Getting introduced to the mobile app monetization world can be quite difficult and confusing nowadays with the overflow of terminologies that a new app publisher may has to get familiar with. Going back to the beginning, we will try to list some basic terminologies widely used in mobile monetization and mobile advertising in general, in order to provide a better understanding to newcomers.
Types of networks
In the monetization landscape you will meet different type of networks that get involved at different parts of the monetization process.
Mobile Ad network
An ad network connects advertisers with app publishers who wish to host ads within their apps. Its key functionality is to match advertising space provided by a publisher, to advertising demand. An ad network usually gets access to a publisher’s ad space through an SDK, an API integration.
Mobile Survey network
A survey network connects market research companies and brands with app publishers who wish to host surveys within their apps. Its key functionality is to find the right respondents for surveys on the platform, as provided by the publisher. A survey network usually gets access to a publisher’s app through an SDK, or an API integration.
Mobile Affiliate network
An affiliate network acts as a middleman. It sells or buys mobile ad space on behalf of other third parties. They are mainly aggregators of different types of traffic that they try to optimise and work on a performance base.
Mobile Mediation network
A mediation network allows the organisation of ad networks by providing transparency on the available demand sources through a centralized platform. With the use of mediation, publishers can optimize networks within their apps based on different data like fill rate, eCPM, CTR and filter out using different options like geos, device types etc in order to optimize to highest paying ad demand for their ad space.
Types of integration
There are different ways an app publisher can integrate a monetization network. Below we list the 3 most widely used.
A Software Development Kit (SDK) is a set of software development tools that help developers create new software. An SDK by a monetization network usually allows the allocation of ad or survey space for an app, or enriches its functionality to allow monetization of the relevant app.
An Application Programming Interface (API) defines how software components should interact with each other. This kind of integration is usually used by ad networks to establish a communication of a server side software component with a publisher’s ad space.
Types of Monetization Units
When a publisher decides to integrate a monetization network he is usually presented with several different types of monetization units. Below you can see some of the most popular ones.
Banners are ads placed in rectangle units of predefined dimensions.
Interstitials are full screen or big popup ads that are usually placed between transition points within or while entering or exiting a mobile app (e.g. the change of a game level, app launch, app exit and others)
An offer wall is a monetization format where users are prompted with a full screen landing page wall of targeted offers that provide users with virtual items/credits/features or levels unlocks in exchange for registration, downloads or others.
Lock screen ads are ads rendered on the lock screen of an app. Usually a user may decide whether or not to engage with that ad or unlock his/her phone.
Video ads (Skippable or Non-Skippable) are usually full screen video ads that are rendered in a similar approach to interstitials.
Rewarded Video Ads
With rewarded video ads, users are incentivised with a reward for watching a video until the end.
Surveys are a monetization unit where users are shown a survey and asked to share their opinion.
With rewarded surveys, users are incentivised with a reward for completing a survey until the end.
Ads blended with app’s native user experience to match feel and flow of an app, minimising user interruption.
Ads created by a publisher to promote another app of the same publisher.
Rich Media Ads
Rich media ad units are interactive or animated ad components (like a mini game, or a video)
When deciding to monetize an app, a publisher has to choose between a variety of monetization strategies.
Used to refer to a monetization strategy where an app is provided as a paid app.
Is the combination of “free” and “premium” and is used in apps world to refer to a strategy where an app is provided for free but offers also in-app paid options like virtual goodies, ad removal etc.
In-app advertising model refers to the strategy where an app is provided for free but includes advertisement in order to generate revenue for the publisher. It is usually included in the general freemium category.
Is the combination of “paid” and “freemium”. This blended model refers to a monetization strategy where an app is provided as a paid app but also provides in-app purchase options and/or ads to increase revenue streams for the publisher.
The subscription model provides an app for free, however users are allowed to login and use that app and its full functionality by paying a monthly fee.
In mobile advertising users can be tracked in several different ways. Some of them include:
Advertising Identifier or IDFA
An advertising identifier (Android) or IDFA (iOS) is a temporary/ resettable device identifier that identifies a user across apps, mainly used for delivering interest based ads (as enforced by Google and Apple policies).
Cookies are a small piece of data (text file) stored in a user’s web browser, while the user is browsing. That data is used to recall information about the user in future sessions.
The amounts of days (X) that must pass by, until the monetization network sends the payment to the publisher for his previous month’s earnings(can be week, day etc – depends on network’s payment cycle) .
Campaign revenue models
There are several revenue performance metrics/models out there that define the relationship of a publisher with a monetization network. Each monetization network follows a different model and publishers usually choose their networks depending on which model best works for them, based on the context of their app.
Cost-per-click (CPC) is a payment metric describing the amount of revenue paid to a publisher for each ad unit that is being clicked. This amount is specified by the advertiser.
Cost-per-acquisition or cost-per-action (CPA) is a model where a publisher gets paid for a completed action. This action can be anything like a form submit, install of an app, completion of a survey etc. Price to be paid for each action is predefined by the advertiser.
Cost-per-mile (CPM) is a model where a publisher gets paid per thousand ad impressions.
