Ad Monetization 7 min read  - October 20, 2022

In-App Bidding for Mobile Studios: the most efficient way to increase your ARPDAU & Revenue.

Triple-A & mid-size studios are sky-rocketing their revenues this 2023 thanks to In-App Bidding. Learn the Why's behind its sucess & What comes next for this revolutionary model!

Triple-A & mid-size studios are sky-rocketing their revenues this 2022 thanks to In-App Bidding. 

We're just a few months away from 2023. Still, the industry has gathered enough data from publishers and app developers to conclude that In-App Bidding is the most efficient way to monetize mobile apps & games. 

Advertisers now have a broader inventory, making it easier to attribute ad spending. And, despite new regulations & laws on data privacy, users still appreciate better-targeted, relevant ads. 

However, the global adoption of App-bidding is still ongoing as many mobile studios & app developers are unaware of its benefits.

Table of contents:

In-App Bidding VS Waterfall Setup: differences explained

Let’s admit it. The waterfall setup was an industry standard for years until In-app bidding came and replaced it. 

Although the ad waterfall model was a revolutionary concept back then, nowadays we must say it is pretty outdated. Ad waterfall still can hold its ground, but there are better options that adapt to the latest industry's needs. 

The waterfall monetization model delivers ads from networks based on their historical eCPMs. Essentially, an advertiser will first try to sell inventory directly, but if they can't, they will pass the impression to premium ad networks.

The inventory will fall as a waterfall. Whenever an ad impression becomes available, the publisher’s mediation platform would call demand sources one at a time according to the historical price. 

This process creates an ad setup prone to mistakes and lost revenue. The winning network’s payout isn’t necessarily the highest available among all integrated ad providers. 

Waterfall bidding

Contrary to the traditional waterfall standard, In-App bidding allows all demand partners to bid simultaneously, letting the highest bidder take the win and the publisher maximize revenue for every impression. 

In-App bidding brings major benefits for every agent involved in the ad exchange process: the game studio, the advertiser, and the mediator.

Extra: If you want to know more about all the benefits of in-app bidding, we highly recommend you to read our other article, “Benefits of In-App Bidding”.

Top features of In-App Bidding

Now that you know the main differences between the ad waterfall and the in-app bidding model, let’s look at some of its main features. 

Differences between in-app bidding and waterfall bidding

Increased demand

In-app bidding increases demand ad inventory as more sources bid on a real-time auction. 

In other words, more competition among advertisers. And as demand rises, your metrics (such as CPM & ARPDAU) improve too.

Increased fill rates

In the mobile ad-tech business, the priority is to send as many ad impressions as possible. However, with the waterfall model, not all ad networks get a chance to fill in an ad space because of their historical data and inability to meet the set price floor.

With in-App Bidding, there are fewer chances of leaving good-quality ad impressions behind. As In-App bidding creates a real-time auction among all the ad networks, the publisher ensures more bids for each ad impression.

Full transparency

In-App advertisers need a clear understanding of their current and future possibilities.  

The waterfall model is quite variable, making it hard for mobile studios to estimate, predict, and scale their user reach. 

With In-App Bidding, however, all demand sources are treated as equal. This allows:

  • A fair bidding space for every source 
  • While giving advertisers higher visibility of the available inventory & audiences.

A transparent environment empowers App studios and lets them make more informed and data-proven decisions. 

Reduced latency & better UX for users

Latency can be a big turn-off for app users. And sometimes, exiting the app becomes the only option for users when a rewarded video doesn't load quickly. 

In-App bidding brings to the table fewer steps in the ad-serving process. Ads load faster, allowing users to enjoy a seamless and unique experience. 

Improved efficiency

Generally speaking, waterfall bidding requires more maintenance compared with In-App Bidding. 

Monetization managers spend hours and energy optimizing their waterfalls based on their current reports. Automatization has indeed improved a lot in the last few years. 

Smart algorithms have eased the pain of this tedious process, but game studios still have to do manual tasks in some scenarios.

In-App Bidding is entirely automated. Studios now have more time to focus on developing other areas of the monetization strategy, instead of setting up ad waterfalls.

The success of In-App Bidding so far

Without proof, we would never write a blog about the benefits of In-App Bidding. So let’s move to another topic that matters even more: metrics & success stories of In-App Bidding. 

Since 2018, Appodeal has been pushing forward the In-App Bidding technology. While the rest of the ad-tech industry focused on waterfalls, we were pioneers in In-App Bidding and started testing and experimenting with our partners. 

