iPhone App Banner Revenue Options

by Brook Lenox on July 2, 2009

moneyWe make iPhone apps because we love to, right? Right! But we also need to pay the bills.  Many apps are either partly or solely supported by ads.

So if your app is ad supported, what are your possibilities for generating advertising revenue?

 
Here is what I think are your options:

1) Use just one ad partner
2) Try an ad aggregator
3) Build your own ad platform

Let’s look at how each solution works, as well as the pros and cons.

Use Just One Ad Partner

oneTo add a single ad partner, you simply add their SDK to your app.  An SDK is a bit of code that calls the ad network for a banner to display to someone using your app.

Admob, Millennial Media, and Quattro all have SDKs that they would love for you to add to your app. Of course, if your app is already in the app store, you’ll need to submit an update to Apple after you’ve added ads to your app. Say that 10 times fast!

The pros to this solution are as follows:

  • Fast –  it should take a few hours/days to implement
  • Low technical – it will take technical resources, but less than other options
  • Your making money – always a good thing

The cons?

  • Single revenue source – what if their eCPMs* are really low?
  • Fill rate – what if you serve 20,000 ads in a day and they can only fill 50%. You lose revenue and your users see a blank space where the ad should be displayed
  • House ads – you typically can’t run any of your own ads

You can see by the cons, that a single ad partner, may be the way to start, but it is not a good long term solution.

*eCPM = effective cost per thousand impressions. If you have an eCPM of $1 that means you are earning $1 for every 1,000 impressions you show.

Try an Ad Aggregator

cars2If you don’t have the resources to build your own ad server, you can turn to an add aggregator. Recently, a number of companies have started offering these services.

They include: AdWhirl, Mobclix, Mojiva, Tapjoy, and others. Here are types of things you’ll want to look for.

Ability to:

  • Connect to all the ad networks you require
  • Roll over from network to network when no ad is returned
  • Set a % for each network or have them auto optimize for you
  • Run your own house ads

Other questions:

  • What is the cost: set up and ongoing?
  • How difficult are they to integrate with?
  • Do other app developers use them and like them?

Pros:

  • You don’t have to build it!
  • Better eCPMs
  • Much richer features that you can probably initially build
  • Roll over from network to network when no ad is returned

Cons:

  • Giving up a piece of your revenue. I know AdWhirl doesn’t charge at this point, but won’t they need to eventually?
  • What if any of these go away?
  • Issues with Admob (perhaps this doesn’t matter or will blow over)
  • Loss of control (perhaps building it yourself gives you an advantage)

NOTE: You could try to integrate with major web players like DoubleClick and/or Atlas, but I think it’s a big mistake. I’ve seen and heard very little to suggest it won’t be anything but a big headache.

Build It Yourself

Another option is to build your own ad server.  You put all the ad networks SDKs on your app and build a server to interact with them all.diy

This is a great option if:

  • Ad serving is somehow core to your business
  • You run the #’s and you’ll have a better ROI in the end
  • You’re leery of how new the ad aggregators are
  • You have expertise & resources that can do this
  • You have very unique banner ad needs

These are all good reasons to build your own ad server. 

Pros:

  • Some as with the agreggators, you’ll have better eCPMs
  • You won’t be giving up revenue to an aggregator
  • You can build it how you want it

Cons:

  • You will have to build it!
  • It may take a long time or take you away from building great apps
  • It could cost too much money

It feels like we are in the “early days” of app advertising revenue, but things are progressing.

Have I missed any options? If so, let me know.

 

Photo credit: rob lee, drcorneilus, doug88888, colros

{ 13 comments… read them below or add one }

MattjDrake July 13, 2009 at 8:48 am

I think that what the guys who are working on AudioBooks are doing is interesting. They are essentially selling space on their app directly to advertisers. I forget the exact cost, but it is something like $500 per month to advertise with them (a steal if you ever tried Google Adwords) and they only offer a limited number of spots.

The cons of this approach is that you need to roll your own ad network and you have to sell the ads yourself. It is very interesting though, my guess that they can support around $5,000 per month in income off of AudioBooks. They wrote a blog post about it:

The pros are that you can potentially generate much more revenue this way than use a community service like AdMob.

http://blog.crossforward.com/?p=38

Mike July 15, 2009 at 12:11 pm

Do you know of any good resources for existing solutions and/or tutorials for implementing your own mobile ad server?

Brook Lenox July 24, 2009 at 8:43 am

Mike,

Great question…I’m the marketer, not the technical guy, but if I find out anything I’ll pass it along. Sorry I couldn’t be more helpful.

Brook

Brook Lenox July 24, 2009 at 8:51 am

Matt,

Selling your own ads is a big step I think. Most small/medium developers couldn’t take that on. Wonder who is actually doing the management of the advertisers.

Matt another reader asked: “good resources for existing solutions and/or tutorials for implementing your own mobile ad server?”

Do you have an suggestions for them?

Thanks,
Brook

Jim December 31, 2009 at 9:31 pm

Check out app/ads. http://www.appads.com .

Brook Lenox January 4, 2010 at 3:13 pm

Jim…thanks for the suggestion…I will check em out.

Best,
Brook

Ryan (.app/ads) January 5, 2010 at 11:44 am

Jim – thanks for the mention.

Brook – great post! http://www.appads.com offers a great alternative to the ‘build it yourself’ approach. We provide an Open SDK so devs can pick exactly which networks they want to include in their app, and our website dashboard enables you to easily control when and how those networks run. You can also mix in house ads (including ads promoting in-app purchases or twitter/RSS feeds), or setup and run ads you’ve sold directly to advertisers on the fly without pushing an update to the app store. We also provide a lot of advanced ad targeting features like day of week/time of day/ geo-location along with frequency capping and impression limits for more control.

We don’t think devs should lock themselves into using just one ad SDK, or even one ad aggregator that doesn’t enable them to take advantage of opportunities that may present themselves in the future. .app/ads lets devs maximize revenue opportunities while retaining control over their ad space.

Brook Lenox January 6, 2010 at 3:49 pm

Ryan,

Thanks for the informercial :). Just kidding. There are so many aggregators currently in the space, what differentiates appads from others them?

Regards,
Brook

Ryan (.app/ads) January 7, 2010 at 11:05 am

Ha sorry! I actually have a few extra shamwow’s if you’re interested :) Lots of differentiators, but a few are the Open SDK for picking up the exact 3rd party SDKs you want to include, helping power in-app purchases and providing an easy way to promote the in-app purchases through your ad space, and tons of control over your ads similar to what you would find on a web ad server with frequency capping/geo-targeting, etc.

Brook Lenox January 7, 2010 at 3:57 pm

Ryan,

Thanks for the clarification….that’ll help people that are looking for solutions.

Brook

Opinion Deviche January 18, 2010 at 12:07 pm

I like this page, it is very similar to the subject i’m dealing with at my space. keep up the good job… devi,

Tom Bodet March 25, 2010 at 3:52 pm

Thanks for the post, just what I was looking for, I still dont have all the info I want, but it certainly helped to have some good information to go by.

Brook Lenox March 26, 2010 at 8:48 am

@ Tom – your welcome!

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