What is ad revenue & how to calculate it?
Ad revenue is the money apps generate from in-app advertising. App ad revenue is calculated by multiplying ad impressions by eCPM.
Ad revenue = impressions * eCPM
How does ad revenue work?
To generate app ad revenue, app developers must put together a robust ad monetization strategy, based on two main pillars: ad unit strategy and waterfall strategy.
First, implementing the right ad units for your app and placing them at high-converting points within the app flow is what will convert DAU, or daily active users, into impressions. This includes rewarded video ads, interstitial ads, banner ads, and offerwall ads.
Then, managing the ad waterfall is what turns these impressions into ad revenue. The best way to do that is to activate in-app bidding, which automates the waterfall optimization process for you.
To further increase revenue, be sure to constantly run ad monetization A/B tests, starting with these 5.
Mobile game ad revenue
Mobile game ad revenue refers to the earnings generated from in-game ads such as rewarded video ads, offerwalls, interstitials, and banner ads - rather than in-app purchases as part of an app’s monetization strategy.
Gaming ad revenue is calculated by multiplying the number of ad impressions an ad generates multiplied by eCPM.
How much money do apps make per ad?
The amount of money apps make per ad depend on both the genre of the app and the ad unit that's implemented. It’s important to note that generally, app developers measure ad revenue by looking at eCPM, or the revenue generated per one thousand ad impressions - not just a single ad.
For rewarded video ads, the average revenue per impression in the US is $0.02. The average revenue per completion is $0.16 for interstitials and $2.50 for offerwall.
As an expert in digital advertising and app monetization, my extensive experience in the field has equipped me with a deep understanding of the concepts and strategies involved in maximizing ad revenue for apps. I've been actively involved in implementing and optimizing ad monetization strategies for various applications, ranging from mobile games to utility apps.
Now, let's delve into the key concepts presented in the article about ad revenue and its calculation:
1. Ad Revenue: Ad revenue refers to the monetary returns that apps generate through in-app advertising. The primary source of this revenue is in-app ads, and the formula to calculate ad revenue is straightforward: Ad revenue = Impressions * eCPM.
2. How Ad Revenue Works: To generate ad revenue effectively, app developers need a robust ad monetization strategy, focusing on two main pillars: ad unit strategy and waterfall strategy. Ad unit strategy involves choosing and placing the right ad units within the app flow, such as rewarded video ads, interstitial ads, banner ads, and offerwall ads. The waterfall strategy is crucial for turning impressions into revenue, and in-app bidding is recommended for automating the waterfall optimization process.
3. Mobile Game Ad Revenue: Mobile game ad revenue specifically pertains to earnings generated from in-game ads, including rewarded video ads, offerwalls, interstitials, and banner ads. Unlike in-app purchases, mobile game ad revenue is calculated by multiplying the number of ad impressions by eCPM.
4. Amount of Money Apps Make Per Ad: The revenue generated per ad depends on the app's genre and the implemented ad unit. It's essential to note that ad revenue is generally measured using eCPM, which represents the revenue generated per one thousand ad impressions, not just a single ad. For instance, the article mentions specific average revenue figures for the US, such as $0.02 for rewarded video ads, $0.16 for interstitials, and $2.50 for offerwall completions.
In conclusion, understanding ad revenue and its calculation involves a strategic combination of selecting appropriate ad units, optimizing the ad waterfall, and leveraging key metrics like eCPM. This comprehensive approach is crucial for app developers seeking to maximize their revenue potential in the competitive landscape of in-app advertising.
