In a July, 2014 survey, Google asked app developers
around the world to share their experiences
about the mobile app development process.
Nearly a third told us that the most challenging area was
growing their audience, and a quarter
said monetization proved to be difficult.
Developers felt that these two areas had the fewest resources
and support.
This course will hopefully help developers solve for this.
Ads are an effective and easy way to monetize your app.
In fact, ads are the most common way
to make money from apps today.
Let's dive in and review the ecosystem,
taking a look at the players in the market and the metrics
you'll use to measure your success.
The three players in the advertising game
are users, advertisers, and publishers.
Users are basically you and me, the people
who use apps every day.
Advertisers want to reach users, promoting their product
or brand.
Publishers offer advertisers their inventory,
space for ads within their apps, allowing
them to connect with the right users.
Ideally, an advertising network strives
to balance the needs of each of these three players
for a win-win-win.
Now, let's explore each player's role a bit
further, starting with the user.
As we say in Google, focus on users and the rest will follow.
Users are a key component of the mobile app ecosystem.
They're the ones engaging with apps
and are really the center of this whole app universe.
As a mobile app developer, you constantly
want to grow, connecting with more users who
are likely to enjoy your app.
Advertising is a great way for you to do just that.
You have many channels available to reach your ideal audience
and acquire new users with Google,
including Search, Display, YouTube and Google Play.
Before diving into placing ads, you
want to identify your goals.
Do you want to focus on increasing downloads?
Well, then get more people around the world
to download your app using app installs.
Do you want to focus on re-engaging or existing users?
Look at deeplinking to specific screens within your mobile app.
Do you want to get noticed by a mobile audience?
You can show ads for your website
exclusively in mobile apps.
No matter what your goals with advertising,
it's important to reach a large audience on a global scale,
showing ads that are relevant to the user.
They'll be happy, and your revenue will show for it.
Let's look at the advertiser's perspective.
Advertisers want to place their ads in high quality
applications and reach the right audience.
The increasing amount of time users
spend in apps provides a valuable opportunity
for advertisers.
A window of engaged time to reach out and promote
their offerings.
But to be successful, advertisers
must put the needs of the mobile user first.
At Google, we believe at the best ad unit
is the one that gets the interest of the user
while providing a positive experience.
We invest a lot of resources to offer a smart ads platform that
can target users at the right place at the right moment
with the right message.
This gives advertisers the best opportunity
to present their message in a way that is
going to resonate with users.
So just how does an advertiser gauge success on mobile?
Here are some metrics that are typically important.
Cost per install, or CPI.
This is a fixed bid or rate paid when an app is installed.
In other words, what it costs to acquire a new user.
Value of impressions.
Impressions are the units used to display an ad.
These vary in value depending on the ad format and network.
For example, a text ad will have less impact or value
than an interactive banner ad or homepage takeover.
Click through rate, or CTR.
This is the ratio of clicks on an ad
to its number of impressions.
The idea behind CTR is that the more relevant an ad is,
the more clicks it will get.
So successful ads generally have a higher CTR.
To calculate CTR, take the number of clicks
that an ad receives divided by the number of times
the ad is shown.
For example, if you had 5 clicks and 1,000 impressions,
then your CTR would be 0.5%.
Cost per click, or CPC.
This is the amount paid for a single click on an ad.
Most advertisers use this as their pricing model
since they are only charged when a user clicks on their ad,
rather than paying simply to show their ad.
Cost per 1,000 impressions.
Referred to as CPM.
This is the cost incurred for showing an ad 1,000 times.
CPM is typically used for building awareness,
which is achieved by simply showing the ad.
Keeping in mind the user and the advertiser perspectives,
let's move on to the publisher side.
First things first, what exactly is a publisher?
A publisher is simply a developer
who has a mobile app that they want to monetizing.
In this instance, this is you.
As a publisher, you'll monetize by selling ad space
within your app to advertisers.
Advertisers pay for this valuable space
so they can show ads to users while they're
engaging with your app.
To maximize earnings, it's important for you,
as a publisher, to continually grow your audience
and keep users engaged with your app.
This makes your ad space more valuable to advertisers.
Here are some additional terms that you should be aware of.
Ad request.
An ad request is counted whenever your site requests
an ad to be displayed.
Fill rate.
This is the number of impressions divided
by the number of ad requests.
The goal is to have a high fill rate, meaning
that your app is showing a lot of ads,
providing you with more revenue.
eCPM.
eCPM refers to the estimated income
you'll see by showing 1,000 impressions in your app.
This estimation is based on the historical performance
and is proven with RPM, the actual amount of revenue
earned per 1,000 impressions.
Average ad revenue per user.
This is the revenue earned from ads
divided by the total number of users who were served the ads.
In other words, it's the average value
of each user to your bottom line.
While there are many mobile ad networks out there today,
you should look carefully at their fill rates,
eCPMs, latency, like how quickly the ad loads,
and the quality of the ads they show.
With ads being the most common form of app monetization,
it makes sense that the space is thriving
from all points of view-- the users, the advertisers,
and you, the publisher.
Ad serving networks provide a variety of tools
to keep the app ecosystem booming, giving users
positive, relevant experiences, advertisers
the means to promote their offerings, and developers a way
to earn money on their app.
Thanks for watching.
Be sure to check out other videos from the series,
and go to google.com/admob for more information.