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Vol. 9 What’s the best ad placement strategy for your mobile app?

In the previous volumes we’ve discussed how to use and integrate various AdMob features. Now it’s time to talk about the most popular question: “what’s the best strategy to place ads in apps?”

The various AdMob features we’ve covered by now will help you address this question. Let’s break down the question into sub-questions and handle them one by one. How to decide where to place ads? How should to choose ad formats like banners, native ads, etc.? How to increase impressions my rewarded ads get?

Below, our publisher growth team shares their ideas to help you with these questions.

Table of contents

1. Factors determining where to show ads
 1.1 Factors determining advertising revenue
 1.2 Ad placement innovations to increase CTR
2. Banner placement
3. Native ad placement
4. Interstitial ad placement
5. Rewarded video ad placement
 5.1 Rewards should be attractive to users so that they will want to see ads
 5.2 Offers should come at the right time when users need the rewards
 5.3 In-app guidance can facilitate repeated watch

1. Factors determining where to show ads

Ad placement is important because ads generate revenue only if seen by users.

To build up a placement strategy, the first thing to keep in mind are the determinants of advertising revenue.

1.1. Factors determining advertising revenue

Ad revenue is calculated by the following formula:

Ad revenue = Impressions x CTR x CPC

Impressions: number of times ads were displayed
CTR (Click Through Rate): ratio of ads clicked by users to total impressions
CPC (Cost Per Click): amount paid by advertisers everytime an ad is clicked.

CTR has the pivotal impact on revenue because it leads to increased awareness and customer acquisition for advertisers.

Advertisers always consider how many people have deepened their understanding of their product or used the product thanks to ads.

Since CTR is a metric for measuring what advertisers care about most, they are willing to pay more to place ads in units with high CTR.

Therefore, from the app developer’s perspective, improving CTR will yield higher revenue (CPC).

1.2. Ad placement innovations to increase CTR

CTR is calculated as follows:

CTR (%) = Clicks / Impressions x 100

As you can see, to increase CTR you need to

1. Increase the number of clicks
2. Reduce the number of impressions

You should never keep clicking on an ad yourself to artificially increase CTR, as you will be penalized. In server case, your account might get suspended in severe cases.

It’s also counterproductive to reduce impressions too much, since too few clicks will be generated. Overall, CTR can be improved by reducing ads that don’t get enough clicks.

Users are unlikely to click ads they don’t notice, as well as ads they are not interested in.

Ad placement strategy should evaluate how noticeable ads are, as repeatedly displaying ads that go unnoticed might reduce the value of ad units.

Viewable impressions (vimp) and viewability rates* are useful metrics to avoid placing ads where they don’t catch users’ eyes. Vimp shows the number of times an ad loaded on apps. Viewability rates are the percentage of ads appearing in users’ visible area.

*In AdMob, these two metrics are called “Viewable impressions” and “% Viewable impressions.”

While high viewability rates alone can increase CTR, conversely, units with low viewability rate are not likely to fully unlock the potential of ads shown there.

Possible reasons for reduced viewability rate include users not reaching the location of ad spaces, or ads not being displayed in time due to latency associated with mediation.

If an ad placed so that it attracts attention right after a page is opened has a low viewability rate, mediation may be the cause.

We recommend reviewing revenue of each ad source, remove low revenue sources, and utilize Open Bidding. Please refer to Vol.4 and Vol.5 for more information on mediation and Vol.6 on Open Bidding.

2. Banner placement

There are several ad formats, each with its own placement strategies. We’ll start with banners. There are Four essential characteristics to consider:

1. Banners take up a part of the screen
2. Banners can be anchored to a specific area of the screen during scrolling (sticky banners)
3. Banners can appear and disappear inline with your content during scrolling (inline banners)
4. Banners can be set to larger sizes to increase CPM (e.g. CPM for 300×250 is twice as high as 320×50

With banners, there are two placement strategies to increase your earnings:

1. Placing sticky banners – one can expect high viewability, as ads will remain visible as users scroll down
2. Placing large inline banners – one can expect high CPM, as the banner would display larger size ads, including video

Advantages of banner ads
Easy to pick sizes as only a few are available
Easy to integrate
Stable revenue due to high volume of submissions

Before you begin
There are a few more things to keep in mind when integrating banners:

・Choose adaptive banners
Adaptive banners are a new format that optimizes ad sizes to fit different screens. This allows for a better appearance, better use of space and increased revenue. Adaptive banners are easy to migrate to even if you’ve already integrated banners. See Vol. 7 for more information.

・Comply with policies
It’s not only for banners, but there are rules to follow, especially when integrating sticky banners. If you disregard them, there are severe penalties, in the worst case your account could get suspended, and you will no longer be able to use AdMob. Check out AdMob guidance for discouraged banner implementation for details.

3. Native ad placement

Native ad formats enable monetization through ads matching the look, feel and function of the media format where they appear. The ads should fit in an apps’ styles and themes.

