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Why developers use interstitial ads to monetize iOS and Android apps

Sep 26,2013 by Francis Bea

AppFlood developers monetize with interstitial ads

What every ad network publisher wants to know is “What ad format will make me the most money?”

The generic answer is that there’s no one-format-fits-all solution among mobile ad networks, which is true and not to mention impossible. However without disappointing, I’ll let you in the fact that there is one type of advertising format in particular that we’ll frequently recommend to our publishers – and with very good reason. As you’ve guessed from the title, I’m talking about interstitial ads.

No, an interstitial isn’t an oversized banner ad

I’d be hard-pressed to find a mobile gaming app or general Android and iOS app that couldn’t justify an interstitial ad.

In fact, by breaking down ad format usage we’ll find that more than 58% of our publishers have an interstitial ad format integrated into their apps. The second popular choice are custom ads with 22% of our publishers opting for the format.

Whether the ad is integrated in a UX-friendly way is another matter. For example, throwing in an interstitial advertising format that suddenly pops up randomly in a social networking app wouldn’t be an ideal implementation. Interstitials must be deployed tactically or you’ll risk your users chalking your ad up to just another type of a banner ad.

appflood interstitital on app exit

The publisher might have interstitial ad formats trigger before the app closes. Yes I know banner ads and interstitials are two completely different advertising formats technically speaking, but the non-ad industry professionals within your user base won’t know the difference. And if there’s one word infamous word in advertising among users, it’s definitely “banner.”

Why should I implement interstitials?

Looking at interstitial ads closely, interstitial advertising formats actually don’t perform like banner ads. In fact we’ve found that interstitials outperform all other ad formats on AppFlood, which include app lists, panel ads, banner ads, and custom ads. Note that I’m deliberately omitting push notification ads and icon ads from the mix now that these formats are banned from Google Play.

Now are you willing to give interstitials your ear, eyes, and app?

Now if I want to make a case for interstitials, you’d expect me to pump out eCPM figures for the platform but eCPMs can be pretty misleading if you’re comparing one ad format and it’s best used to gauge the value and effectiveness of an advertiser, so we’re going to put that off to the side.

To clarify interstitials is neither the best performing ad platform eCPM-wise and neither is the worst by far. In fact you can take a guess at the format that’s at the bottom of the bucket and you’ll probably be right; yep, the banner advertising format.

Regardless of eCPMs, what ultimately matters to publishers is how much they’re earning. And without a doubt, there’s a good reason for why more than half of our publishers integrate interstitials.

If we take a look at the click-through rate of an interstitial ad, the click-through rate was a modest 5.70% during August 2013. Compare that to the highest CTR performer (excluding icon and push ads) and you’ll find that panel ads top the chart with a 12.60% CTR (August 2013). This piece of information combined with the number of advertising impressions that each format generates can give us a look at the number of clicks that each format generates. And from that, granted that the advertiser you’ve given your inventory to is running a CPC campaign, you’ll find that interstitials will still earn you far more money than other formats.

Now let’s do the math

First we’ll have to find the value of the ad impressions, and we’ll also assume that the CPC bid is $0.30. The bid price doesn’t matter, but we’ll use this price for illustration purposes.

Taking a look at our ad network, during the same month of August 2013, interstitials generated 53 times more publisher impressions than panel ads. With that in mind I’ll use 100,000 total impressions as a benchmark for simplicity sake.

Interstitial CTR = 5.70%

Interstitial Impressions = 59,975

Panel CTR = 12.60%

Panel Impressions = 1,133

CPC bid = $0.30

Since the formula for CTR is:

CTR = click / impressions

We can figure that interstitials generated 3,418 clicks while panels generated 142 clicks. Now if we figure in the CPC bid price with the equation, earnings = click x bid, we can see how much more money you would have made from impressions compared to panels.

Interstitial earnings = $1,025.40

Panel earnings = $42.60

Yep that’s a pretty significant difference.

What you’d earn with interstitials from CPC advertiser

And for your convenience we’ve compared costs of interstitials with other AppFlood ad formats, while keeping the assumptions from above.

AppFlood publisher CPC earnings

 What you’d earn with interstitials from CPI advertisers

To get a look at how Interstitials measure up to other app ad formats if you have cost per install advertisers, we’ve compared the earnings from the install rates and plugged in the numbers.

Note that the formula for install rate is as follows:

IR = installs / clicks

For these CPI calculations we’ve kept the interstitial impression benchmark at 100,000, and the CTR remains the same as the above. Because in reality the CPI bid price would be higher than the CPC bid price we’ve bumped up the CPI bid price per install to $3. Note that your bid price will vary.

appflood publisher CPI earnings

If you’re wondering where we go these numbers, you don’t need to know exactly how to calculate the CPI. We went ahead and did the math for you.

Don’t be turned off by interstitials, unless you don’t like money

The earnings are based on averages we’ve seen on AppFlood’s mobile advertising network and some variables like the hypothetical volume of interstitials, so you may actually make more or less than what we’ve calculated depending on multiple factors. The conclusion on the other hand is clear. You can see from our quick data crunching in the chart above that if you sold inventory to an advertiser who was running a CPC or CPI campaign in August your best bet - in terms of earnings and resources - interstitials would have been your best investment.

Now you know.

If you're looking around to for more information about mobile advertising formats, learn more about the difference between panel and app lists or find out how ad formats compare by click-through rates.

Francis Bea

Francis Bea is the Content Market Manager at PapayaMobile. Francis writes about the intricacies of the global mobile advertising industry and analyzes industry trends for AppFlood. He hails from the tech blogging world, where he got his start at Digital Trends, and contributed to TheNextWeb, PSFK, CNET Asia, among other tech blogs, and his reporting has been cited in numerous major publications. Francis holds B.A. in English and Art History from The University of Wisconsin-Madison.Google +