Intro
It’s definitely not just about in-app purchases anymore.
But accounting for it – and understanding where your ad whales come from – that’s one of the core challenges for growth-focused developers, publishers, and all who focus on mobile marketing. Ad revenue isn’t like in-app purchases, after all, which are explicitly tied to an individual. Advertisements are generally calculated in bulk.
So it’s much harder to know how much a particular user is worth, for instance. Or, whether you’re ROI-positive on a recent cohort of acquired users. Especially when you’re acquiring users from multiple sources, and collecting mobile ad revenue from multiple partners.
In other words, it’s not as simple as multiplying ad impressions by eCPM (effective cost per thousand).
Why ad revenue is growing so fast
What kinds of mobile monetization are working best
How to calculate ad revenue (there’s a trick)
You need a complete picture of your ad revenue
Total revenue: You also need to combine ad revenue with in-app purchase revenue
Profitability per user: Getting a complete picture of your ROI and ROAS
Oh, and you save a ton of time
Next steps: making it happen
Why ad revenue is growing so fast
Anyone playing mobile games knows instinctively: ad-based app monetization is up significantly over the past year or two. An App Annie study confirmed it: 60% more apps are doing ad-based monetization in 2019 over 2019.
The dollar figure? $120 billion by next year.
The market is growing, fast. There’s a big reason for all those billions of ad dollars, and it goes back to a Mary Meeker report in 2016 about a gap in mobile ad spending:
Very simply, there was a gap between people’s media consumption time and brands’ ad spend … a $22 billion gap. Ad buyers, essentially, were lagging the shift in user time and attention and over-allocating to traditional media channels like TV, and under-allocating to the mobile platform. Over the past few years, however, brands and adtech vendors have been rushing to fill that gap. That’s been challenging, of course, because mobile consumption patterns have only increased since then.
But mobile accounted for 62% of digital ad spend in 2018, up from 50% in 2017, even as ad blocking grew.
So the gap is closing fast, thanks in part to the massive growth of ad tech, and the closing of the gap is putting additional dollars in mobile app publisher’s pockets.
What kinds of mobile monetization are working best?
Mobile monetization has come a long way since Flappy Bird.
Remember Flappy Bird? The super-simple hyper-casual game that asked users to do just one thing: tap the screen. If you tapped it just right, Flappy Bird didn’t hit the pipes on top, or the pipes on the bottom of the screen, and you stayed alive.
Crazy simple, but maddeningly hard.
There are much better options for generating app ad revenue now, and a multiplicity of ad formats.
How to calculate ad revenue (there’s a trick)
It seems pretty simple. If you want to calculate ad revenue, add up the checks.
Unfortunately, it’s not that simple.
You need a complete picture of your ad revenue
Fortunately, Singular can help.
Most likely your app ad revenue depends on multiple sources as you work to fill all your ad inventory slots. Singular can collect your average revenue per session data on a cohort-level basis so you know what’s happening for each new cohort of users you onboard. That includes fairly complicated situations where you’re doing multiple ad revenue events.
In addition, Singular connects with Ironsource’s mediation platform. That gives you accurate user-level data on all ad revenue generated per ad network, assuming you’re using IronSource. Essentially, you move from estimation to complete, accurate data.
But that’s not all.
That’s complete coverage, no matter what ad networks or mobile monetization partners you’re using.
Total revenue: You also need to combine ad revenue with in-app purchase revenue
But it’s not enough to have all your ad revenue in one place. You need to put all your revenue in one place with Singular.
Both revenue teams and user acquisition teams need to have a full and complete view of all monetization. A single source of truth for revenue – ad revenue and IAP revenue and any other kind of revenue – is critical so that all teams know what’s going on.
If you don’t have that single source of truth, you don’t have a complete picture of your return on investment (ROI) and return on ad spend (ROAS). And that’s a problem for your user acquisition teams. UA professionals need to know how profitable the users that they are acquiring are in order to make smart decisions about future ad spend and budget allocation.
Profitability per user: Getting a complete picture of your ROI and ROAS
Typically, user acquisition teams do not have easy access to ad revenue. At a time when ad revenue is growing fast and is increasingly a major factor in overall app revenue, that’s a problem.
Without ad revenue, they don’t have a good sense of profitability per user: the cost to acquire a user or cohort of users versus the revenue that user or cohort has driven.
Oh, and you save a ton of time
Complete visibility into total app monetization is a great thing. Even better is getting it without tens of hours spent in Excel or Tableau or your favorite data analysis package.
Frankly, if you’re doing this manually in order to make smarter decisions, you’ll save easily a couple hours a day. That’s probably what you’re spending on just one network daily to do all the math. That’s two hours more to spend on creative, on campaign optimization … or, for some, on social media.
(We’re kidding. We know your single focus is monetizing users.)
With Singular’s analytics, all that manual work is automatic.
And since time is money, you’re not just getting smarter and creating a better monetization model, you’re using our tool to maximize the value of your ad impressions
Next steps: making it happen
Not only can you get a complete picture of the revenue side, you’ll see exactly how it lines up, cohort by cohort, with your cost side … for every user acquisition partner.
Three things you can do to get started: