unable to find a balance between more and less

Advertisers will tell you “less is more,” and might correlate this mantra to higher earnings. There may be truth to the native advertising buzz when it comes to true native ad compatible apps like mobile social networks. But not every app developer has an app as large as Twitter or Facebook in their back pocket, few could support an in-house ad exchange for their native apps. Instead many ad publishers are keen simply on selecting provided, but effective ad formats including interstitials, app lists, panel ads, and sometimes even banners. With realistic expectations in mind, we’d opt for a balance between less and more.

Why? We’ve noticed that strategically pushing ads to users works. Interstitial ads, for instance,e pop up not randomly but before an app closes, or after a “Game Over” screen. While technically speaking the interstitial interferes with the user experience, we’ve found that interstitials earn more money than mobile ad formats that aren’t intrusive like app lists and panel ads – these require people to trigger the format, which opens by users tapping on a navigational button. Panel and app lists might have higher conversion rates, but interstitials simply generate more impressions and attract more clicks to out earn all other display ad formats on AppFlood.

What ways do you think publishers struggle with monetizing ads? Let us know your thoughts in the comments.

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