Monetizing with Mobile Ads: Key Ad Formats and Performance Insights
The mobile ad industry is growing day by day. For a long time ads have been associated with annoying pop-ups. Today mobile ads come in many shapes and forms to create positive user experiences. Advertisers and mobile app publishers strive to be matched well, often through ad networks, ad mediation or/and ad exchange, in order to have mutually beneficial outcomes.
Forecast says, that by 2021 the in-app advertising market will skyrocket to $201 billion. Compare this number to $72 billion in 2016. This triple surge is quite impressive given how just 10 years ago the mobile ad market share in the U.S. was estimated at just $320 million.
Why did mobile app advertising take off? Not a difficult question to answer—smartphones, mobile apps and instant access to information have become an integral part of our daily life. And users want apps to be free, which is made possible thanks to mobile advertising. Therefore, mobile advertising has naturally become a valid, fully functional monetization source for mobile app publishers.
Mobile app advertising is no longer associated with intrusive delivery and irrelevant low-quality ad traffic. Often, premium quality ads are present in top applications from companies like Playrix, Zeptolab, Supercell and others. Ads can even make a good companion to boost in-app purchases.
How Mobile Ads Are Selected
Placing in-app ads is usually arranged between three parties: app publisher, advertiser and ad network or another ad demand sources that serve as a connection point. Ad networks are one of the key players in the advertising market of mobile applications. Why do networks exist and how do mobile ads work? The key function of an ad network is to match ad space (Ad Supply) from publishers with the advertiser's request (Ad Demand). In other words, an ad network gives an advertiser an opportunity to display their ads in a number of applications that are connected to that ad network. Ad networks regulate the market and facilitate interactions between advertisers and publishers and are connected to apps via SDK or API.
Nowadays, instead of integrating each ad network’s SDK individually, mobile app publishers can just integrate one ad mediation SDK into their app and receive ads from numerous ad demand sources, including ad networks along with DSPs (demand-side platforms) and ad exchanges. The rise in popularity of ad mediation has simplified the process of getting started with monetizing your app with ads tremendously.
Another reason why mobile app ads have become such a popular monetization source now is the low maintenance required. Whereas before publishers needed to spend hours every week to manually optimize their ad setups in order to make sure they filled up their ad inventory to generate optimal revenue, ad mediation platforms can do that programmatically. With advances in how ad bids get placed and selected via real-time unified auctions through the industry’s latest in-app header bidding technology, the highest earning ads for each ad placements are now selected and delivered automatically.
With that in mind, some ad networks perform better in terms of revenue depending on the region and the ad format as well as the platform (iOS or Android). So if you are considering or are already monetizing your app with ads, understanding the disparity in performance can help you make more informed decisions, such as whether you should prioritize rewarded videos over banners in certain regions or not.
Best Mobile Ad Formats
If the first thing you think of when you hear the word ‘ad’ is a banner, then you’re being realistic. However, banners now compete with multiple interactive ad formats that serve various purposes within an app. Apart from banners, the ad formats that have proven to be the most popular and the most profitable for app publishers are rewarded videos and interstitials.
Rewarded videos are user-initiated ads from which users can earn in-app rewards in exchange for viewing a video ad. Rewarded videos have shown to be very popular with users, advertisers and publishers alike. Thanks to the high satisfaction of users and high CTRs of this format, publishers can earn the highest eCPMs (earnings per thousand ad impressions) with rewarded videos. Publishers also find using rewarded videos to be an effective way to introduce their users to the app’s in-app currency system, which can lead to higher rates of in-app purchases.
Interstitials are attention grabbing ads that cover the entire screen and can appear as a static image, a video, an interactive image or a playable sample of an app. Although this format can be more disruptive to the user experience than others, when placed at the right moments within an app, interstitials are a great choice for publishers to use. They offer high CTRs, high eCPMs and high availability of ads. Plus, newer variation of this format, like interactive and playable ads, continue to make this format more user-friendly and engaging.
Banner ad is the longest enduring mobile app ad format that neatly places a small rectangular ad at the top or bottom of the screen. Despite this format’s low CTR and low eCPM, it is still considered a high earning format for publishers. This is largely due to its ability to be shown with much higher frequency than other formats. Its low cost and easy production sustain the popularity of banners among advertisers, providing publishers with high supplies and varieties of banner ads.
Mobile Ad Earning Performances
To find out how well the ad formats perform among over 60 ad demand sources in 2019, let’s take some of the most recent insights from our Appodeal Mobile In-app Ad Monetization Performance Index. The three regions analyzed here are the U.S., Western Europe and Eastern Europe (including Russia).
Rewarded videos’ eCPMs continue to climb up but at a more modest pace than the previous year. For example, the U.S.’s rewarded videos on iOS and Android both saw their eCPM increased by 13% to a high average of $15.18 and $12.68 respectively from H2 2018 – H1 2019 compared to the same period the previous year. Some of the top earning ad networks from the three regions analyzed for rewarded videos were AdMob, Facebook, AppLovin, Unity Ads, BidMachine and MyTarget.
Interstitials’ eCPMs increases significantly on Android in U.S. and Western Europe. Interstitials, which includes static, video and playable variants, showed impressive eCPM growth on Android by 27% to an average of $6.35 in the U.S. and by 21% to an average of $2.38 in Western Europe from H2 2018 to H1 2019 compared to the same period the previous year. Some of the top earning ad networks for interstitials were AdMob, Facebook, AppLovin, Unity Ads, BidMachine, Ogury, and Yandex.
Banners are still important for revenue base but their eCPMs show signs of decline. Banners accounted for around a quarter of the ad revenue share. However, on Android in Western Europe, its eCPMs decreased by 27% to an average of $0.16 from H2 2018 to H1 2019 compared to the same period the previous year, and decreased by 15% on iOS. Interestingly, in the U.S. its eCPMs actually increased by 13% to an average of $0.62 on iOS. Some of the top earning ad networks for banners were AdMob, MoPub, BidMachine, Amazon Ads, AppLovin, Yandex and MyTarget.
The eCPM gaps between iOS and Android devices show significantly wider margins in developing markets than mature markets. In mature markets, such as the U.S., Japan and the U.K., the eCPMs of rewarded videos were 21-34% higher on iOS than on Android devices. However, in developing markets, such as Russia, Brazil and India, the eCPMs were 98-352% higher on iOS than on Android devices.
For more details and insights, check out the full version of the Appodeal Performance Index here. This third annual index focuses on in-app ad revenue and provides insights for mobile app publishers on the top earning mobile ad networks, ad exchanges and DSPs, along with their eCPMs, the average eCPM of each country globally and the eCPM trends of mobile ad formats on both iOS and Android devices.