Monetization

Among 7 billion people on Earth, out of which more than 5 billion people own a cell phone, and an ever-growing number of these are smartphones. Over the last five years, the number of people who access the internet through their mobile phones has more than doubled, including mobile app users.

As a mobile app developer, certain aspects of the industry can be irritating. One such example is trying to appease a broad group of users. When choosing to develop an app, the quest to support multiple users and come to terms with app monetization queries can be taxing. 

This means that developers now need to come to terms with the fact that their apps are not just a platform; instead, they can be a significant source of income. That is what mobile app monetization is all about! 

What is app monetization? And why is it Important? 

App monetization or monetizing an app means making revenue from a mobile app without actually charging for it. Users generally want free apps but do not know that free apps are 98% of Google Play's revenue. 

One of the options available to monetize an app is to advertise within the app itself. 

Mobile app monetization is crucial because users would instead download a free app than a paid one. To account for this, the app business model needs to be readjusted. Developers need to shift their revenue-earning process from pre-download to post-download. This is where strategizing your mobile app monetization comes in. You need to make sure that two things happen when users download your app: 

1. Your app generates revenue. 
2. Your users and the user experience remain intact. 

Most app builders forget to look into the second aspect, where most drop-offs or app uninstallation occur. 

What are the different App Monetization strategies? 

Free and paid mobile app versions model: 

Mobile app monetization strategies include having free and paid versions of your app. With this, you can have some features in the free app that encourages the users to upgrade to the paid app, or you could monetize the free app with in-app ads. 

This strategy has two significant benefits - a) It offers users a free option to test and experience the basic functionalities of the app at zero costs b) it provides app developers with a growing user the base for potential monetization.

Free app with in-app purchase model:

In this model, the basic app features are free. But, if the user wants to advance to the next level, for example, enjoy premium features or get extra lives or weapons in a gaming app - then they need to make in-app purchases. 

Another adjustment is when the app developers make sure that only specific sections are free, and to move forward, users need to make in-app purchases. 

The Free app with Subscription plan Model: 

In this strategy, the app is free to use with limited access to the services offered. To enjoy the full benefits, you need to take a subscription plan. This model is primarily seen in service-oriented apps (for example, Headspace, Spotify) or content-centric apps like newspapers (Times of India, New York Times). 

This model helps apps become easily discoverable in the app stores under the Free section when users look for related content. It also allows developers build their initial user base that can be cultivated into paid subscribers. 

The paid app model:

In certain cases, developers make their apps completely paid. Generally, these apps have a Unique Selling Point (USP) that is hard to find anywhere else. But, you need to make sure that your apps have that unique feature(s) that is unavailable in the market; otherwise, you will not be able to build a user base to generate revenue.  

The partnership model:

If your mobile app is top-rated in your niche, companies may approach you for sponsorship opportunities to get their brand in front of your users. But, when planning the next app to build, you can consider the user base and the type of brands interested in that app. If the user base is significant, then you can monetize through brand sponsorships, acquisitions, and partnerships. 

Now that we are clear with different types of models, you need to see the best app monetization platforms to monetize your apps. 

Best platforms to monetize your apps 

When you are planning to monetize your apps, various platforms provide simple and convenient services for developers to raise revenue through high-quality ads. Our top 2 picks of the best app monetization platforms are- 

Google AdMob:

Considered to be the best mobile app network, millions of advertisers use the platform. 

How does it work? 

• Developers need to allocate the required ad space in the app 
• Advertisers then set bids for the ad slots 
• Google AdMob selects the most profitable and interesting ads for your users

Pros: 

• Complete security maintained with ad verification systems 
• Integrated with Google Analytics to track user interactions with in-app ads 
• Ability to set broadcast time and track impressions 
• Ad network mediation to work with multiple ad networks simultaneously 

Added Advantage:

Google AdMob uses the hybrid monetization model where developers can also use in-app purchases with reward ads. 

Google Ad Exchange: 

Google Ad Exchange or Google AdX is a marketplace where developers can sell and purchase ads with real-time bidding. Advertisers can run campaigns and offer publishers maximizing revenue options. 

How does it work? 

• Integrate Google AdX with Ads Manager is a prerequisite to using the platform 
• Easily manage and exhibit ads on the apps 
• Segregate between direct, programmatic, and in-house ads 
• Complete control of ads and even options to define pricing 
• It can be used to determine where the ads will be displayed 
• Monitor and track ad performance 

Pros: 

• Google AdX has a higher demand than any other platform as it unites multiple ad publishers
• You are in control with the ads displayed, who they are positioned to, and which ads are displayed on the application 
• Publishers can define the price floor for the ads to generate the highest eCPM 
• App publishers and companies of the same niche can get into direct deals that result in higher eCPMs
• Publishers can make their ad inventory branded, semi-hidden, or entirely anonymous for buyers 
• Advanced targeting options are available based on location, audience, and device

Added Advantage:

Google AdX has an innovative reporting tool that provides comprehensive reports for deeper insights and analysis of data. 

What are the Different ad types used to monetize an app? 

According to a study done by Statista, mobile ad spending is predicted to be around $280 billion in 2022. So, when planning to monetize your app, you need to understand the different ad types available to you. 

In-app ads:

In-app ads provide a dynamic and flexible user experience with options to create animations and interactive ads. These include ad types like native ads, mobile interstitial ads, ad banners, reward ads, and more. 

Pros: 

• Does not distract users 
• Highly interactive 
• Can be easily controlled and managed

Interstitial mobile ads: 

These are ads that are built between levels of the app with SDKs. These ads cannot be closed until the interval ends and guarantees the best user experience. 

Pros: 

• Ads are highly memorable 
• It leaves a lasting impression 
• Highly converting

Rewarded Video Ads:

These ads provide incentives or rewards for users who watch the ad and are primarily used in gaming apps in return for extra lives, hints, or bonuses. Users can also watch or skip the ads. 

