Advertising (ad) revenue: What is ad revenue and how does it work?

What is ad revenue & how to calculate it?

Ad revenue is the money apps generate from in-app advertising. App ad revenue is calculated by multiplying ad impressions by eCPM.

Ad revenue = impressions * eCPM

How does ad revenue work?

To generate app ad revenue, app developers must put together a robust ad monetization strategy, based on two main pillars: ad unit strategy and waterfall strategy.

First, implementing the right ad units for your app and placing them at high-converting points within the app flow is what will convert DAU, or daily active users, into impressions. This includes rewarded video ads, interstitial ads, banner ads, and offerwall ads.

Then, managing the ad waterfall is what turns these impressions into ad revenue. The best way to do that is to activate in-app bidding, which automates the waterfall optimization process for you.

To further increase revenue, be sure to constantly run ad monetization A/B tests, starting with these 5.

Mobile game ad revenue

Mobile game ad revenue refers to the earnings generated from in-game ads such as rewarded video ads, offerwalls, interstitials, and banner ads - rather than in-app purchases as part of an app’s monetization strategy.

Gaming ad revenue is calculated by multiplying the number of ad impressions an ad generates multiplied by eCPM.

How much money do apps make per ad?

The amount of money apps make per ad depend on both the genre of the app and the ad unit that's implemented. It’s important to note that generally, app developers measure ad revenue by looking at eCPM, or the revenue generated per one thousand ad impressions - not just a single ad.

For rewarded video ads, the average revenue per impression in the US is $0.02. The average revenue per completion is $0.16 for interstitials and $2.50 for offerwall.