Mobile advertising is indispensable in generating revenue for developers and publishers alike, often determining the success or failure of an app or game in the increasingly competitive market.
According to our internal research, 91% of top-grossing games are using ads to monetize their games, alongside other monetization methods, such as in-app purchases, subscriptions, etc.
Understanding and optimizing the key metrics in mobile ad monetization is crucial for maximizing revenue and enhancing user experience and engagement. Focusing solely on the top line, such as the number of downloads, can be misleading and result in suboptimal strategies that ultimately hinder long-term success. Seasoned monetization managers know that delving deeper into these metrics is essential to unlocking the true potential of mobile advertising.
In this article, we’ll outline the most critical metrics for mobile ad monetization that experienced professionals should keep a close eye on. We will dive into each metric, discuss the factors that impact them, and provide actionable optimization tips.
By understanding and leveraging these key performance indicators, you will be better equipped to fine-tune your monetization strategies, ultimately driving higher revenue and securing a competitive edge in the ever-evolving mobile gaming industry.
Ad revenue is the total income generated from ads displayed within an app or game. As such, it is one of the key indicators of the success of an ad monetization strategy. By monitoring and analyzing ad revenue, developers and publishers can make data-driven decisions to optimize their monetization strategies, identify areas for improvement, and allocate resources more effectively.
Ad revenue is the money generated through in-app advertising and is calculated by multiplying the eCPM by the total ad impressions.
Ad Revenue = eCPM * Ad impressions/1000
Several factors can influence ad revenue, including:
To maximize the potential of your ad monetization strategy, it is essential to implement optimization techniques that effectively address the factors influencing ad revenue. Based on the factors listed above, consider implementing the following methods:
Ad impressions refer to the number of times an ad is displayed, indicating the reach and visibility of ads within your app or game.
Ad impressions and clicks should not be mistaken for one another. Ad impressions represent the number of times an ad was viewed by users and is not dependent on how many times those users clicked on the ad.
Several factors affect ad impressions:
To optimize ad impressions, consider implementing the following strategies:
eCPM, or Effective Cost Per Mille, is a vital metric in mobile ad monetization. It represents the estimated revenue generated per 1,000 ad impressions, providing insights into your campaigns' overall performance and profitability. eCPM allows you to compare different ad networks, ad formats, and campaigns, making it an essential tool for optimizing your monetization strategy.
To calculate eCPM, divide the total earnings from a specific ad campaign by the total number of impressions it received, then multiply the result by 1,000:
eCPM = (Total Earnings / Total Impressions) x 1,000
This metric can reveal valuable information about your ad monetization strategy. A higher eCPM indicates that your ads are more effective in generating revenue, while a lower eCPM suggests that there may be room for improvement. By analyzing eCPM, you can identify high-performing ads, ad networks, and areas that may require further optimization.
To optimize eCPM, consider the following:
The fill rate in mobile ad monetization represents the percentage of ad requests successfully filled with ads. It is calculated by dividing the number of ads served by the total number of ad requests made. A high fill rate indicates that a large portion of ad requests is being met with relevant ads, while a low fill rate suggests that there might be missed monetization opportunities.
Fill rate = Ads served (Impressions) / total number of ad requests
The fill rate can be analyzed at both the app and the instance levels, and understanding the difference between these levels is essential for optimizing your ad monetization strategy.
The fill rate plays a vital role in ad monetization by directly impacting the revenue generation potential of your app or game. A comprehensive understanding of both app-level and instance-level fill rates is essential to optimize your monetization strategy effectively.
The engagement rate in ad monetization measures the percentage of daily active users that has watched at least one ad. It is best to track it per ad format. It is typically calculated by dividing the number of users that watched at least one ad by the total number of ad impressions served. A higher engagement rate indicates that users find the ads relevant and engaging, leading to better monetization outcomes.
Engagement rate = Engaged users / Total active users
Several factors influence the engagement rate in ad monetization:
To optimize engagement rates, consider implementing the following strategies:
Usage rate in ad monetization refers to the number of ads displayed to an average user that has watched at least one ad. It is calculated by dividing the number of unique daily ad views by the number of unique users that watched at least one ad.
Usage Rate = Total Ad Impressions / Total Engaged Users
Engagement and usage rates are critical metrics that reveal the monetization potential of a given game. Engagement rate represents the percentage of users engaging with ads within an app, while usage rate measures the number of ad impressions per the same user. These metrics illustrate how effectively a developer encourages users to engage with ads and how many users interact with the maximum number of ads possible.
The dual objectives of optimizing engagement and usage rates are to maximize the number of users engaging with ads and encourage those users to interact with as many ads as possible. One approach to increasing engagement and usage rates is developing an effective rewarded ad strategy. Rewarded ads offer users valuable incentives, such as in-app currency or premium content, in exchange for engaging with ads.
To create a successful rewarded ad strategy, ensuring that the value exchange is worthwhile for users without undermining the in-app economy is crucial. Striking the right balance between incentives and in-app value can motivate users to repeatedly engage with rewarded ads, increasing engagement and usage rates.
Impressions per Daily Active User (IMPDAU) is an ad monetization metric developers use to gauge the effectiveness of their ad monetization strategy in terms of daily ad impressions. It calculates the average number of ads displayed to each active user on any given day.
To determine IMPDAU, divide the total number of daily ad impressions by the number of daily active users:
IMPDAU = (Total Daily Ad Impressions) / (Daily Active Users)
IMPDAU plays a vital role in evaluating the ongoing success of a monetization strategy. This metric is particularly useful in various scenarios, such as assessing the impact of new bidding partners or adjusting a waterfall setup, analyzing ARPDAU, and evaluating the effects of new game features.
Average Ad Revenue Per Daily Active User (Ad ARPDAU) is used to quantify the daily revenue generated from ads by each active user.
To calculate Ad ARPDAU, divide the total ad revenue earned from the app or game within 24 hours by the number of active users during the same period:
Ad ARPDAU = Total Ad Revenue in 24-hour Period / Number of Active Users in 24-hour Period
By monitoring ARPDAU, developers can gain insights into daily ad performance, evaluate the impact of placement changes, events, or promotions on revenue, and utilize the data to make informed decisions for improving ad performance and measuring outcomes.
Understanding and optimizing the key metrics we’ve outlined above are crucial steps for maximizing the potential of your mobile ad monetization strategy. By leveraging these metrics effectively, you can create a more engaging and profitable experience for your users.
If you want to level up your ad monetization strategy, consider partnering with GameBiz Consulting. Our team of experienced ad monetization experts can help you analyze and optimize these critical metrics, ensuring that your app or game reaches its full revenue potential.