As our group was preparing our final presentation for Internet and Interactive Marketing, we still had the outstanding question to answer of “how do we make money with this app?” While in-app advertising seemed to be an easy solution, it was important to look at the potential revenue before committing to that business model.
There are a number of affiliate advertising programs for
mobile ad placement but thought it would be easiest to go straight to Google as
we’re initially planning an Android exclusive app. After signing up for an AdMob account, I quickly realized
that without having a actual app (or at least the SDK), I’d have to look
elsewhere to gauge revenue projections.
I turned to Scirra, a game developer’s construct, to see
what Admob
average pay was from their development community forum. Considering that
the ad-buyers price was dependent on the available ad-space supply, I don’t
consider this highly scientific but rather a general ballpark estimate. The
developers on the forum were generating about $2 CPM.
If we wanted to recoup our full budget of $200,000, we’d
need to generate 100,000,000 impressions. AdMob lets you adjust the frequency
of the ads so let’s assume we rotate the ads every 60 seconds and that the
average user is on the app for 10 minutes each day of use (100,000,000/10=10,000,000).
If we’re aiming to recover our initial
investment in the first 2 years of launch, we’d need (10,000,000/(365*2)=13699)
almost 14,000 users/day on average!
While we haven’t ruled out syndicated ads, this quick
analysis was enough for us to develop alternative revenue streams and not count
exclusively on revenue from AdMob.