How to Soft launch a mobile game: Ad mon perspective

Mobile gaming advertising spend is forecasted to grow to $130 Billion a year by 2025. This represents a 306% increase from 2020. These enormous numbers have created a new stream of revenue to go alongside IAP revenue for mobile games. Adding ads into your mobile game can be tricky. This blog post is meant to serve as a guide for how to think about ad monetization during soft and global launches of your game.

First things first ask yourself do you want ads to make up a portion of your game’s revenue? If you think of the mobile gaming spectrum as a linear graph with hypercasual on one end and hardcrore on the other. The extremes of the spectrum never change and always make 97+% of their revenue from either IAP or Ads. If you’re doing a game that heavily monetizes with IAP ads are usually a bad idea as it creates an easy exit avenue for your high LTV users. Note that this article is aimed at non-hypercasual games as their ad monetization mechanics are different.

First things first ask yourself do you want ads to make up a portion of your game’s revenue? If you think of the mobile gaming spectrum as a linear graph with hypercasual on one end and hardcrore on the other. The extremes of the spectrum never change and always make 97+% of their revenue from either IAP or Ads. If you’re doing a game that heavily monetizes with IAP ads are usually a bad idea as it creates an easy exit avenue for your high LTV users. Note that this article is aimed at non-hypercasual games as their ad monetization mechanics are different.

If the answer is yes you want ad revenue, then rewarded ads is where you should start. It’s safe to say that Rewarded Ads are the undisputed monetization king of ad formats. Here’s Why:

  • Highest eCPM compared to other formats
  • Highest completion rates
  • Lowest amount of friction from users
  • If implemented right do not cannibalize IAPs
  • Large competition on this inventory format from ad networks

In order to maximize your ad revenue you need to keep in mind that

Ad Revenue = Fill (impressions) * eCPM

Your soft launch ad effort should be spent on maximizing your impressions while during your global launch that effort should shift to increasing eCPM.

Your North Star Ad Metric During Soft Launch

While soft launching your game the north star metric you’re aiming for is Impressions/DAU (Imp/DAU). In order for your ads to have a significant impact on the magic number you need to exceed or hit is 5 imp/DAU. With a proper mediation setup here’s what you can expect in terms of bottom line:

  • 5 Imp/DAU – $0.06 – 0.08 AdARPDAU
  • 6 Imp/DAU – $0.08 – 0.11 AdARPDAU
  • 7 imp/DAU – $0.12 – 0.14 AdARPDAU
  • 8 imp/DAU – $0.15 – 0.20+ AdARPDAU

*The main caveat here is that I’ve seen some games reach as high as $0.23-0.52 AdARPDAU with just 5 Imp/DAU as their inventory converts super well with advertisers.

The AdARPDAU amounts might not look that big but if you retain a user for 10 days and they watch 7 impressions a day, ads will have added $1.2-1.14 to their LTV. Most mobile games today are built with Unity which makes your job as a game developer a bit easier from an ad monetization perspective. To make things easier during soft launch I recommend to use just Unity ads which will give you an easy way to measure your Imp/DAU during soft launch. Once you’ve maximized the Imp/DAU that’s when you’ll need to add a mediation platform.

Global Launch – A new North Star Ad Metric

Congratulations you’ve finished soft launching your game. Your North Star ad metric is no longer Imp/DAU but should now shift to AdARPDAU. In order to maximize your AdARPDAU you will need to add a mediation partner. A mediation partner allows you to create competition for your ad inventory which drives up the cost for your inventory. A good rule of thumb here is that adding a mediation with just two networks will increase your ad revenue by 100% compared to having just one network partner. Currently the mediation space is a duopoly where you’ll get the highest AdAPRDAU by using either Applovin or ironSource. I’d recommend speaking to both companies to see which one will work best for you.

Once you’ve implemented a mediation platform you also need to add a few ad networks to ensure healthy competition for your inventory. These networks will be more than enough until your game starts to make $2k/day in Ad revenue and give you good coverage on both iOS and Android.

  • Facebook
  • Admob
  • Unity
  • ironSource
  • Applovin
Setting Up Your Mediation

When launching a new game I’d recommend starting with the following setups.

After first setting up I’d recommend leaving these for 8-10 days and then come back to make optimizations. When making optimizations what you should look at are the placements fill rates. The rule here is that if a placement fills at a higher level that 1% you can create a new placement with a higher price floor. In the end all “Ad optimizations” is you creating AB tests with higher placements or removing low fill placements.

Good things to know

Waterfall Latency – The auction for your impressions from bid request to impression has to take less than 300 milliseconds. If you have too many placements in your waterfall this will cause the mediation platform to skip over some placements. This is what is known as “Latency” and you want to avoid this as it loses you money. On Applovin they advise you not to have more than 42 placements per waterfall. Ironsource the latency limit is around 52.

How is eCPM Calculated – eCPM is calculated by ad networks using a form of this formula CTR*IR*CPI*1000=eCPM. The CTR, IR and CPI data is taken from the last 7 days.

First Impressions Matter – Most networks run their bidding models on a recency model. This means that the first impression a user is shown during a gaming session is worth more than the subsequent ones. The assumption here is that users pay more attention to the first impression compared to the 10th impression. You start seeing a drop off in price after the 5th impression per session.