Back in the day, and only after eight months of experiments, the participating app’s ARPDAU demonstrated a 30% increase, and its eCPM also increased by 17%. 

We kept making improvements, setting up In-App Bidding in other games. For example, we integrated Appodeal’s ad mediation SDK with In-App Bidding enabled to give WordBakers access to over 70 top ad networks and DSPs. Our team could fine-tune the monetization setups that led to ARPU increasing by 20% in a month

And that is just the tip of the iceberg. 

But as we always say, it’s better to try for yourself.

Mobile Studios are increasing their revenues with in-app bidding over waterfall bidding

With Appodeal, you can integrate In-App Bidding networks seamlessly into your monetization setup. You have plenty of options, and we’re working to integrate even more so your monetization strategy adapts to you, instead of adapting to the ad provider’s requirements.

You will find plenty of resources in our Appodeal Help Center & in our FAQ.

So… are Ad Waterfalls still viable?

There’s no one-size-fits-all answer to this question. 

Despite its numerous flaws, the ad waterfall model is still a viable option in 2022. 

Many ad networks have already transitioned from the waterfall model to In-App Bidding. Appodeal support most of them, so we know that firsthand. However, some may need more time (technologically speaking) to finally transition from one model to another. 

You may want to experiment with In-App header Bidding but still don’t feel ready to move from the ad waterfall model. With Appodeal, you can use a Hybrid format. This way, you will use both In-App Bidding and Waterfall setups to elevate even more ad revenue for mid-size studios.

In Appodeal's Hybrid Monetization model, every time a user requests an ad impression, we run a quick check in both models simultaneously to see if higher-earning ads are available outside of the In-App Bidding auction. 

This way, the ad request goes out through Appodeal’s server simultaneously to the In-App Bidding ad networks and determines the auction's winner.

So the whole process would look like this:

  1. The user requests an Ad Impression (on your mobile app). 
  2. The request first goes through the process of In-App Bidding.
  3. The server determines the auction winner (the highest eCPM available)
  4. At the same time,  your request goes out through Appodeal’s server to quickly see if there’s a better offer (higher eCPM) available outside of the bidding auction and within the waterfall model. 
    1. If your ad waterfall does not have an Ad Network with a higher eCPM than the winner of the “In-App Bidding auction”, then the impression is attributed to the In-App Bidding network. 
    2. However, if your ad waterfall setup has an ad network with higher eCPMs than the auction's winner, the ads from the waterfall will run first instead. 

This solution allows you to get the best out of both worlds. 

With a Hybrid monetization setup, you achieve the highest revenue available regardless of where the winning ad comes from. 

Any app can benefit from a hybrid approach to monetization.

Still, In-App Bidding is especially popular among mobile gaming apps with In-App Purchases options + In-App ads, as they usually prioritize more non-disruptive UX (User eXperiences)

In-App bidding Mid-2022, where are we at?

So the question is no longer if mid-size mobile studios should integrate in-app bidding but how to seamlessly integrate it. 

It’s time to take advantage of all its benefits, expand your “monetizable” audience, and stop restricting yourself by using outdated ad monetization models.

To effectively achieve a better optimized In-App ad strategy, we recommend that you slowly transition from the waterfall model to the hybrid format.

As stated by Kamil Nasroullaev, Head of Advertising Network at myTarget:

(...)latest test results show that using a hybrid monetization model - both bidding + waterfall - brings more income. Each publisher needs to test different models and determine the best option for their applications to increase their ad monetization revenue consistently.”

Mobile apps & games that rely solely on In-App purchases or paid downloads are missing significant revenue. In-App Bidding revolutionized the mobile advertising industry, bringing more fairness to the auctions and better efficiency of processes. 

A hybrid ad monetization model will empower you to maximize revenue by:

  • Unlocking the monetization potential of most of your users, 
  • creating a large user base with more diverse segments, 
  • and increasing the overall retention rate & engagement rate.

But again, it’s up to you to stay competitive in the coming times. At Appodeal, we will always help you to adapt your current monetization strategy, and turn your apps into top-earning hits!

In-App Ad eCPM Performance Index 2022

Want to keep up with other trends that are already shaping the performance of mobile ads & monetization strategies?

In our 'In-App Ad Performance Index 2022' report, we analyze data from 6 different regions, 3 Ad formats, +70 ad demand sources, and +100.000 Apps in 12 months to break down a comprehensive analysis that will help you optimize you supercharge your mobile advertising based on Region, Format, and Ad Demand sources. 

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