Pros: 

• High completion rates as users want the bonuses 
• Highly interactive 
• Increased engagement with users as they can see the complete ad

Mobile Video Ads:

Mobile video ads have some of the highest engagement rates out of all the options. There are three places where these ads play - pre-roll (before the video plays), mid-roll (middle of the video), and post-roll (after the video). 

Pros: 

• Highest engagement rate 
• High levels of interaction by users 
• High conversion rates 

Mobile Native Ads:

These ads include video or textual ads that imitate the app's editorial content. And are not viewed as direct ads, which increases the users' loyalty. 

Pros: 

• Cost-effective option 
• Non-intrusive for users 
• Aligns directly with the design 

Mobile Banner Ads:

These static ad units are displayed as standard banners (top or bottom of the screen) and include full-screen banners that take the whole mobile device screen. 

Pros: 

• Easy to launch and affordable 
• Universally supported 
• Cost-effective option 

Playable Ads:

These interactive ads are mostly gaming apps that offer test versions as ad units. Typically they last from 15 seconds to 1 minute and are a great option to promote gaming apps. 

Pros: 

• Highly interactive 
• High engagement rates as users can interact with the game before download 
• High conversion rates 

Mobile Game Ads:

Mobile game ads are highly interactive and memorable user experiences, including reward videos and interstitial ads. These can be static or dynamic based on what ad publishers create. 

Pros: 

• Cost-effective option 
• Highly interactive 
• Universally supported 

Mobile rich ads:

These ads are considered one of the best as they are not banner specific and can include all elements such as audio, video, and highly engaging animations. Mobile rich ad formats can also include HTML, JS, CSS, and image files. It lets advertisers get creative and offer build ads that are entirely unseen in the market. 

Pros: 

• Highly engaging ads 
• Because the ads are different, users interact with them more 
• High converting ads 

Evolution of App monetization - trends to watch out for: 

The mobile app market will be around $407 billion by 2026. It is essential to look ahead to the upcoming trends that will affect the market. Here are some app trends and monetization methods to watch for: 

Multiple revenue sources - 

App developers need to start looking into multiple options for app monetization. This act like a safety net and lets user preference dictates how the app is shown. In 2017 a report by app testing firm Swrve highlighted that 2.2% of gamers spent in-app money, while 46% of revenue came from the highest-spending 10% in that group. So, diversifying your revenue sources means you are less reliant on a small user group and have an overall comprehensive mobile app monetization strategy. 

In-app bidding to become more competitive -

In-app bidding is a one-way ad generator auctioning a publisher's inventory. It means ad publishers bid against each other to get that app space. According to a study by DigiDay, in-app bidding results in a 13-27% increase in Average Revenue per Daily Active User (ARPDAU). This will push app builders to auction more of their inventory via in-app bidding. 

Rise of AR -

As Augmented Reality or AR becomes more commonplace in the mobile app sector, marketers are looking for avenues to monetize mobile apps using AR. One of the best examples is IKEA's AR app. This app allows users to impose IKEA products in their household to see how each item looks before purchase. 

Final Thoughts

As an app publisher, understanding the nitty-gritty that goes into your app's monetisation can be difficult and time-consuming. With the negativity surrounding app developers selling their user's data to third-party platforms, and the number of fake sellers/publishers for apps online, it is no wonder that most developers lose interest in mobile app monetization. So, why not trust the experts at KalaGato? 

Firstly, you get a response from the experts within 72 hours of inquiry >> Secondly, you receive an offer in 2 week >> Finally, your app is sold within 30 days!

KalaGato offers a Free evaluation of your app as well. So, if you fulfil their criteria of: 

1. 100k Monthly Active Users, 
2. 1500 or more organic downloads, and 
3. Day 1 retention benchmarks as high as 45%.

So, talk to the KalaGato experts to sell your app online! 

As an app developer, your ultimate goal in creating an app is to make money. You can easily monetize your app through subscriptions, lead generation, and affiliate marketing online, but mobile app monetization platforms are the easiest way to make your app profitable. Joining mobile ad networks can help app publishers by selling ad space to advertisers as passive options for monetizing their apps. The buying occurs manually or through real-time bidding options. Most mobile ad networks focus on a broad spectrum of ad formats such as banners, native ads and video ads to connect with the audience easier.

But, if you do not have a proper strategy in place, your ads may not work. Based on your target audience, the type of app you are selling, and the utility of your app, you need to plan which strategy would work better to increase app installations.

It could be: 
A Subscription-based strategy 
A Premium plan 
A Download Fee Strategy

According to statistics, the global app install ad spend is projected to grow to more than $118 billion in 2022. So, who wouldn't want a piece of the cake? If you create an app, monetization is crucial; otherwise, your app's usability and functionality remain unseen by people who could benefit from it.

Below are the top 6 android app monetization platforms to help app publishers grow their apps.

Google AdMob:

Google AdMob is one of the largest global mobile ad networks and helps monetize your app with actionable insights and in-app ads. It is considered to be the best app monetization platform; the platform supports multiple currencies so that you can earn money globally. Some reasons to use Google AdMob are: 
Over 81% of Android apps top 1000 use AdMob 
97% of AdAge 100 world’s largest advertisers buy ads on AdMob 
1 million + apps use AdMob 
1 million + Google advertisers are on AdMob

Features of Google AdMob include: 
Smarter technology, more revenue - AdMob is one of the largest global ad networks that can help maximize the value of each impression across multiple networks with their advanced monetization technology. 
High-performing ad formats - Engage with users using AdMobs innovative ad formats. You can customize your user experience and earn more revenue by seamlessly integrating rewards, banners, videos, and interstitial ads into your app. 
Automated tools - Streamline your entire ad process with the easy-to-set-up and integrate automated tools. AdMob offers everything from brand safety controls to advanced monetization technology with bidding and mediation. 
Advanced analytics - Make smarter decisions and improve customer experience with robust reporting and measuring features that deliver deeper insights into how your users interact. Get richer insights with direct integration into Google Analytics.

