Tag Archives: iAd

iAd Vs. AdMob – Clicks, Fill Rate, Impressions, eCPM and Revenue

About two weeks ago I updated one of my apps to use AdMob mobile ads when iAd fails to deliver (pretty damn often). Instead of swapping out iAd for AdMob, I use the iAd “didFailToReceiveAdWithError” delegate method to request an AdMob ad when iAd fails. This means that AdMob shouldn’t take any income away from iAd, but only supplement it. I thought I’d take a look at the stats and compare the performance of the two ad networks on my app.

(The following numbers I’m referring to are from the time period from 1/25 to 2/7)

For an idea of scale, my app, Anime Nano, gets about 600 iAd requests per day. My app analytics software (Flurry) is saying I’m getting about 600 sessions per day. The thing is that about 1/5 of those sessions are on the iPad (and I haven’t enabled iAd on the iPad yet), so I think that on average, the iPhone apps are making a little more than one iAd request per session.

Despite the fairly healthy rate of requests that I’m getting, iAds are only getting sent about 15% of the time. This percentage is what’s known as the “fill rate.” This is also what most developers complain about being too low. The clickthrough rate is actually pretty good at 0.81%.

When iAd fails to deliver (85% of the time), I fall back to AdMob. The fill rate for AdMob is a high 88%, though the past few days it’s been closer to 99%. The CTR, however, is a fairly low 0.25%, which is less than half of iAd. This is partly due to the fact that AdMob ads refresh more often, so the number of impressions is higher.

I’m going to describe my revenue in terms of percentages here since ad platforms typically don’t like it when publishers publish their income. Not sure if that’s changed lately, but whatever! In the time period from 1/25/2011 to 2/7/2011, I made 2.3x more with iAd than AdMob, even with the super low fill rate (and impressions) of iAd. This is pretty interesting since iAd only shows up 15% of the time. There were actually a few days where AdMob beat iAd, but there were a couple of days where iAd made a killing (relatively), probably from those super awesome interactive ads which I still haven’t experienced firsthand yet.

For now, I’m content with the fill rate of AdMob, though it sort of pains me to see such a low click rate and revenue per click. Something tells me that if AdMob worked harder at increasing ad quality (like iAd), they’d be able to charge more and their advertisers would probably see a better return on investment. Most of the advertisers don’t even bother to use an image ad, which I assume would increase the clickthrough rate.

I noticed something really strange when looking at ads on my app. There’s no way for advertisers to disable ads on devices that already have the app installed. I keep seeing Amazon Kindle ads on both my iPad and my iPhone that already have the application installed. As a developer, I know there’s a way to prevent those ads from showing by detecting whether the app is installed at runtime. I think this strange behavior happens on both iAd and AdMob. If anyone from either organization is reading this, contact me!

As far as the future of ads in mobile apps goes, I hope Apple will continue working on increasing the fill rate, and that AdMob tries to increase relevancy and ad quality. Right now it’s really frustrating to see my “inventory” not live up to its revenue potential.

Performance vs. Brand Advertising on iAd

I’ve got some more thoughts on iAd after trying iAd out on one of my apps for about a month now.

As I noted in an earlier post, Apple responded to a really low fill rate on their iAd program by enabling developer ads. Developer ads are simple banner ads that entice a user to download an iPhone app. Here’s what the use case looks like via Business Insider:

To Apple’s credit, the workflow is actually pretty good. It doesn’t require users to leave the app to download another one.

Since developers can’t really afford the insane $2 cost per click that the big media customers pay, Apple is charging $.25 a click instead, and no cost per impression. Theoretically, this should mean that the fill rate would be very high (as long as developers are not maxing out on their daily spend limit or too aggressively filtering out apps). Yet I’ve noticed a pretty big fall in fill rate (from about 30% to 20%) in the last month.

I think the main issue is that Apple never really intended iAd to be used for performance advertising. Performance advertising is about getting that direct action (in this case, an app download). Apple’s been pushing iAd as a great Brand advertising solution (where the user is not expected to go out and buy Dove soap from their phone). That’s why the premium brands are willing to pay so much per click and impression. By comparison, AdMob ads on the iPhone seem to be more geared toward performance advertising.

By introducing developer ads, I think Apple has tried to appease publishers at the cost of the perceived premium value of iAds. Sure, the developer ads aren’t as flashy as the premium advertisers’, but $.25 versus $2 a click for the same piece of real estate is quite a difference. Add the perception that iAds for developers are not cost-effective and you could come to the conclusion that Apple is doing it wrong. It doesn’t help that the premium brand advertisers seem to be frustrated with the process of dealing with Apple as a gatekeeper.

