Want to Boost Ad Revenue? Start With "This"
"Doesn't Alarmy naturally have high ad revenue because of its massive DAU?"
This is a question I get often when discussing ad revenue. It carries two underlying assumptions. First, "ad revenue fluctuations fundamentally follow DAU fluctuations," and second, "therefore, any actions to increase ad revenue will have little to no impact."
Is that really the case?
While it's true that DAU heavily impacts ad revenue...
There are definitely actions you can take to increase ad revenue even if your DAU stays flat. In fact, through the efforts of multiple teams, DelightRoom has achieved ad revenue growth that outpaced our DAU growth over the last few years.
Today, I want to walk through the ad revenue optimization methods Alarmy has validated through experiments and analysis, and share some specific, actionable steps you can take.
First, Secure Buyers — Finding Demand That Fits Your Ad Inventory
As I mentioned in a previous post, ad inventory is a product. Therefore, the presence of entities willing to buy (demand) largely dictates your ad revenue. If you're using a standard ad monetization approach, ad networks act as the collective pool of these willing advertisers. Since each network has different advertiser characteristics, if you only rely on a network that lacks advertisers interested in your inventory, your revenue will inevitably fall short of expectations. Especially in today's common in-app bidding structures, having more competing advertisers increases the likelihood of selling at a higher price.
So, should you just integrate as many networks as possible? While increasing the number of buyers is important, you have to prioritize considering the resources required for app performance and SDK management.
For example, what kind of ads would a famous short-form platform's ad network primarily hold? Naturally, they'd have plenty of full-screen video ads similar to short-form content. So, if you have a lot of full-screen video ad placements, you should strongly consider integrating with that network first.
However, it's not always easy to predict demand characteristics. That's why you need to continuously run experiments and validate performance across various cases. I'll cover this in more detail in the next post, but this is exactly why advancing ad revenue requires support not just from ops managers, but also from the product and data teams.
Second, Raise the Selling Price — Increasing the Appeal of Your Ad Inventory
eCPM is the average selling price of your ad inventory. Which placements sell for the highest price? Naturally, the ones that are most attractive from the buyer's (demand) perspective. (Reference: https://medium.com/delightroom/광고수익화를-시작할-때-가장-먼저-생각할-것-f58d98772145)
Thus, the most fundamental way to boost eCPM is to build an appealing ad inventory. Specifically, here are a few ways to do it.
Creating ad slots in locations with high click-through rates:
CTR (Click-Through Rate) is the metric advertisers care about most. Placements with high CTRs indicate strong user engagement, which translates into higher bids over the long term. Publishers simply need to place ads in areas with high user attention and active interaction.
Just remember to avoid locations that induce accidental clicks. Not only does this violate network policies, but it also leads to low install or purchase conversion rates, ultimately harming your revenue. The key is finding that sweet spot where users can naturally notice and click the ads.
That's why, in many cases, the best place to put an ad is right where the app's core features are. If we define core features as the reason users open the app in the first place, then naturally, those screens have a much higher chance of generating interactions like scrolling and clicking.
If you're collecting user behavior data, look for screens with high dwell times and visit rates. That's exactly where your app's core features live, and where you can expect real revenue impact from adding an ad slot. After all, it's a placement that guarantees not just high CTR and pricing, but also a massive number of impressions.
Of course, it's true that people are often hesitant to add ads in these spots precisely because they are exposed to so many users. However, we have to remember that from a user's perspective, ads are much more tolerable when they're on a screen that provides substantial value. I'll try to cover this balancing act between UX and ad revenue in more detail later.
2. Managing segmented mediation groups
Generally, if you're working on app monetization, you'll use mediation platforms like AdMob, AppLovin, or Unity. These mediation platforms provide various features that make it easier for publishers to tap into diverse demand and manage ad monetization.
Here, a "mediation group" typically refers to the unit provided by these platforms for managing ad revenue. By properly segmenting these mediation groups, you can sell your ad slots at higher prices and boost your revenue.
For instance, you've probably heard that ad selling prices vary based on the user's country. Naturally, countries with larger mobile markets or greater overall spending power boast higher ad rates. You can look at your user distribution by country, and if there's a place with a distinctively larger market size—like the US—you might consider strategies like creating a separate mediation group for US users and setting a relatively higher floor price.
Beyond geography, you can also consider segmenting by factors that affect eCPM, such as ATT (App Tracking Transparency) opt-in status. Of course, you'll need to weigh the added management overhead that comes with an increasing number of mediation groups when deciding whether to split them.
Obviously, the factors influencing eCPM are incredibly diverse, and the actions you can try are just as varied. So, what you prioritize will differ depending on the publisher's situation and the app service's unique characteristics.
The thing to remember is that if the value your ad inventory provides to advertisers hasn't changed, you can't artificially expect eCPM to jump. In that case, it might actually be smarter to consider increasing impressions to drive up your final revenue.
If you know the enemy and know yourself...
There's a saying: "You need not fear the result of a hundred battles." In ad monetization, we could tweak that to: "If you know yourself and relentlessly repeat experiments and analysis." I've introduced a few flagship methods for advancing your monetization ops, but there are plenty of other strategies out there.
The core takeaway is to understand the traits of your ad inventory and validate hypotheses through experiments. There is no magical, one-size-fits-all strategy that works identically across every app. Naturally, pulling this off requires deep understanding and backing from the product and data teams, not just the operations folks.
I'll save exactly how the product and data teams at DelightRoom contribute to ad monetization for another post.
Read more on DelightRoom's Ad Monetization
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