The hybrid monetization model is available on AdMob too. For example, you can use in-app purchases but also reward ads.

Facebook Ad Network:

One of the best app monetization platforms for Android users is Facebook Ad Network. You can now publish ads for people who use their mobile apps outside the realm of Facebook and Instagram. Facebook Ad Network is perfect for Android app monetization as it shows detailed information about users and can provide accurate ad targeting options.

Features of Facebook Ad Network include: 
Increased efficiency - Monetize your ad and remove the burden of waterfalls, increase operational efficiency, and access more target audiences with ease 
Engage with users - This app helps provide quality ads to targeted users that fit your app’s audience. 
Earn more revenue - Get access to multi-vertical demands from millions of Facebook advertisers. 
Flexible ad formats - Facebook Ad Network uses multiple flexible ad formats to engage with users, such as Native ads, Interstitial ads, Banner ads, reward videos, and playable ads. 
Valuable insights - Stay in the loop with the latest updates, optimization tips, fresh insights, and success stories directly from Facebook.

Unity Ads: 

Unity is one of the largest mobile app ad networks and the best android app monetization platform in the market. App publishers can buy interesting ads like playable creatives for the apps. Playable ads are interactive and have snippets of their gaming apps on the ad to allow users to interact with them. In the feed, users see a mini-section of the game with a CTA (Call To Action) that encourages them to download the app.

Features of the Unity Ads App include: 
Easy to set up and use - Integrate ads directly into any game with SDK design. 
Diverse ad formats - Easy integration of various ad formats from rewards to interstitials to help boost CPM or Cost-Per-Thousand results. 
Trust and Safety - The Unity app provides users with resources, tools, and insights to help control ads in your apps, stay compliant with rules and regulations and make informed monetization decisions. 
Easy Campaign management - Set up, monitor, and optimize your campaigns within the self-serving dashboard. 
Powerful analytics - Access powerful analytics and build customized reports with an easy drag-and-drop interface to get better project insights.
Expert support - Discover how to optimize your ad campaigns with expert support from industry veterans.

InMobi: 

This global app monetization platform specializes in providing the best ROI for mobile marketing and advertising. It helps brands, application owners, and marketers connect with their users at different stages of interaction with the program.

According to InMobi, the average user connects with them at least 6 times a day, and over 6 billion ad impressions are served daily. These are primarily in apps from categories such as Lifestyle, Entertainment, and Gaming.

Features of InMobi include: 
Unified auction - Maximize your ad revenue with a unified ad auction that brings the best of header bidding for mobile apps. You can now be in complete control with deep reports into the behind-the-scenes auction mechanics. 
Easy app monetization - You can tap into the premium and diverse ad campaigns and connect with the largest brand advertisers worldwide with direct and programmatic channels. 
Boost ad revenue in the global market - With the InMobi exchange, you now have exclusive access to over 200+ DSPs with over 5000 programmatic buyers who represent the top brands from the globe. 
Give your users what they want - You can choose from a comprehensive list of ad formats that include videos, rich media, and customizable native ads to create in-app monetization opportunities to strike the perfect balance between revenue and user experience.

Google Ad Exchange: 

Google Ad Exchange or AdX is an ad exchange network contributing to more than 50% of the total programmatic revenue. It ranks as the top app monetization platform among media buyers and app publishers. The platform offers a large number of advertisers the option to run massive campaigns and offers publishers maximum revenue contributions.

Features of Google Ad Exchange include: 
Higher demand means higher revenue - Google AdX has a much higher demand than any other platform as it unified multiple DSPs. Due to the high demand, there is also more competition, which results in higher revenues for app publishers. 
Complete Ad control - App publishers have complete control of the timings to display ads, where to position the ads, and which ads to display on which application. 
Defined pricing - App publishers control the price floors for their ad inventory. Each ad space can have a different price level, which in turn helps generate the highest eCPM. 
Maintain anonymity - App publishers have the option to keep their ad inventory branded, transparent, and even semi-transparent to their buyers. 
Advanced Targeting - Google Ad Exchange provides advanced targeting options through which publishers can target their audience based on location, device, and age, which results in higher yields and eCPM. 
Reporting Tools - You can create comprehensive reports with segregations showing advertisers, devices, and buyer networks. This helps app publishers gain deeper insights into their audience and optimize their inventory accordingly.

Iron Source: 

If you are looking to supercharge your revenue with the best technology to maximize your earnings and empower your app, then Iron Source is for you. The platform helps monetize apps for a wide range of mobile platforms, such as Android, iOS, Adobe, Unity, and others. They offer 4 main ad formats - reward videos, Banners, interstitials, and offer wall.

Features of Iron Source include: 
Single access point for global bidders - You can get the highest price for each impression with an in-app bidding engine that directly connects you to the leading bidding networks in the industry. 
More than mediation - Gain access to a complete set of optimization tools with the most comprehensive reporting options to boost your app monetization process. 
Entire growth cycle in 1 platform - Iron Source connects your user acquisition with monetization to help your app achieve complete growth. 
Trustworthy technology - The platform provides stability without compromising app performance and ensures reliable SDK deliverables while keeping the user experience intact. 
A/B Testing - Optimize your monetization strategies with a powerful A/B testing tool that makes testing everything from ad units to user segments easier. 
Customizable user segments - Create a better user experience and help increase revenue with the segmentation tool to allow for custom ad flowers in different player segments. 
Expert insights - Let the experts help you supercharge your ad monetization strategy to help increase users.

Final Thoughts!

As an app publisher, understanding the metrics involved with user engagement, revenue generation, connecting the different monetization models to your apps and finding the best mobile app monetization platforms can be difficult. It gets even tougher if you have more than one app in your portfolio. So, instead of trying to strike a balance between monetizing your app and keeping user engagement higher, why not sell it on KalaGato?

