Historically, developers have preferred to set up their waterfalls according to specific price points for each country, sometimes creating dozens of waterfalls for each game or app. It was considered best practice - after all, the more granular the waterfalls, the more optimized the performance.
However, managing too many country-specific setups is inefficient, not scalable, and may impact performance.
The recent introduction of in-app bidding, which automates monetization, as well as improvements to mediation management, are greatly reducing developers’ dependency on manual operations - so while waterfall optimization is still important, it’s become less of a challenge today.
To adapt to today's monetization setups and further improve performance, we’ve been working with our developer partners to test the impact of running fewer country-specific waterfalls alongside an aggregated worldwide waterfall - and the results have been encouraging. Read on to learn how top game developers like Jam City and Unico are using this strategy to increase ARPDAU and eCPM, and best practices for making sure you get the same results.
The benefits of limiting country-specific waterfalls
From what we've seen, managing a handful of country-specific waterfalls separately while aggregating the rest of the world into another waterfall, almost always outperforms a monetization strategy based on many country-specific setups. Similarly, developer partners have found success in managing one dedicated setup for countries that generate 80% of the revenue, and a second for the remaining 20% - or even one worldwide waterfall encompassing instances at price points across all countries. Here's why:
Less manual operations
Today, waterfalls are complementary to in-app bidding, which despite significantly minimizing manual operations through a real-time auction, still requires developers to look after its optimization. Consequently, setup mistakes are common and they become time-consuming to manage - especially when there are dozens of them. This makes it difficult to maintain efficiency, high optimization, and scale across a portfolio.
However, there's of course much less maintenance in manually managing fewer monetization setups, as not having to optimize hundreds of instances across several country-specific waterfalls saves precious time - allowing developers to scale while still maintaining precision, and freeing their schedules for other tasks.
Kiel Lebaron, Senior Director of Ad Monetization at Jam City told us, “it might seem overly simplistic at first glance, but global waterfalls allow us to quickly understand the health of our mediation setup, discover pricing opportunities and work with different networks to capitalize on them.”
"We can quickly understand the health of our mediation setup, discover pricing opportunities and work with different networks to capitalize on them"
- Kiel LeBaron, Senior Director of Ad Monetization at Jam City
“The benefits we see outweigh the manual effort of managing multiple country groups, both in revenue and time saved; the latter is truly important as it allows us to work even closer with game studios on product design and ensure we maintain great ad experiences for our players,” he continued.
Erkay Uzun, co-founder at Unico Studio, a hyper-casual gaming company, agreed, adding that maintaining fewer waterfalls “helps us save time previously spent managing complex waterfalls - and now we can use our time to focus on optimizing our products and making new games.”
Improved in-app bidding performance
In addition to saving time, decreased manual operations means that the remaining country-specific waterfalls end up being more optimized and better organized - and it’s this increased optimization that boosts in-app bidding performance.
First off, minimum mistakes during optimization means that the in-app bidding solution has a greater chance of serving the bidding ad sources in the correct position in the hybrid waterfall.
In addition, in-app bidding performs best when there’s high competition, meaning there are many instances with decent fill rate, and networks in the hybrid waterfall are fighting for each impression. Since it’s easier to keep an eye on just a few country-specific waterfalls and ensure that their instances are kept tight and in small increments of each other, competition goes up and so does in-app bidding performance. However, it’s important to note that high prices for tier-3 countries don’t always get decent fill, and may cause latency - so be sure to take both eCPM and fill rate into consideration when organizing the hybrid waterfall, and remove the instances that don’t make the cut.
Increase in revenue
The combination of the above two points brings us to the next benefit of limiting country-specific waterfalls - higher revenue.
“After running an A/B test with the ironSource team, we saw much better results in terms of eCPM and ARPDAU. In fact, our ARPDAU increased by 7.2%, revenue by 4.7%, and eCPM by 23%,” Erkay Uzun, co-founder at Unico Studio told us.
"Our ARPDAU increased by 7.2%, revenue by 4.7%, and eCPM by 23%"
- Erkay Uzun, co-founder at Unico Studio
Similarly, Netmarble, a Korean gaming company that develops mobile role-playing games, A/B tested the performance of a specific country group against a global waterfall, and saw a 20+% increase in revenue and 50+% increase in eCPM from their global setup.
As we mentioned, the manual effort needed to get more than 20 waterfalls perfectly optimized is more than a team can handle and provides too many opportunities for error. Slight imperfections in too many waterfalls add up, and restrict the ability to maximize ARPDAU on the app level. But by limiting the number of waterfalls they run, developers can more easily notice instances that are out of place or generating a low share of voice in revenue, which they can reorder or replace with higher-performing ones - ultimately driving up revenue.
In addition, revenue goes up because aggregated waterfalls ensure that instances for all countries are well optimized, even the low volume ones. Typically, developers only focus on optimizing waterfalls for their top countries (there are only so many instances they can watch over in a given week). But though low volume countries don’t bring much revenue by themselves, pooled together, they add up - and putting them all in one rest-of-world waterfall reduces the chances that these instances will be ignored and left unoptimized.
Best practices for building worldwide waterfalls
Stuck on how to get started? Follow these tips to start building your new monetization setup.
Determine how many waterfalls is best for your app
Depending on DAU per country and eCPM, run tests to determine the ideal number of waterfalls to run with. Is it better to have a few country-specific waterfalls paired with a global waterfall, or one waterfall for countries that generate 80% of the revenue and one for countries that generate 20%?
Pay attention to the price points at the bottom
For waterfalls that combine instances across multiple countries, place the same amount of focus on the bottom of the waterfall that you do the top of the waterfall. In other words, don’t forget about optimizing the lower prices at the bottom of the waterfall. This ensures your low volume and low eCPM countries have high fill rates and are highly optimized.
Watch out for outlier instances
Regardless of how lengthy your waterfall is, make sure you stay on top of the percentage of revenue each instance is taking. Be on the lookout for instances that vary from the majority. For example, if with 20 instances in your waterfall, each instance averages to about 5% - so an instance that’s way off the average, like 0.5%, requires some attention.
Don’t just look at the country breakdown
Pull a report with all your instances across all your waterfalls and then filter by revenue, sort from highest to lowest. Now you have a complete revenue breakdown, regardless of country, and can see clearly which instances perform the best. Make sure the top-performing ones on this list are the ones that make up your new waterfall.