This post is about the mistakes that mobile app publishers are making when measuring their ad based monetization. Whether your company is using general purpose analytics, attribution, the mediation dashboard or in-house BI to track your revenue from advertising you are probably making at least one of these mistakes.
1 – Week by Week Testing instead of A/B testing
From what I have seen so far this one is a fail for 100% of the mobile app publishers I have talked with. Lets say you want to test a new feature that increases the number of allowed rewarded videos from 3 to 5. There is a right way and wrong way to do it. A/B split is pretty easy to implement on Google play due to their controlled roll-out feature and on iOS it’s not that hard either. However, when it comes to ad revenue companies use week by week testing. In other words they implement something and compare the ad-revenue of this week vs. last week. Here are a few reasons why this is wrong:
- There could be campaign changes between week 1 and week 2 – campaigns go up and down on the ad-network side all the time if week 2 was better due to a big campaign you might think it’s because the changes you made. A/B tests eliminate that
- Your user behavior and usage volume might be impacted by real world events like a holiday weekend or a big sporting event – with A/B tests the events impact both groups so it’s a fair test
- With week by week testing you have to go “all-in” and you don’t even know if the revenue change came from the group who received the change
- It’s almost impossible to reach statistical significance with week by week testing
The reason why companies don’t implement A/B testing for ad-revenue is that doing so without a specialized ad revenue tracking solution is very complex. However, optimizing with week by week testing is very limited.
2 – Assuming all users are worth the same
Most mobile app publishers assign very specific value to each user when it comes to IAP revenue but fail to do the same for ad revenue. The typical approach is to assume all users are worth the same amount of revenue. This is in-fact very far from reality. First of all, not all users even see ads when it-comes to rewarded videos and even if you look at the group that does see ads there are users that install a few apps and are worth more than $10 while others who only watch the videos end up not generating any revenue.
3 – Not measuring your eCPM decay
“The 1st impression of a user is worth the same amount of money as the 10th impression” – FALSE. The performance of the 1st impression is higher and so the CPM that advertisers are paying in RTB are higher and the eCPMs you are getting from the rewarded video network is also higher for the first impression from the very same reason. As the same users sees more and more impressions in the same day he becomes blind to the ads and the CPM decays. Assuming that all the impressions are worth the same amount of money is a common mistake by mobile app companies.
4 – Focusing on impressions rather than Opt-in ratio
Rewarded video became one of the biggest sources of advertising revenue for mobile app companies. However, it’s important to understand that this is an opt-in type of interaction. With some games, only 10% of the users choose to see the ads while in others it can be as high as 70%. Since the 1st impression pays a lot more than the subsequent impressions, focusing on increasing the number of impressions is a mistake. Companies should focus on increasing the Opt-in ratio instead
5 – Not tracking churn by campaign creative
The last mistake is related to the relationship between ads and churn. There are 2 type of ad interaction that can cause your users to churn:
- Ads that have a negative experience – are deceptive or have low quality creative
- Ads of competing apps might steer your users away from your app
Not tracking the impact of different ad creatives placed by the ad-networks in your app could be dangerous.
If you want to improve the way you are measuring your ad revenues and stop making these 5 mistakes – check out SOOMLA Traceback – Ad revenue tracking platform.