If you do not want to waste months on closing a deal or want to connect directly to the stakeholders without the hassle of bidding, or want to know the correct valuation of your app, then KalaGato is for you!
 

App publishers dream of having efficient ad ecosystems, where ad spaces on their websites/apps generate maximum ad revenue. But achieving that dream means having a programmatic waterfall process or header bidding in place.

The programmatic waterfall concept is now going out of practice, as this allows publishers to highlight their ad inventory to multiple partners, without a reduction in ad costs. But, what are these? And why is the tech world buzzing with programmatic waterfall vs header bidding?

Let’s jump in!    

What is a Programmatic Waterfall?

Programmatic waterfall or daisy chaining is a technique publishers use to sell any remaining ad inventory.

In the early days, publishers tried to sell their premium ad inventory using direct deals. This would often help generate more revenue. But, in most cases, it left publishers with an ad inventory that was not attractive to direct buyers. This is why the programmatic ad waterfall concept was designed. This model of app monetization delivers ads from networks based on historical eCPM or Effective Cost Per Mille, which allows publishers to identify whether an ad served in their app is effective enough to generate installs.

In this case, ad impressions waterfall from one ad network to another from highest CPM to lowest based on ad request.

Essentially, app publishers will try to sell the inventory directly at first, but if that does not work, it will pass the impressions to premium ad networks.  

How does Programmatic Waterfall work?

Programmatic waterfalls are when SSPs or ad networks are ranked based on the average historic performance they have previously produced for publishers. So, this means that any SSPs or ad networks that have the highest: 
eCPM or Effective Cost-Per Thousand Impressions - is calculated to demonstrate the ad revenue generated from 1000 impressions. 
              eCPM = Total Revenue 
 ________________ X 1000
Total Ad Impressions

Fill rates - the percentage of ad impressions your ad received divided by the total number of ad requests and multiplied by 100%. 
              Fill Rate = Total ad impressions 
 _________________ X 100% 
 Total Ad Requests    

Latency

The impressions calculated are then moved from one SSP/ad network to another in a specific sequence until they are sold.

Programmatic waterfall - Pros & Cons

There are multiple pros and cons when considering advanced auction solutions like programmatic waterfalls.

Pros: 

Allows publishers to sell their remnant ad inventory 
An easy setup process that only requires pasting passback tags from 1 SSP/ad network to another 
Publishers can do manual ranking based on their order of preference and highest eCPM 
Publishers can sell their inventory to a competing pool of direct buyers

Cons: 

Publishers get low deals as the SSP/ad networks receive bids on impressions in a sequence instead of the real-time bidding option 
Once impressions are passed onto the next step (SSP/ad network) the CPM price floor decreases. This prevents high-paying advertisers from bidding more and in turn decreases publishers' revenues 
The process is long and has high page latency 
The sequential selling process results in high impression discrepancy as opposed to where there is a single auction

What is Header Bidding?

Header bidding, or pre-bidding, is a programmatic technology where bid requests are sent to multiple demanding buyers (eg - Criteo, Google AdX, Xandr) for real-time bidding. Also known as advanced bidding, more than 84% of the USA’s top 100,000 websites implement header bidding, while more than half of US-based publishers agree that they received higher CPMs thanks to this.

This process helps publishers maximize yields for their ad inventory and sell their Ad slot or Ad inventory at the highest rates. Essentially, it is a type of programmatic auction where bid requests are sent out to multiple demand partners at the same time. This helps maximize the value of  the ad inventory.

Once multiple buyers enter the competition, it pushes the demand partners to pay for more with the same ad impressions. Header bidding helps publishers by offering their premium ad inventory without the added risk of underselling it.    

The entire process takes only a fraction of a second, and publishers need to look at implementing header bidding to maximize ad revenues for web pages.

How does Header Bidding work?

The header bidding technology sits right at the top of its  wrapper, a JavaScript tag that is responsible for: 
Making advanced auction solutions to demand partners 
Evaluating bids 
Communicating with the ad server

Wrappers help implement technology and manage demanding partners with ease. So, how does the header bidding wrapper work?

Step 1: Publishers need to paste the header bidding code into the header of the webpage 
Step 2: As soon as the user visits the website, the wrapper makes an ad call to demand partners 
Step 3: Demand partners submit their bids within a time frame or timeout in which bidders need to respond to prevent page latency 
Step 4: Wrappers send the bid to the publisher’s ad server 
Step 5: The highest bidder wins the real-time auction, and his ad gets displayed on the publisher’s page

Header bidding means that all demand sources participate simultaneously in the auction, and all app publishers can control which sources participate in the process. Also, publishers can increase their prices as they charge for premium inventory. With a reduction in the reliance on single supply-side platforms (SSPs), the overall yield increases, and as a result, there is an increase in the ad fill rate and a smart allocation of impressions that are sold to the highest bidder. Do you know that the Header Bidding model has reported reduced discrepancies as there is a single auction happening without any sequential chaining.

Header Bidding - Pros & Cons

Using Header Bidding solutions does have its pros and cons. 

Pros: 

Disintermediation: All advertisers have equal access to the inventory regardless of what header bidding software or tool they use 
Transparency: With the right header bidding solution, programmatic ad buyers can now get a real-time look at all app publisher impressions, not just those that were not sold in the setup. Advertisers can also get publisher data directly from the source to make more informed decisions about their ad strategy 
Better inventory: By using the header bidding technology, advertisers can access all publisher inventory which includes premium inventory that was previously available through the waterfall program

Cons:

Latency:  Header biddings are known to reduce to number of passbacks that are common in waterfall auctions, and improves page loading time. But it does have latency issues of its own. Adding more scripts to a page slows down the page loading time, which in turn has a negative effect on user experience and results in the likelihood of lower ad views. Also, client-side header bidding needs multiple connections to be made, which can cause additional problems on mobile devices or where internet connections are slower. 
Technical Overhead: Setting up the Header Bidding is not simple. There is a lot of learning and things can go wrong. So, header bidding calls on new skill sets that the largest publishers tend to have in-house
Management overhead: Once things are up and running, the Header bidding can be closely managed to ensure that it is performing well. Adjusting bids can take discrepancies into account, adjust timeout and chase down errors

Comparing Header Bidding vs Waterfall

So, which is better?

