Just as Apple’s iAds went into effect, we heard early reports of developers making ridiculous amounts of revenue from them. One particular developer posted his numbers to the social site Hacker News, showing that they had made about $1,400 in a single day. Obviously, those types of returns had other chomping at the bit to get at iAds, but are these numbers realistic?
These numbers show the developer bringing in $1,372.20 in iAd revenue on 9,300 ad impressions. These came with an 11.8% click-through rate, which is not typical at all for these types of ads. His effective cost per 1,000 impressions (eCPM) was $147.55. According to Business Insider, this is about 50-100x the eCPM that other mobile ads bring in. Any developer would code their fingers to the bone to get results like this on ad revenue alone.
Another developer, Kenneth Ballenegger, explains why we shouldn’t get too excited here. One of the most important things to note is that iAds are new, a novelty. Users are probably clicking on them because a) they aren’t sure what the are or b) they just want to see what they’ll do. These are not your average ads, which usually drop you on a landing page somewhere. Most of the iAds are media rich and interactive.
According to a post by Ballenegger: “another important factor to consider: Most competing ad networks refresh their ads every 30s. iAd does it every 3min. Thus, for the time it takes iAd to display one ad, another network gets to show 6.” Because of small factors like this, you can’t make a direct one-to-one comparison to other ad networks.
To get a fair comparison, the refresh rate for iAds needs to be added into the equation. After some fancy math, we find that the eCPM for iAds is closer to $1.60-$2.50. Much less than the $147 reported by the developer on HN, but still a bit higher than the 80 cents or so you might see from Google.
One final factor to consider is the fill rate for iAds. Ballenegger says these are “appalling low.” What happens is that your app requests an ad to display, but there is no ad available. In this case, you miss out on the chance for an ad impression and click-through. Rather than miss out on some cash, Ballenegger recommends falling back on another ad network for failed iAd requests.
Once the hype around iAds dies down, we may still see slightly higher revenues generated from them. As a developer, you probably don’t want to put all your eggs in one basket. Take advantage of all your options to maximize your cash flow.