Cost-per-install (CPI) is a model where a publisher gets paid if a user installs and uses an app through an advertisement from the publisher’s app.
Cost-per-View (CPV) is a model where publisher gets paid after viewing an ad (for example a video).
Cost-per-Completed-View (CPCV) is a model where publisher gets paid after a successful view of an ad (for example watching a video until the end).
K factor is a metric to measure the virality of an app.
Formula: No. of invites X Percentage of conversions from invites
A user is considered active if he has opened the app within a provided timeframe.
Daily-Active-Users (DAU) refers to the number of users per day. This metric is used to measure user engagement and retention.
Unique-Daily-Active-Users (UDAU) refers to unique number of users per day. This metric is used to measure user engagement and retention.
Monthly-Active-Users (MAU) refers to number of users per month. This metric is used to measure user engagement and retention.
Unique-Monthly-Active-Users (UMAU) refers to the number of unique users per month. This metric is used to measure user engagement and retention.
Average-Revenue-Per-User (ARPU), as its name states, is a really good metric to measure the performance of a monetization strategy.
Formula: Total revenue / No of users
ARPDAU or ARPU-DAU
Average-Revenue-Per-Daily-Active-Users (ARPDAU), as its name states, calculates average revenue per daily active user.
Formula: Total revenue / No of daily active users
Average-Revenue-Per-Paying-Active-Users (ARPPU) calculates the average revenue per user after users have been converted to paying customers.
Formula: Total revenue / No of paying users
Life-Time-Value of a user in an app reflects the revenue accumulated by a single user while staying and interacting with the app during a predefined period of time.
Several metrics are used to calculate a network’s performance. Some of them include:
Refers to the number of times an ad was available compared to the number of times it was requested.
Formula(%): No of ads received/ No of ads requested X 100
estimated-Cost-Per-Mile (eCPM). In advertising it refers to the estimated cost per thousand ad impressions.
Formula(%): Total revenue/ No of ad impressions X 1000
Refers to the number of users performing a desired action (for example installing an app or completing a survey).
Formula(%): No of users that took an action/ No of ad impressions X 100
Usually used along with fill rate metric to refer to top geographical areas where the network has good fill rates in terms of ad inventory.
There are several ways to measure the effectiveness of a campaign. Below are some key metrics used.
Click-Through-Rate (CTR) refers to the ratio of clicks on ad impressions. Used to determine the performance of an ad campaign.
Formula (%): Total clicks/ No of ad impressions X 100
Return-Of-Investment (ROI) describes the eventual benefits of an ad campaign compared to its cost.
A metric defining of how many times an ad was shown.
Conversion tracking is the tracking of specific events or actions though an app and is used by advertisers to measure the performance of their campaigns. These events or actions are defined by the advertiser as the campaign goals.
Latency describes the delay (time difference) between a request for an ad and the response time for that. In general, it refers to the lag for displaying an ad.
Is the process of limiting ad serving to a user based on a specific number of views, clicks or other actions.
Is the management and optimization of ad serving from different ad networks through a single interface.
Is the process of targeting a user based on his previous actions/history.
Is the process of buying enchased functionality, virtual goods or something else within an app.
Inventory is the available advertising space provided by a publisher. It can also be used by advertisers to describe the available ads they have from clients.
User acquisition is the process of getting users to download an app or get/read or use a publisher’s content.
Bot farms in mobile advertising refer to fake mobile accounts that are used to drive big number of downloads of an app in order to affect the app’s ranking on relevant stores. This is a black hat practice and is banned from all major app stores.
Programmatic is the use of software to automate the process of negotiating, purchasing and selling of advertising.
A Data Management Platform (DMP) is a data warehouse responsible for collecting, analysing, managing and integrating large volumes of structured or unstructured data. DMPs are really useful for optimising ad campaigns by providing data needed to effectively target those campaigns.
A Demand Side Platform (DSP) is a system that allows marketers, advertisers or agencies, buy advertising inventory through multiple ad exchangers within one single interface. DSPs facilitate buyers with RTB access across multiple sources of ad inventory. With the help of DSPs, efficient buying and tracking of ad inventory takes place by utilisation of data that helps marketers reach the most relevant audience with their bids.
A Supply Side Platform (SSP) is a automated system that allows publishers to maximise their revenue by exposing and eventually selling their ad space to multiple potential buyers/bidders. An SSP is the equivalent of DSP on the publisher’s side. SSPs allow publishers to connect their ad inventory to multiple ad exchangers and sell their ad space at the highest price.
Real Time Bidding (RTB) is the process where ad inventory is bought and sold simultaneously in an automated way through programmatic means. During RTB, auctions take place where ad space provided by publishers is being sold to advertisers that offer the highest price during the automated action.
An ad exchange is a marketplace where publishers make available/publish their ad space inventory and marketers and advertisers bid and buy the most relevant space for them through real time auctions. DSPs decide automatically which of these impressions are most suitable for an advertiser to buy. The price of each impression is finalised through real time bidding. Ad exchange marketplaces provide efficiency and transparency, enabling advertisers to purchase ad impressions that are most cost-effective and relevant, while publishers are able to sell their ad space to the highest price.