The programmatic waterfall model is not the most viable situation for ad monetization but publishers still use it to organize the ad inventory or run A/B testing before running an open auction. On the other hand, despite its popularity, the biggest challenge header bidding faces is the imperfections of the two types - server side vs client side. The server-side bidding auction lacks cookie matching options required for targeting. This leaves publishers with fewer impressions. Client-side header bidding runs on the user’s browser and harms loading speed.

We at KalaGato offer app publishers a way out. In one swift motion, you can sell your app to the highest bidder without the added stress of wondering which model Waterfall vs Header bidding works for you.

With KalaGato you can now sell your app within 30 days. You can directly communicate with decision-makers to sell your app. Get your app evaluated by experts and receive an offer within 2 weeks with KalaGato.

As an app seller, are you interested in online advertising? Then you must have heard about programmatic ads, and how they are taking the digital world by storm.

But why are publishers running to create programmatic ads? Because it helps make the programmatic buying and selling process faster, smoother, and easier.

As an app publisher, you could be creating the best app, but if your app is not targeted to the right people, at the right time, in the right places, then your app is not reaching its real potential. If you politely nod with others when they say that programmatic marketing is game-changers, but don’t know why. Fortunately for you, we provide you with all the information you need about programmatic ads in our article.    

1) What is Programmatic Advertising? 

Programmatic advertising is the process of buying and selling digital ad space. Before this process was devised, the ordering, set up, and reporting of ads had to be done manually. With programmatic advertising, the process is now more streamlined which makes it more efficient. All channels and formats can be easily accessed thanks to these platforms that have in-built ad inventory and databases that offer insights to serve ads to the right users at the right price, at the right time.

The programmatic ads ecosystem has three main components: 

Sell-Side Platforms (SSPs) -

This software allows publishers to sell their mobile, video, and display ad impressions to potential buyers in real-time. It includes networks, ad exchanges, and DSPs. 

Demand-Side Platform (DSP) - 

Software that allows agencies and advertisers to buy ads across multiple platforms. 

Ad Exchanger - 

When the supply-side directly feeds inventory into an ad exchange. The DSP connects to ad exchange and enables advertisers, networks, agencies, and publishers to sell/buy ad space.  

Programmatic ads can be classified into three types: 
Real-Time Bidding (RTB) - Also known as an open auction, RTB occurs when the inventory prices are decided through real-time auctions. These are open to all publishers and advertisers and are the most cost-effective way to purchase programmatic media buying with a larger audience. 
Private Marketplaces (PMP) - Similar to open auctions, PMPs are restricted to only those who can participate. Only selected advertisers have access via invitation-only. But in some situations, publishers may have sections where advertisers can apply to get an invite. 
Programmatic Direct - When a publisher bypasses all auctions and directly sells their media inventory at a fixed CPM or Cost Per Mille to advertisers.

2) How do Programmatic Ads work?

Programmatic ads help connect app publishers (who have apps with ad space) to sell with advertisers, who want to use that ad space to promote their products or services.

When advertisers launch digital campaigns, they connect with a programmatic ad agency. Who in turn use a DSP or Deman-Side Platform to completely automate the process of programmatic buying ad impressions to meet campaign goals.

DSPs allow advertisers to purchase ads from multiple app publishers. These ensure that the ads are aimed at the correct audience via a Data Management Platform. The data helps target the right audience by taking into consideration multiple factors such as: 
 

• Location
• User behavior 
• Demographics 
• Online Activities

When people who fall into their assigned category of the advertiser install the app, then it will send an ad request to the Supply-Side Platform. SSPs are used by publishers to sell their ads to maximize the value received from an impression. After this, they run auctions among buyers and the DSP is connected.

These DSPs use the data retrieved to evaluate the ad and match it with the right targeted parameters. The data procured is then used to decide bidding prices for the first impressions. This process is referred to as real-time bidding, and the SSP occurs in real-time.

Though this sounds like a long drawn process, it takes only 100 milliseconds to complete. Once the impression is sold, it is sent to the publisher’s website for display and the process gets repeated.

3) Different Types of Programmatic Ad Platforms

We know that programmatic advertising relies on four categories - DSPs, SSPs, Ad Exchanger, and DMPs. So, let’s explore some of the best programmatic platforms in each category.

Demand-Side Platforms (DSPs) 

Adobe Advertising Cloud DSP: 

This platform has been given the title of Leader by the Gartner Magic Quadrant for Ad Tech. Adobe provides features that help advertisers start, manage and optimize their ad campaigns.

Price: Customized prices based on company 
Support Ads: Display, audio, video, mobile apps 
Audience Targeting: Device type, audience segment, browser, location

MediaMath: 

Launched in 2007, it is recognized as one of the earliest DSPs in the tech world. Partnering with over 3500 advertisers it runs omnichannel campaigns over multiple displays, OTT, mobile, audio, video, native, and more.

Price: Customized 
Support Ads: Display, mobile, Connected TV, audio, video, native 
Audience Targeting: First-party data, audience segmentation, site list, location, technology, audio, video, contextual, daypart

AdRoll: 

Loved by users due to its simplicity and quality, the platform focuses on supporting brands to expand their reach through social ads, videos, email, native ads, and more.

Price: Customized 
Support Ads: Social ads, video, native, display, and email 
Audience Targeting: Lookalike, Interest, contextual, CRM targeting

b) Supply Side Platforms (SSPs) 

PubMatic: 

The platform has services for both buyers and publishers. As SSPs, it offers an impressive collection of tools to help publishers optimize their monetization potential of digital assets. These include tools for RTB ads, header bidding, and Private Marketplaces (PMP).

