Making a large and steady income off your advertisements is the ultimate goal most folks in this business strive for. Every now and again you will ask yourself – am I truly earning as much as I can? If you’re not attributing your ad revenue to users, groups, and sources, this answer might as well be ‘no’. But first of all, what annual profit threshold should you cross to start concerning yourself with ad revenue attribution?
In our humble opinion, the minimal amount is around $1M, but if your yearly ad income is regularly crossing the $5M mark and you are still not attributing revenue, then we’re sorry to say – you’re losing quite a bit of money. Let’s take a look at five mistakes you are making by not attributing your ad revenue:
1) You are shutting off ROI-positive campaigns
Whatever you may call it – media buying, user acquisition, or measuring marketing efforts – this is the primary reason why you should worry about ad revenue attribution. Since you are spending a lot of money to attract new customers, you need to know whether these efforts are bringing you ROI.
The sole attribution of your IAP revenue to the marketing efforts is a major mistake. There are campaigns and ad groups out there with the potential to attract valuable users who might not necessarily be large spenders in your app but will generate ad revenue, making the campaign ROI positive. By not properly attributing your ad revenue, you are shutting off ROI-positive ad groups and campaigns, which ultimately means you are missing out on an opportunity to earn a larger income.
2) You continue running ROI-negative campaigns
Many companies in this business are guilty of committing some of the common lapses in judgment regarding in-app ads:
- Paying users don’t get to see them
- Ad revenue is attributed to the same principle as the IAP revenue
Not showing ads to paying users means IAP profit-heavy segments don’t rake in much ad revenue. Inferring an even distribution between all installs may be somewhat better, but it still means you are over-attributing revenue in IAP-heavy segments. The result? You continue running many ROI-negative campaigns that should have been shut off.
To illustrate the losses when committing this mistake, let’s say a certain app brings 50% ad revenue and 50% IAP revenue. The company behind the app incurred $100K of costs on a campaign that brought $60K in IAP revenue. Because the split is 50/50, they presume they generated an additional $60K in ad revenue or $120K total, while they actually only earned $20K from ad revenue on that segment. Thus, the total profit was $80K – obviously less than $100K they paid. In the end, the campaign keeps running although it’s draining the company instead of bringing it profit.
3) You do not target VIP users’ lookalikes
The campaigns that bring in the largest revenue are usually Facebook ad campaigns, targeted to audiences that most closely resemble your most profitable users. Therefore, the majority of companies use this strategy when they start buying media.
Be that as it may, if your app is ad-supported, you can’t possibly know who your VIP users are except if you attribute your ad revenue. Consequently, without knowing who they are, you rob your company of the income opportunities offered by this marketing strategy.
4) You fail to use A/B testing to optimize ad exposure levels
One of the essential prerequisites for maximizing your ad revenue is A/B testing. The more serious you are about it, the more it can help you boost conversion rates and other factors.
Not attributing ad revenue equals not measuring the effect of various ad exposure levels. As a result, you cannot make data-driven decisions regarding the right time to launch your cross-promotion ads vs. revenue-making ads. This inability to make decisions based on hard facts and numbers regarding your ad revenue is hurting your company big time.
5) You are making country-based ad mediation rules
If your app’s ad revenue is hitting $1M, then you are probably utilizing multiple ad networks along with a mediation platform to monitor which of them is bringing you more impressions. However, if you are not attributing the ad platform to users and segments, the mediation platform prioritizes and limits it to the country level. This means every user from a given country is treated as the same, which we know cannot be optimal.
For instance, let’s say you deploy performance-oriented ad networks who pay CPI and brand-oriented ad networks who pay CPM. Here you want your ad mediation to show the performance ads in situations where more users are more inclined to click and install. Mediating solely on a country basis means potential ad revenue is left on the table.
All this talk without actionable help won’t do you much good. We can help you start attributing your ad revenue effortlessly, so make sure to check out SOOMLA Traceback – Ad LTV as a Service.