How ad networks make money – Ad networks make money by taking a cut on the ads they show in your game. Generally, the split is 70% to the publisher and 30% to the network. You as a publisher have no way of checking on the network’s cut so adding numerous networks ensures they have to keep their cut to 30% to stay competitive.

First things first ask yourself do you want ads to make up a portion of your game’s revenue? If you think of the mobile gaming spectrum as a linear graph with hypercasual on one end and hardcrore on the other. The extremes of the spectrum never change and always make 97+% of their revenue from either IAP or Ads. If you’re doing a game that heavily monetizes with IAP ads are usually a bad idea as it creates an easy exit avenue for your high LTV users. Note that this article is aimed at non-hypercasual games as their ad monetization mechanics are different.

First things first ask yourself do you want ads to make up a portion of your game’s revenue? If you think of the mobile gaming spectrum as a linear graph with hypercasual on one end and hardcrore on the other. The extremes of the spectrum never change and always make 97+% of their revenue from either IAP or Ads. If you’re doing a game that heavily monetizes with IAP ads are usually a bad idea as it creates an easy exit avenue for your high LTV users. Note that this article is aimed at non-hypercasual games as their ad monetization mechanics are different.

If the answer is yes you want ad revenue, then rewarded ads is where you should start. It’s safe to say that Rewarded Ads are the undisputed monetization king of ad formats. Here’s Why:

  • Highest eCPM compared to other formats
  • Highest completion rates
  • Lowest amount of friction from users
  • If implemented right do not cannibalize IAPs
  • Large competition on this inventory format from ad networks

In order to maximize your ad revenue you need to keep in mind that

Ad Revenue = Fill (impressions) * eCPM

Your soft launch ad effort should be spent on maximizing your impressions while during your global launch that effort should shift to increasing eCPM.

Your North Star Ad Metric During Soft Launch

While soft launching your game the north star metric you’re aiming for is Impressions/DAU (Imp/DAU). In order for your ads to have a significant impact on the magic number you need to exceed or hit is 5 imp/DAU. With a proper mediation setup here’s what you can expect in terms of bottom line:

  • 5 Imp/DAU – $0.06 – 0.08 AdARPDAU
  • 6 Imp/DAU – $0.08 – 0.11 AdARPDAU
  • 7 imp/DAU – $0.12 – 0.14 AdARPDAU
  • 8 imp/DAU – $0.15 – 0.20+ AdARPDAU

*The main caveat here is that I’ve seen some games reach as high as $0.23-0.52 AdARPDAU with just 5 Imp/DAU as their inventory converts super well with advertisers.

The AdARPDAU amounts might not look that big but if you retain a user for 10 days and they watch 7 impressions a day, ads will have added $1.2-1.14 to their LTV. Most mobile games today are built with Unity which makes your job as a game developer a bit easier from an ad monetization perspective. To make things easier during soft launch I recommend to use just Unity ads which will give you an easy way to measure your Imp/DAU during soft launch. Once you’ve maximized the Imp/DAU that’s when you’ll need to add a mediation platform.

Global Launch – A new North Star Ad Metric

Congratulations you’ve finished soft launching your game. Your North Star ad metric is no longer Imp/DAU but should now shift to AdARPDAU. In order to maximize your AdARPDAU you will need to add a mediation partner. A mediation partner allows you to create competition for your ad inventory which drives up the cost for your inventory. A good rule of thumb here is that adding a mediation with just two networks will increase your ad revenue by 100% compared to having just one network partner. Currently the mediation space is a duopoly where you’ll get the highest AdAPRDAU by using either Applovin or ironSource. I’d recommend speaking to both companies to see which one will work best for you.

Once you’ve implemented a mediation platform you also need to add a few ad networks to ensure healthy competition for your inventory. These networks will be more than enough until your game starts to make $2k/day in Ad revenue and give you good coverage on both iOS and Android.

  • Facebook
  • Admob
  • Unity
  • ironSource
  • Applovin
Setting Up Your Mediation

When launching a new game I’d recommend starting with the following setups.

After first setting up I’d recommend leaving these for 8-10 days and then come back to make optimizations. When making optimizations what you should look at are the placements fill rates. The rule here is that if a placement fills at a higher level that 1% you can create a new placement with a higher price floor. In the end all “Ad optimizations” is you creating AB tests with higher placements or removing low fill placements.

Good things to know

Waterfall Latency – The auction for your impressions from bid request to impression has to take less than 300 milliseconds. If you have too many placements in your waterfall this will cause the mediation platform to skip over some placements. This is what is known as “Latency” and you want to avoid this as it loses you money. On Applovin they advise you not to have more than 42 placements per waterfall. Ironsource the latency limit is around 52.

How is eCPM Calculated – eCPM is calculated by ad networks using a form of this formula CTR*IR*CPI*1000=eCPM. The CTR, IR and CPI data is taken from the last 7 days.

First Impressions Matter – Most networks run their bidding models on a recency model. This means that the first impression a user is shown during a gaming session is worth more than the subsequent ones. The assumption here is that users pay more attention to the first impression compared to the 10th impression. You start seeing a drop off in price after the 5th impression per session.

How ad networks make money – Ad networks make money by taking a cut on the ads they show in your game. Generally, the split is 70% to the publisher and 30% to the network. You as a publisher have no way of checking on the network’s cut so adding numerous networks ensures they have to keep their cut to 30% to stay competitive.

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