Support Ads: OTT, CTV, video, display, mobile, native, addressable, and more 
Anti-fraud measures: Uses real-time scanning options to safeguard publisher audiences across multiple ad channels

Google Ad Manager: 

Google remains one of the most popular SSPs among publishers, with a 51% market share. The platform was launched for larger publishers that have significantly higher direct sales. Some features that it offers are server-side header bidding, an advanced dashboard, managed PMPs, reporting systems, and more.

Support Ads: Mobile, video, native, display, web. 
Anti-fraud measures: Google has the latest safety protocols and standards such as SafeFrame, and HTTPS

Criteo: 

This platform offers retail media services to help publishers monetize their apps by leveraging first-party data and audiences. It is also available to publishers with lower traffic and focuses more on retargeting.

Support Ads: Video, social media, web, mobile, display 
Anti-fraud measures: Advanced image recognition technology to filter content from publishers' digital property

c) Ad Exchanges

Xendr: 

Previously called AppNexus, Xender offers full-stack programmatic advertising services (DSP, SSP, and Ad Exchange). Because of this, the platform has 11.4 billion ad impressions daily. One of the most notable features of this platform is its header bidding wrapper, which makes it more convenient for publishers.

Support Ads: Video, audio, banner, native and more 
Anti-fraud measures: Partnered with White Ops to ensure safety

SmartyAds: 

This white-label ad exchange platform has over 25000 publishers and 2 billion impressions daily. Serving full-stack programmatic ad platforms, it offers services to both advertisers and publishers.

Support Ads: Video, audio, banner, push, native, pop 
Anti-fraud measures: More comprehensive partnerships to make the marketplace safer for advertisers and publishers

PubMatic: 

This full-stack ad tech platform is one of the bigger players with over 171 billion ad impressions in a day. Publishers can benefit from its easy-to-use DMP integrations that have open-source header bidding options.

Support Ads: CTV, online video, mobile app, web, and more
Anti-fraud measures: Multiple integrations with security tools to prevent fraudulent practices

d) Data Management Platforms (DMPs) 

Audience Studio: 

Formerly known as Salesforce DMP, this platform allows advertisers to capture data from multiple sources and segment it using machine learning algorithms. Also, it provides a native consent management framework that helps advertisers maintain trust and transparency with their customers.

Lotame: 

This industry leader offers a wide range of services like identity resolution, audience management, and data marketplace. The platform allows users to access first-party data from multiple sources like CRMs, social media platforms, email, apps, and more. It provides users with the opportunity to expand their data through its marketplace.

The TradeDesk: 

The platform offers DSP and DMP to help publishers and advertisers collect, manage and activate their data all in one place. One of its most popular features is the lookalike option which allows you to discover new audiences based on data from your existing ones. Publishers also get access to a data marketplace where they can access high-quality audiences.

4) Importance of Programmatic Ads for Advertisers 

Before programmatic advertising, it was difficult for advertisers to get access to ad inventory. This means that 60% of published ad space was left unsold. Process automation has made it easier to solve the issue of buying and selling ad inventory.

Programmatic advertising is important to advertisers because: 
Scalability Options: Allows advertisers to reach large audiences by buying ad space from any ad inventory available
Real-time Flexible Options: Advertisers have the option to make real-time adjustments based on impressions and take advantage of a wide range of targeting criteria
Detailed Targeting: Advertisers can spend more efficiently with targeting options 
Efficient: The entire process is more streamlined as relevant ads are served through targeting options

5) Importance of Programmatic Ads for Publishers

In 2020, US marketers spend around $61 billion on programmatic ads. The figure is projected to rise to $133 billion in 2023, which is 91% of total digital ad spend.

So, programmatic ads help publishers host ads that are relevant to their audiences. It can access deals that bring in higher revenues and maximize returns through different bidding types. For publishers, programmatic ads benefits include:

Simple: Programmatic ads make it simple to sell ad spaces. Publishers can optimize their ad sales with automated tools that reduce the investment time needed to find advertisers. 
Communication: Publishers communicate and collaborate with advertisers to ensure that both publishers and advertisers can get the right benefits. 
Relevant: When people come to a publisher’s app or site, they are shown ads that are relevant to them because they are part of the target audience of the advertiser. Programmatic ads help advertisers access a wide range of publishers, which removes the back-and-forth negotiations. 
Efficient: Allows raised margins and lower costs for publishers to help earn more on available ad spaces.

6) Programmatic Advertising Trends

Just like other digital spaces, programmatic ads are also evolving. Different trends are emerging that are definitely worth paying attention to.

Artificial Intelligence: 

AI and machine learning are used to find patterns and predict results in real-time. As AI develops, it is combining mapping of ad viewing metrics with user data so the ads can be placed more accurately.

Improved personalization: 

Programmatic ad technology can now be used to optimize and measure ads in real-time. Combined with AI, it provides all the necessary data to deliver precise messaging to users, Dynamic Creative Optimization (DCO) makes it possible for advertisers to offer highly relevant and personalized ads to target groups. DCO can understand who the viewers are, and choose the best combination of creatives to deliver the best message.

Prevent Fraud: 

In 2019, advertisers lost more than $23 billion globally to digital fraud and it is predicted that the industry will lose $32 billion by 2022. But to counter this, several solutions are being used such as blockchain and ads.txt. Publishers can also use ad ops extensions like AdWizard to manage ads that appear on their sites.

7) Understanding Programmatic Ads Is Tough! 

The process of understanding and implementing programmatic marketing can be quite challenging. While there are multiple platforms available, it is time-consuming to find the right one that connects with your app and provides you with the best ad sellers. So, rather than looking into programmatic buying and selling, why not sell your app completely on KalaGato?

With our easy and simple selling process, you can evaluate, negotiate, and sell your app within 30 days! Send us a query and get a response within 72 hours. Evaluate your app and receive an offer within 2 weeks. In addition, get expert support to negotiate your deals and get a deal closure in 30 days. For all your app selling needs, choose KalaGato today! 
 

