Many app publishers today struggle to improve the average eCPMs (effective cost per thousand impressions) and ad fill rates they receive from the ads served to their users. This puts them in a bind, as revenues stagnate and impact the overall business model.
In-app mobile ad spend is growing; around 25% of all digital media budgets are now going towards apps, according to a recent survey commissioned by Forrester. But how is this rise impacting app publishers?
According to research we conducted last year, more than half of publishers saw ad revenues decline or remain the same in the previous 12 months. This is a critical point, as over 50% of apps monetize through advertising.
So what can developers and publishers — especially those small businesses — do to gain more revenue from demand sources and ad networks? Are there steps they can take to make sure all potential ad placements are filled and that every single ad unit is boosting the bottom line?
To improve revenue and fill rates, follow these five steps:
Header bidding solutions have helped to boost both fill rates and ad revenue on the desktop/browser side when they were first introduced a few years ago. Now that header bidding-like platforms are becoming available in the mobile app space, the technology is poised to help app developers and publishers see similar benefits.
In-app header bidding solutions are initialized before the primary mediation and works by having various demand sources compete against one another in real time as soon as a potential advertising opportunity arises. The winner of this auction then either gets to serve their ad or insert their winning bid into the waterfall. By increasing pre-bid competition, in-app header bidding boosts revenue and eCPMs through added competition.
In-app header bidding, when combined with unified auctions, has already helped many app publishers. Apps running unified auctions saw a 44% increase in CPMs, a 48% increase in ad revenue and a 28% decrease in ad load times compared to their peers. No wonder header bidding auctions facilitated by InMobi’s mediation solution rose 56% between the second quarter and fourth quarter of 2017.
“At the end of the day, everyone should be doing in-app header bidding,” says Mike Brooks, Senior Vice President of Revenue at WeatherBug. “If your app has a programmatic business today, then it’s time to switch to header bidding.”
Not all ad placements are created equal. Format, frequency, timing and much more impact both how users think of an ad and what an advertiser pays.
For example, consider banner-style display ads. These are by far the most popular ad format in the mobile app space and are therefore easy to fill. Apps don’t always have a 100% fill rate for banners, but they do boast some of the best fill rates of any ad format.
But that’s just one side of the coin when it comes to banners. They have an extremely low click-through rate, which helps to explain why banner ads cost just $1 on average. Compare that to a native ad, which had an average CPM of $10 in 2018.
Format isn’t the only consideration to make as well. Time of day, type of connection and ad frequency (i.e. how many ads someone has already seen, especially within the same app environment) all affect both fill rates and payouts around ad impressions.
Just like a stock portfolio, it helps to be diversified. Including a wide variety of ad formats and potential ad placements ensures that all of the bases are covered.
Unfortunately, many marketers today are still grouping together mobile web and mobile in-app advertising. Just because they are on the same device doesn’t mean they’re the same thing!
In-app mobile advertising offers many benefits not found in mobile web environments, from a lack of ad blockers to better geotargeting and much more. And, in-app environments are proven to be safer and less prone to fraud than mobile web.
App publishers and developers can help themselves by evangelizing these differences. The more advertisers know about the many benefits of the in-app space, the more likely they are to spend in this ecosystem — and to have a greater volume of ads to run.
No two members of your user base are the same. When apps understand the nuances and differences of their audience, they can improve their monetization efforts accordingly.
For instance, consider the differences in audience as it relates to geography. While the average CPC (cost per click) is over $0.50 in Sweden, it’s around $0.03 in Bulgaria. This shows that advertisers are willing to pay more to reach people in Sweden than they are in Bulgaria. Similarly, brands may be willing to pay more to reach users in some parts of the U.S. over others; by offering this information when available to advertisers, publishers can increase demand for their ad inventory.
Location is not the only determining factor here as well. Occupation, previous buying habits, proclivity to spend in app and many other factors impact how an advertiser views someone — and whether or not they want to get an ad in front of them. App publishers can strategically deploy these
One of the best things app publishers can do for themselves is to have a pragmatic and practical mindset when it comes to mobile in-app advertising. No app is going to have a perfect fill rate, nor will ad revenue grow exponentially every month. But, by taking key steps and setting achievable goals, app publishers and developers can set themselves up for success.
“Do you have, or have you seen, a mobile advertising roadmap for how your ads revenue is going to increase this year?” says Chas Castell, founder of app consulting firm PubRev+. “Do you know how big the opportunity is? What is your monetization strategy? What are the initiatives you want to pursue? It may seem like short-term pain, but the first step to starting a process that can transform your company - such as ads monetization - is really understanding where you are. Once you can honestly say ‘I am here,’ then you can see how much you need to do to get to where you want to be.”
What else do you think apps can do to improve both fill rates and CPMs? Let us know on social media! We’d love to hear your thoughts on LinkedIn, Twitter and/or Facebook.
Interested in learning more about the state of in-app monetization today? Be sure to check out these resources:
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