So what can Apple do to fix this? They should go back to their specialization: doing one or a few things really well. They should focus on iAd as a brand advertising platform. They should work on getting as many large partners onto iAd as quickly as possible. This will alleviate the growing pains that publishers (including me) are feeling with fill rates. Right now it seems like Apple is reacting rather than acting; following rather than leading. They need to show that they’re serious about carving their own niche in the mobile advertising space.

What Happened to Yahoo (and What Could Happen to iAd)

I recently read an essay by Paul Graham on what happened to Yahoo. In it, he describes how Yahoo acted like a media company when it was really technology company, and how funky management made it into what it is today. One quote struck me as relevant today:

By 1998, Yahoo was the beneficiary of a de facto Ponzi scheme. Investors were excited about the Internet. One reason they were excited was Yahoo’s revenue growth. So they invested in new Internet startups. The startups then used the money to buy ads on Yahoo to get traffic. Which caused yet more revenue growth for Yahoo, and further convinced investors the Internet was worth investing in. When I realized this one day, sitting in my cubicle, I jumped up like Archimedes in his bathtub, except instead of “Eureka!” I was shouting “Sell!”

Having just integrated iAd into one of my iPhone apps I’ve noticed that pretty much all of the ads are for other apps. Most of these apps are “free,” and I assume that they could potentially be using iAd for revenue as well. This is a result of low fill rates for iAd and Apple wanting to offer developers a way to advertise their apps. It makes sense, but one has to wonder exactly where all the money is eventually going (Apple gets a 40% cut of iAd revenue), and who has the incentive to keep that system running.

A while ago I wrote my predictions for iAd. I didn’t foresee Apple opening iAds up to developers who wanted to advertise their apps. That’ll help the fill rate, but I can’t see it helping CPMs when developers have something like a $0.25 CPC and it was reported that the larger media campaigns like Dove were closer to $2 CPC. Seems like another race to the bottom, just like paid app prices.

Thoughts and Predictions on Apple’s iAd Platform

After reading this article on the upcoming iAd release, I have a few thoughts on the future of Apple’s mobile advertising platform.

iAds on Apple devices will be rich media experiences, they’ll stay in the app, and they’ll make developers tons of money. That’s what Apple assumes, at least. The major takeaways from this article are that only a limited number of advertisers are signing on at first, and at a really high premium. What’s more, iAds are costly to “develop” which will limit the number of advertisers at first.

Advertising relies on a steady supply of supply (advertising inventory) and demand (ad impressions). The advertisers supply the… well, supply, and the developers handle the demand by providing users who will see the ads. Because there’s not much supply yet, and because I have a feeling many developers will integrate iAds into their apps or already have, I predict a few things happening:

Users will go through a high degree of ad fatigue. With only a few different ads available, users will probably get bored of the same ads over and over. Sure, they’re rich and interactive, but if I see that same Toy Story 3 ad a billion times, it won’t be effective anymore. This will probably contribute to iAd blindness.

Initial advertisers will pay a premium for being first. Because of the limited inventory and abundant number of impressions, advertisers will probably end up using up a lot of their inventory. Apple might have a way of throttling ad impressions so they remain constant throughout a time period (or at least they should). If so, iAd display will be pretty erratic. Sometimes they’ll show and sometimes they won’t. Of course, if that happens, publishers will be upset that their placements aren’t selling.

Publishers (developers) will make some money, but not as much as they thought (at first). Or at least, not until the ad inventory goes up. Because Apple will probably throttle the advertisements going to them, or users will be weary of the same ads showing up, publishers will suffer at first. In the long run, publishers will probably end up making more when the supply and demand issues fix themselves.

Advertisements will probably start off being innovative, then fall in quality. I have a feeling they will mirror the app store apps. There will be many high quality ads at first, but once Apple requires a steady amount of rich ads, others will develop iAds for advertisers. The ad inventory quality will suffer because of the cost and time associated with creating high quality ads.

On a high level, I see a few early issues in the iAd platform, mostly the demand for ads outweighing the amount of initial advertisements. Over time, this will correct itself, but at the cost of the quality of ads delivered. Think of how the App Store degenerated into crappy mirror apps, etc. Apple would like to keep the quality of their ads high, but I can’t see this happening based on the number of ads they need to deliver.

This will happen because Apple is offering the iAd platform to all publishers (developers). If they had hand-picked a few to beta test, I have a feeling the supply and demand would match up. Apple knows they’re behind in the game though, so that’s probably why they’re releasing it to all developers. In the long run, I think the iAd platform will be a hit for advertisers and developers. Hopefully the level of ad quality doesn’t suffer so much that it affects the end user too much.