As an app publisher, if you plan to sell your app, you need to care about eCPM and how it can affect your ad revenue. Publishers can sell their impressions directly or programmatically. Advertisers can pre-negotiate and sell their CPM/CPC/CPA when direct deals occur.

When programmatic deals are made, publishers make their impressions available to multiple partners with the help of Ad Exchanges or SSPs. But, whatever the method of selling ad space, publishers need to look into eCPM and learn to increase their ad revenue.

Before we jump into 'how to increase eCPM' here are some basics to get started:

1) What is eCPM?

eCPM or effective Cost Per Mille is the ad revenue generated per 1000 impressions. The term 'Mille' is a Latin word meaning one thousand, while the 'effective' word indicates the actual value rather than the projected one. You can easily calculate the ad value generated by specific ad units with the help of eCPM calculators.

The higher the eCPM, the more profit an app publisher makes.

App publishers can use the following formula when wondering how to calculate eCPM:

eCPM = (Total earnings/Total impressions) X 1000

You can also use this formula:

eCPM = (click through rate X conversion rate X revenue per conversion) X 1000

Based on this formula, you can optimize the following values: 
Click-through rate: The most straight forward metric to optimize as you can control sections like ad placement, ad timing, and ad formats. 
Conversion rates: Applicable to those publishers who opt for CPI (Cost Per Install) or CPA (Cost Per Action). 
Revenue Per Conversion: Your revenue will increase when you increase the amount for paid-per-click or conversions.  

2) What is a good eCPM?

eCPM rates depend on multiple factors, such as the location of ads, traffic geography, site speed, seasonality, and others. Generally, eCPM rates average between $1.5-$10. So, if your eCPM crosses $6, it can be considered a good eCPM. 

3) Why is eCPM important for app publishers?

Calculating eCPM is essential for app publishers because it depicts the actual revenue generated based on the ads running on your app. It also helps you make educated decisions on the ad units you want to run/create in the future.

Let's understand this with a simple example:

If an Ad Exchanger pays you $10 for 1000 impressions for a 300X250 ad unit and $4 for 1000 impressions for a 250X250 ad unit, then you cannot compare them directly. But if you calculate the eCPM for both, you find that the former will earn you $10 while the second option will make you only $4.25. You can create ad units based on this. 

4) 5 Proven ways to maximize your app's eCPM:

If you are looking at 'how to increase eCPM and increase your profits, here are some proven ways:

Experimenting with Ad Networks: 

Ad networks are aggregators of demand and supply. It helps ensure that your relevant ads are shown to the right users.

How can this be done?

Partnering with the right ad networks can help. Various ad network options in the market have unique capabilities and can offer you multiple solutions. For example, vertical ad networks will help you with a niche website. At the same time, inventory-specific ad networks provide unique solutions for specific ad inventory. So, it would help if you choose the right ad network wisely based on your requirements.

Partnering with Ad Mediation Agencies/SSPs: 

Ad networks generally unite publishers and advertisers while allocating the ads based on their capabilities. But, SSPs can help you overcome the limitations of ad networking. How can it be so?

An SSP brand connects publishers with various Ad Exchanges and Ad Networks. SSPs work with multiple demand sources (Ad Networks, Ad Exchanges, DSPs, etc.). But this opens inventories to more bidders and increases eCPM.

Other than this, SSPs can help optimize your ad stacks, improve demands, and deliver better user experiences. Partnering with the right SSPs will help influence your revenue directly.

Trying multiple Ad formats:  

As an app publisher, you must find the best way to get your ads out to your target audience. Trying multiple ad formats can help increase your eCPM. Some ad format options are: 
Banners - Rectangular or square-shaped ads that appear on websites. So, choose one with the highest fill rate and lowest chances of getting affected by fraud. 
Interstitial - These ad formats have some of the best eCPM rates. Also called 'full page ads,' occupy a user's complete device screen. But remember to follow your ad-tech partners' guidelines and keep your users' experience in mind. 
Videos - These are both intended and compulsory ads considered the best options these days.

Generating Search Engine Traffic: 

When you have many visitors, you have a better opportunity to showcase your ads to them. This means that you get more ad impressions, more CTRs, and a higher profit.

But not all traffic sources increase your eCPM. It is mostly Search Engine Traffic that helps increase eCPMs. Why?

Because SEO drives traffic organically, users have searched for your app (or keywords related to your app) and have clicked on it themselves. There was no push involved from your side. In this case, users will stay on your app for a longer time and are more likely to interact with the ads.

On the other hand, using social media can help make your content go viral. This offers thousands of unique visitors to your website in a short time frame that increases your eCPM. Therefore, if you create valuable content, you can leverage it on these social media platforms to drive traffic organically to your app.

Keeping up with Industry standards:

We know that when the demand for a specific format increases, then there is a change in the users' behavior. To keep yourself relevant, you need to start tracking industry average eCPM for different formats.

One of the best examples of this is video ads. You can see how video ads have increased in just the last few years. So, if it has been in your ad list, you know that video ads work best for your users and try to bag higher eCPMs.

5) eCPM - Hit or Miss? 

As app publishers, getting the perfect eCPM rate is impossible as soon as you start your ads. You need to test several aspects - ad networks, placement, formats, and try various traffic-driving techniques to see which brings you the best rate.

But, this is time-consuming and might make you lose sleep. Rather than spending time to figure all these out while planning your next big app, why not sell your apps on KalaGato?

We provide quick and easy app selling within just 30 days. When you send a query, our experts will connect with you within 72 hours and help you understand the entire process involved. App evaluations are done, and within 2 weeks, you will get an offer. It will only take you around 30 days to complete the entire process. So, trust the experts, trust KalaGato! 
 

If you have gone through your Play Store application, you will see that you can download some apps for free. But, the question that may pop into your mind is - how do these free apps make money?

