The revenue a mobile game generates from a single advertisement is not a fixed, predetermined price. Unlike a retail item with a set cost, the value of an ad impression in a mobile game is determined in real-time through a dynamic auction system. This constant bidding means the revenue generated by a single ad view can fluctuate wildly, ranging from a fraction of a penny to several cents. The industry measures earnings in aggregates, focusing on the revenue produced by thousands of ad views rather than the value of one impression. Understanding this aggregated metric and the numerous variables that influence it is the only way to accurately estimate the earning potential of a mobile game’s advertising strategy.
The Core Metric: Effective Cost Per Mille (eCPM)
Mobile game companies use a standardized metric called effective Cost Per Mille, or eCPM, to measure ad revenue. The term “Mille” is Latin for a thousand, so eCPM represents the revenue earned for every 1,000 ad impressions served within the game. Developers rely on this aggregated figure because the actual price paid for any single ad impression is the result of a rapid, real-time auction between advertisers.
The ad revenue system operates like a digital stock market, where thousands of advertisers are constantly bidding against each other for the chance to show their ad to a specific player. When a player reaches a point in the game where an ad is programmed to appear, the game sends a request to multiple ad networks, initiating an instantaneous auction. The advertiser willing to pay the highest price for that specific impression wins the bid, and their ad is displayed to the user.
An eCPM is calculated retroactively by taking the total revenue earned from ads and dividing it by the total number of impressions, then multiplying the result by 1,000. This metric is far more practical for developers than trying to track the value of individual ads. A generalized eCPM range for mobile games falls roughly between $1 and $20, but this can be significantly higher or lower based on a multitude of factors.
Key Factors Influencing Mobile Ad Revenue
The geographic location of the player is one of the most powerful determinants of a game’s eCPM rate and overall ad revenue. Advertisers are willing to pay significantly higher prices to reach users in Tier 1 markets, such as the United States, Japan, the United Kingdom, and Australia, due to the high purchasing power of those consumers. For example, rewarded video ads in the US can generate an eCPM of over $12, while the same ad format in a Tier 3 market will yield a much lower rate.
Player demographics also heavily influence advertiser bidding, with certain age groups and income levels commanding a premium price. Advertisers are more likely to spend heavily to reach players who fit a profile suggesting a higher likelihood of clicking on an ad or making a subsequent purchase.
The genre of the game itself plays a role. The audience for a mid-core strategy game, which often includes older players with disposable income, is typically more valuable to a non-gaming advertiser than the audience for a hyper-casual title. Hyper-casual games rely on a high volume of low-value impressions, while genres like Role-Playing Games (RPG) and Strategy games benefit from a high-value user base.
Revenue Differences by Ad Format
The choice of ad unit implemented within the game creates substantial differences in revenue generation and user experience. Rewarded Video Ads consistently produce the highest eCPM, often ranging from $10 to $50 per thousand impressions. This high value stems from their opt-in nature, where players choose to watch a full-screen video in exchange for an in-game reward, resulting in high engagement and completion rates.
Interstitial Ads are full-screen video or static ads that appear at natural breaks in gameplay, such as between levels. These forced-view ads typically generate eCPMs between $2 and $13. They carry the risk of disrupting the player experience and causing user frustration.
Banner Ads are small, static or animated strips usually positioned at the top or bottom of the screen. They yield the lowest revenue, with eCPMs often falling between $0.50 and $2. While banners are the least intrusive, their low visibility and low engagement mean they only provide a small, steady trickle of income.
Understanding Ad Fill Rate and Waterfalling
The actual revenue a developer receives is also governed by the operational realities of ad delivery, which include the concepts of fill rate and ad waterfalling. Fill rate is the percentage of ad requests from the game that successfully result in an ad being displayed to the user. If a game requests 1,000 ads but only 800 are successfully shown, the fill rate is 80%, meaning 200 revenue opportunities were missed.
A 100% fill rate is rarely achieved because various factors, such as a player’s lost connection, a low phone battery, or a network timeout, can prevent the ad from loading correctly. To maximize the fill rate and revenue, developers use a process called ad waterfalling or mediation, where multiple ad networks compete for the same inventory. In the traditional waterfall model, ad requests are passed sequentially to ad networks, starting with the one expected to offer the highest price based on historical data. If the first network cannot fill the request or meet the minimum price, the request “falls down” to the next network in the sequence.
Calculating Potential Ad Revenue
Developers can estimate their total daily or monthly ad revenue by synthesizing the key metrics into a practical formula. The basic equation for calculating total ad revenue is: (Total Impressions / 1,000) \ eCPM. The first step is to calculate the total number of daily impressions, which is done by multiplying the game’s Daily Active Users (DAU) by the average number of Ads Per User Per Day (APUP/D).
For instance, a game with 100,000 daily active users that shows an average of three rewarded video ads per user each day generates 300,000 daily impressions. If the blended eCPM for this game is $20, the calculation becomes (300,000 / 1,000) \ $20, which equals $6,000 in daily ad revenue. By applying the fill rate to this total, a developer can create a realistic projection of their actual earnings.