Three key characteristics of native ads:

1. Native ads have customizable components
2. Native ads do not disrupt a user’s interaction with an app
3. Native ads are flexible, and they can get inserted anywhere on screen

There are three optimal strategies for displaying native ads:

1.Display on timelines of social media apps or news feeds of editorial content apps.
2.Display on loading screen of game apps.
3.Display on order confirmation screens after checkout session of shopping apps.

When it comes to integrations, how “natively” they fit in apps should be your main concern. It mostly depends on three factors:

1.Rendering should be consistent with the appearance and format of the app’s content.
2.Advertising should be relevant to the app’s content and it should be equally interesting
3.Native ads should make the screen more appealing, using space in the same manner as the app’s content

Appealing native ads deliver high CTR and UX.

By considering what a user wants on each screen, what he or she thinks, when the user’s focus switches, we can implement the best of native advertising.

Taking advantage of the flexibility of native ads and placing them along a user’s journey is crucial to successful implementation.

4. Interstitial ad placement

Interstitial ads are an app-specific ad format that can display both images and videos in full screen mode. The format has haigh viewability, and thanks to its large size it can host highly informative and appealing advertisements.

High CTR produces high CPM, you can expect it to be 10-15 times higher than that of 320×50 banners.

However, on the flip side, full screen ads interrupt app use and could disrupt UX.

That’s why it’s important to prevent negative impact on users when implementing interstitials. To do that, we suggest to focus on:

・Smart timing
・Frequency cap

Interstitials can be a revenue driver with hundling both above appropriately. The following is the details.

Interstitials can be a real revenue driver if both are handled appropriately.

Smart timing

Show your ads at the right time and don’t show them at the wrong time. We’ve already implied it a bit in the section on “Native ad placement.”

The right timing would be when a users’ attention gets diverted at natural breaks in an app’s flow, for instance when he or she returns from an article to the home screen or when a user reaches a certain point in his or her activity, such as the end of a song.

Frequency cap

Interstitial ad is a format that can easily detract from UX, and frequent display could significantly affect your bottom line. In the worst-case scenario, interstitials can induce users to uninstall your app.

To prevent this, set a frequency cap, limiting the number of times an ad is displayed to the same user. You can set a certain time period for the cap as well.

By reducing the number of impressions that don’t lead to ad clicks, you can increase CTR and maintain good UX while maximizing the value of ad spaces.

LIke banners, interstitials also have display rules created by AdMob Note that there are certain prohibited display techniques, such as inducing clicks through misleading or cheating users in pursuit of higher CTR.

Rewarded video ads effectively increase user engagement and retention while providing a positive user experience.

Rewarded video is an ad format that offers users to earn in-app rewards in exchange for watching a 15-30 minutes video ad.

We recommend to keep in mind the following if you want to successfully implement rewarded videos:

1.Rewards should be attractive to users so that they will want to see ads
2.Offers should come at the right time when users need the rewards
3.In-app guidance can facilitate repeated watch

Let’s take a close look at these.

5.1. Rewards should be attractive to users so that they will want to see ads

Whether a user chooses to watch a rewarded video determines your revenue. Rewarded videos are not worth a cent if rewards don’t motivate users to watch them.

That’s why it’s important to provide rewards that users would want even if they need to break off using/playing an app to get them.

However, if you offer products or services through in-app purchase/billing systems, the rewards need to be something paying users won’t feel unfair about.

5.2. Offers should come at the right time when users need the rewards

No matter how luring the rewards are, a user is likely to dismiss a rewarded video if it comes at the moment when he or she is caught up in action and is desperate to continue using the app.

To avoid this situation, you need to offer to view a video at a time when it will come handy to a user and when a reward will make him or her enjoy the apps more. Offering something that would make it possible for a user to continue a game when he or she has lost all of their lives or is failing a critical objective has been effective in many cases.

Other examples include ads in comic book/manga apps that enable users to read the latest unpublished chapters. Along with it, as another tip, users who want to read more chapters faster can be converted to paying users if you set video rewards to enable only one chapter per day, giving paying users unrestricted access.

5.3. In-app guidance can facilitate repeated watch

A user who watches a rewarded video ad once is likely to watch one again, so it’s advisable to actively encourage such users to watch ads more to increase revenue. You can guide them by in-app messages recommending rewarded videos as a way to earn additional bonuses. You can show these right after the user logs in.

A user’s response to rewarded videos depends on multiple factors, including use of subscription plans, emotional response to the content and prior experience with such videos. For this reason, A/B testing at various times and with various rewards is beneficial in determining the most profitable settings.

If rewarded video impressions aren’t increasing, we suggest to consider rewarded interstitials, which we covered in Vol. 8.

In the next volume, we’ll talk about how to link AdMob with Firebase, a cloud backend service developed by Google, and what linking it will allow us to do.

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