According to a study by Statista, in 2022, 97% of Android apps on the Google Store are free, compared to paid ones. This data shows that most apps available on the Play Store or the App Store are free. Rather people are more interested in downloading free apps rather than paid ones. But then, how do app publishers earn money? Let’s examine how app monetization helps free apps make money.

Why should app developers monetize their free apps?

The concept behind free apps is that users download the app for free and benefit from its multiple features. But, to make money, app publishers need to monetize your app by introducing extra in-app paid features. You can also run in-app advertisements or have a subscription-based app monetization plan.

In some cases, you will notice a few benefits and downsides. Let’s consider both to understand why it is important to develop a free app and pick the right app monetization strategy:

The user base is larger: 

When a user sees that an app has a free download, the chances of it being downloaded increase. This is an effective solution to increase app installs because the user thinks that everything in that app will be free.

Users download more: 

Users are willing to download a free app more than a paid one. When you have an app that is free, people will be more willing to try it out, rather than pay for one and then not like it. It is this initial hesitation that free apps remove. In the case of a paid app, until a person knows what the app does, and is completely certain about its utility, they will not download it. But for free apps, they will download it readily and then check the utility of the app.

Understand target audience and market: 

Higher downloads are not guaranteed to increase your revenue, as you need to understand your target audience and market clearly. For example, audiobook apps have different users as compared to mobile games. So, the user’s solvency differs, and your business to monetize your app should be different.

But, keep in mind, when developing an app, your goal should not be to have higher download rates but also that your app should be profitable. If there are no proper users, then monetizing your app is questionable. So, to make money with your free app, developers need to create user-based strategies based on their app categories.

5 Most Popular App Monetization Strategies for Free Apps  

Let’s look at some free app monetization strategies:

Advertising:

Ads are probably some of the most common and easiest options to implement regarding mobile monetization for free apps. According to a study by Statista, mobile ad spending in 2022 is $336 billion, whereas in 2024 is expected to be $412 billion.  

When it comes to monetizing a mobile app, how do you do it?

The first thought in monetizing your app and making money is that there should be no guilt involved. As app owners, you need to display commercials on their mobile or opt for affiliate marketing to get paid from top mobile ad networks. Additionally, ads are also considered to be the best way to earn money from apps.

As app owners, you need to showcase your ads within the mobile application so that third-party networks can pay you. They are mostly paid when a user clicks on the ad or installs the application from an ad.

App Subscriptions: 

The app subscription strategy is one of the most useful app monetization strategies you can use. App publishers can keep some of its content or features in their free plan for a limited period and then charge users a subscription fee to gain complete access without any limitations.

The most popular method of app subscription is using a free trial period option and then charging a subscription fee to those who want to continue viewing or using your app. This strategy works for online news services, cloud services, audio and video streaming, bookstores, etc.

In-App Purchases: 

Another great app monetization strategy for free apps to make money by using in-app purchases. In fact, according to Forbes, apps that have in-app purchases generate the highest revenue for publishers. These apps that have in-app are made directly within the free mobile app; the process is relatively simple—adding features like power-ups, special content, restricted levels or any additional features. These in-app purchases are then distributed to allow users more advanced interactions.

In simple terms, the in-app purchase model allows selling multiple virtual items directly on the app. Do you know that the app monetization strategy expects domination in years to come? Generally, game publishers use this model to derive digital currency. In addition, these in-app purchases also play a major role in app downloading.

Referral Marketing:

Referral marketing is involved in promoting third-party products or services by way of optimizing revenue options. App publishers can use referral marketing app monetization strategies to promote or sell affiliate products based on installs or the number of clicks. Moreover, you can also use pop-up ads to promote advertising products.

The different types of referral marketing models that publishers use are:

Cost per Action (CPA): 

Several affiliate networks can find options that suit your mobile apps. From this model, promoting other applications, advertising products with pop-ups, or promoting applications through an in-app store to earn money.

Cost per Click (CPC): 

The revenue models are based on the total number of clicks via ad displayed. Here you can join popular networks such as Google’s AdMob for this model. These provide text and display ads that help app publishers to earn money.

Cost Per View (CPV):

The model involves charging based on the total number of ad interactions or video views. For example, BrightHouse increased its app earnings by 130% via cost-per-view networking. They used videos and interstitial ads in their smartphone gaming to create natural breaks in the gaming session.

Cost per Installing (CPI): 

Cost per Installation or CPI is a new marketing mechanism and is the mobile equivalent to CPA or Cost Per Acquisition in the digital marketing world. CPI means paying for each advertised app installation in your free app.

The fee for this model ranges from $0.80-$3.00, with online affiliate networks having a wide range of global traffic generation campaigns that promote other apps.

Freemium Upselling:  

When talking about freemium upselling, these apps are available free of cost to download but contain premium features. These elements are accessed through in-app purchases.

In the Freemium model app, publishers offer basic or limited features to users to experience the app. But to ‘unlock’ advanced features,, they need to upgrade their plan or buy one entirely.

These types of freemium model apps allow users to download the app without any charges, and when they like the content, they can get complete access by purchasing the app. Using these tactics and gaining new users is possible, as premium features are optional. According to the mobile app development business in freemium upselling, customers download the app for free and must pay for premium services.

Also, customizing iOS and Android app creation services offers various possibilities for creating free apps, and business owners are using opportunities to attract customers.  

Monetizing your free app - a good idea or not?  

When you know the highly competitive market, app publishers can use new app monetization methods to create more useful free apps for users. But, it would be foolhardy to use only a single app monetization strategy. You could use one or two together to create a comprehensive plan to bring your app to the limelight of your target audience. However, this process takes a long time. So, why not sell your app on KalaGato?

We provide quick and easy app selling within 30 days. Our experts respond in 72 hours, and within 2 weeks, you can receive an offer. Our automated tool for app valuation and transparent buyer-seller relationships completes the entire process within 30 days. So, start looking at selling your app on KalaGato!