How does it work and how much is earned with an application with ads?
September 27, 2018
How do we show advertising in an application? How do we manage to show ads? How do we get the advertisers? Basically we have three options.
1. Create your own advertising network
The first would be the modality used by the big ones. Get a huge mass of users.
Having millions of users and having information about those users, you have gold in your hands. You can offer your own ad platform. Implement a system through which companies or individuals, it does not matter, can go to your app to put advertising according to certain information that you keep from your users. In a few words and said in a clear way, you can sell the information of your users, which is basically what platforms like Facebook do.
That said, obviously this case is within the reach of a few. So we are going to leave it here and we go to other more useful cases for normal people, for humans.
2. Sell advertising to a niche sector
The second strategy would be to get a considerable number of users, but with something in common.
What comes to be a niche.
If you manage to create an application, let’s say, “Hiking Routes” and you get to have, say 10,000 users, you have a niche. In this case, you have about 10,000 people interested in hiking. If these 10,000 people had nothing to do, because the app out of jokes for example, it would be totally different. But if instead, you have 10,000 people, all are supposed to be interested in hiking. What happens? Who could be interested in that? Hiking clothing brands, footwear etc.
What you could try to do, would be to reach an agreement with a brand or store that might interest you. Something of the style, I have 10,000 users who enter X times a day and I offer you an advertising space in my app of such format for X € per month. Are you interested?
Simply what you would have to do would be to program it, add that little advertising within your app, reach an agreement and that’s it. Then you could put some analytics system, take the user to the website of the brand when you click etc.
About what you could earn,
obviously it will depend on the number of people who see the ad, the format to offer and especially the niche of people you have. It is not the same what people spend on coffee, on mobile for example.
3. Use Ad Networks
Finally the third ad strategy that you can follow and which we will be talking about during the rest of the episode, is to show ads through networks. Through companies that are dedicated to find you advertisers.
If you do not have a sufficient number of users to create your own advertising company as we have said in the first option, or have a smaller number of users but segmented enough to have a specific company or brand interested in them, you only have recourse to have someone provide advertisers An intermediary
How does advertising work through Ad Networks?
These networks are basically dedicated to, on the one hand, attracting advertisers and for other applications where they show advertisements. They connect with each other.
The advertiser on the one hand will be able to choose in what categories of applications to leave, in what countries and at what times. As the advertising company will have many small affiliate applications, it will have this potential for its advertisers.
On the other hand, as the owner of the app what you will do is sign up to this network, program the system to show ads within the app and finally configure on the network’s website things like what kind of ads you want, thematic or format. Do you understand, no?
Advantages and disadvantages of using an Ad Network
What are the benefits of this option to show ads? Obviously its simplicity. This is your great benefit. With only 1 or 2 hours of programming you can have your application ready to show ads and start earning money. Nothing to look for advertisers, nothing to program an advertising system, nothing to reach money agreements etc.
On the other hand, as you know, everything has its good and bad things.
In this case the great disadvantage of the system is that you will enter less money than with the other models. The ad networks, or networks of advertisers, we have already said that they are intermediaries. And like any intermediary, he does his part of the work and in return he is going to take away his share of the pie. In this case they will take a commission of what the advertiser pays.
All this means that to obtain a decent income through ad networks advertising, you need a large number of users, or rather a large amount of traffic as we will see now.
Metrics of ad networks
Now let’s see more about how these Ad Networks work and what kind of metrics are interesting.
Once you have implemented the necessary programming within your application, you will be ready to start receiving advertisements. From here from the console of the Ad Network you can access a series of interesting metrics to see how these ads are working.
The first important metric are the requests. What are the applications? The times your application requests an ad.
The following interesting metric derived from these requests is the FillRate or also called MatchRate. What is this? The percentage of ad requests that have been satisfactory. If for example your application has requested 10 ads and has received 10 ads, the fill rate will be 100%. This metric is important to measure the quality of the Ad Network.
Another metric The impressions. Impressions are the times a user has seen an ad. Keep in mind that they are not the same as the requests. It may be that your application requests an ad, receives it and shows it 5 times on different screens, for example. In this case you will have one request but 5 impressions. The amount of impressions will depend largely on you. The number of users, the times you show the ads and the use made by your users of the app.
Now we are going to a very interesting metric, the CTR, the Click Through Rate. What is this? The percentage of times that users click on an ad. Why is this important? As a general rule, you will not get an income because a user sees the ad, you will get it when the user clicks on the ad or in other cases, if the user clicks on the ad and then installs the advertised application. The fact is that what interests you is that the user clicks, the more times the better. The CTR will tell you this. If you show 100 ads and the user only clicks once, you will have a CTR of 1%. What interests you is that this CTR is high. The more times you click on a user in the ad, the more you will enter.
And we go with the last metric. Perhaps the most important and that depends on all the previous ones. The eCPM, effective cost per thousand impressions. This is basically an estimate of revenue match impressions multiplied by one thousand. In other words, what the Ad Network is paying you for every 1000 impressions.
How much is earned with an application with ads?
The great question. How much is earned using these advertising networks? Well the big answer is that it depends. And in this case more than ever. This is the same as asking someone who has a website and has Adwords advertising, or a Youtuber that shows ads on their videos. There are many variables that mark what an advertiser pays.
For example the country. The same is not paid for advertising in the United States as in Brazil. Companies generally pay much less to show an ad in Brazil than in the United States. At the end of the day they will also obtain less income.
Another interesting variable are the dates. For example, Christmas is a time when there is a lot of publicity. They are dates of greater consumption and therefore the advertisers are going to compete more among them and they are going to have to bid more. Result, they will pay more for each ad.
Finally another of the great variables in the price paid for an ad is its format. A tiny banner is not the same as a full-screen ad or video. The video is paid more than the full-screen ad, and the full-screen ad is paid more than the banner. In other words, the more intrusive the user, the more they pay.
Anyway, although I have made it clear that there are thousands of variables that can greatly influence the income, I would get wet based on all the applications that I had with advertising, that about 1000 impressions, about 1000 views of ads, usually equal at € 1. I already say that this data must be taken with tweezers.
What Ad Networks can we currently use?
Admob, Startapp, Chartboost, Leadbolt or MobileCore are examples of AdNetworks that we can use to receive ads within our mobile applications.
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