How to Optimize Your Mobile Ads (Part 1 of 3)

Thursday, August 25, 2011
By: Bryan Atwood

More and more, we’re hearing MoPub customers ask “How can we maximize our ad revenue without serving a bunch of junk to our users?”

After serving 1.5 billion+ impressions last month, we’ve learned a lot of do’s and don’ts that aren’t always obvious to all of our users – and this is true for both industry veterans and development newbies. This post kicks off our three-part series on mobile advertising best practices so that mobile pubs can get the most out of their revenue streams – and still ensure a great user experience.

Part I provides an overview of mobile advertising and analyzes optimal strategies for ad networks.  Part II investigates best practices for banner advertisements and Part III gives an overview of full-screen, rich media and video advertisements.

Part I: Mobile ad networks: The quick and dirty

Despite the large number of mobile ad products out there, it’s still really tough for publishers to find info on which ad network techniques work and which don’t.  For many pubs, it’s also a confusing balancing act for how to maximize their mobile ad sales while maintaining a good user experience.  With over 1.5 billion impressions flowing through our system every month through over 400 publishers, we’ve been able to see an extremely broad range of ad performance.  And with that data, we’ve analyzed and understand what techniques work best and which ones don’t.  We don’t claim to know everything about mobile ads, but we wanted to share some of our findings.

Good numbers to know: Realistic performance expectations

Before we dive into optimization, it’s good to understand what kind of performance to expect from mobile ad networks.  The mobile app advertising landscape is somewhat different than the desktop web and sometimes pubs expect much higher performance out of mobile ads than the market can support.

For starters, although desktop ad networks typically pay on the number of ad impressions (cost-per-thousand-impression, or CPM), most mobile ad networks operate on a cost-per-click (CPC) basis.  This means that just showing more advertisements to users may not result in more revenue for you like it does on desktop, unless you can get a corresponding rise in the number of clicks.  The CPC rate from the top networks is somewhere around 4-5 cents for 320×50 banner ads – although at any given time it can go quite a bit lower than this.

The revenue that you generate then is the number of impressions times click-through-rate times cost-per-click (imp x CTR x CPC).  Click-through-rate can vary widely and is in fact the most important number to focus on.  A good target to aim for is around 1% CTR.  However, we’ve seen publishers with 10% CTR all the way down to 0.006%.  Given these numbers, the resulting CPM then is around $0.50 (CPC*CTR*1000).  In other words, a good target performance is around $0.50 for every 1000 ad impressions, although as we’ve seen performance can be quite a bit higher, and much much lower.

Diversify, diversify, diversify: The Mobile ad network state of the world

On the desktop web, a publisher can slap in an AdSense tag and call it a day (since it typically outperforms other networks).  For mobile ad networks, that’s not the case.  In general, we have seen that publishers with 4 or 5 networks outperform those with fewer networks set up.  There are several reasons for that.

1) Mobile ad networks cannot guarantee 100% fill.  There are still more mobile impressions than ad demand so using only a single network means that you will have unfilled impressions.  Using several networks will guarantee that you can get as close to full fill as possible.

2) Costs per clicks (CPC) and click through rates vary over time.  For a single ad network, we see that the CPC rate can vary by as much as +/-20% over the course of a few days, and the CTR can vary by +/-30%.  This means that your expected revenue from a single revenue can drop by a half from the high point to the low.  By incorporating several ad networks, MoPub will monitor the performance and automatically divert traffic to the highest performing network.

3) Ad networks still don’t have a lot of variety.  If you are using one ad network, there are cases where the fill rate is high but it’s because a user is seeing the same ads many times.  Users will get desensitized to a certain ad if they see it to much.  By using several ad networks, you can insure that a variety of ads will be shown to your audience in a given time.

With these points in mind, we recommend using 4-5 ad networks at this time.  In particular, some networks that our customers prefer are AdMob, iAd, InMobi, Jumptap and Millennial.

Getting the most out of your ad networks

Once you have set up your initial ad networks, there are some things you can do to make sure you get the most out of them.  The most important thing to remember is that if you are consistently seeing a low clickthrough rate (<0.1%), the ad networks will start sending you low CPC ads.  The worse your ads perform, the worse ads your users will start seeing.  It’s therefore important to make sure that you are getting good clickthrough rates and remember that in some situations it’s better not to show any ads.  We’ll cover this in more detail in the next part of the series.

Another thing you can do is limit certain ad networks to particular geographic regions.  A good example is iAd.  iAd is one of the better performing ad networks out there, but it only serves ads in particular countries.  We recommend that you limit iAd to the US, Canada, UK, France, Italy, Germany, and Spain.

You may be approached by a particular ad network that promises high performance.  New ad networks are cropping up all the time in mobile since the ecosystem is still new.  We strongly recommend that when you set up a new ad network you set up a frequency cap on that network.  This way, you are able to monitor the performance of that network without diverting too much of your traffic to it, saving you a potential hit to revenue.  If the network performs well over a period of time, you can remove the cap and divert more of your traffic to it.

Summary

In this post, we covered some of the basic mechanics of mobile ad networks and went into details on best practices for setting up your main networks.  In summary, here are the key takeaways:

  • A good target CTR is 1% and a typical CPC is $0.05, meaning $0.50 is a good target eCPM
  • Fill rate is still a problem for ad networks
  • For an ad network, CTR can vary by +-20% and the CPC can vary by +-30%, so there is not a network that consistently outperforms all other networks
  • We recommend using 4-5 ad networks to ensure maximum performance and diversity of ads
  • Ad networks will send low-performing ads to apps that have low CTR
  • Consider geotargeting certain ad networks
  • Frequency cap new ad networks that you are testing before sending all of your traffic

Questions for next time

  • Where is the best place to put a banner ad?
  • Does putting the banner at the top or bottom of the page work best?
  • How often should I rotate the ad?
  • How do I get the most out of my video ads?
  • What rich media options work best?

Stay tuned!

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