There’s been an ongoing saga playing out in the Microsoft Advertising forums about revenue plummeting for Microsoft mobile ads that are being server on Windows Phones. We’ve been hesitant to report on it because it appeared to be an anomaly but it’s pretty clear at this point that the reduced ad values are here to stay.

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This chart is Elbert Perez’s eCPM. eCPM is the “effective cost per thousand impressions”. In other words, how effective are ad impressions [Earnings divided by Impressions x 1000 = eCPM]. If your eCPM drops and you’re getting the same amount of impressions that means your total earnings have gone down and that’s exactly what’s happening. See, for a short period all developers were reporting seeing an eCPM of $1 and it appeared to be a total anomaly. Since then though the eCPMs have remained far lower than they have been in the past. In fact, Elbert Perez is anticipating have lower revenue in April than in February despite having more games available now so that will give you some sense as to the actual impact. 

Microsoft is well aware of this and has stated:

Variation in ad CPM is expected behavior as the algorithm used in the Microsoft Advertising Exchange for Windows Phone 7 actively learns the performance of each ad-enabled application(s). In some cases, these are sweeping changes. The Mobile Ad Exchange takes into account many variables when determining how an ad impression is valued in real time. This can include, but is not limited to; ad unit categories, location of the device/user and active advertising campaigns.

The end result is that the eCPM has been recomputed and this appears to be the new levels that developers need to work with. Microsoft gives tips to get more focused ads but it seems like developers really need to pay attention to try to maximize returns and merely dropping ads into an app are not going to be enough with the revised figures. But of course, eCPM is based on the ads being served and there’s still a bit of a mystery to developers as to exactly what any ad is earning.

So you know, users of Google’s Adsense are not allowed to discuss eCPM but it appears that their mobile ads are serving up about the same figures as the MS ads. 

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If you’re a developer shout out and share your experiences. Any developers out there been forced to change their strategies because of these fluctuations? Anyone seeing the opposite and actually reporting a higher eCPM now?

11 COMMENTS

  1. The best way to profit from the Windows Phone Marketplace is to change $$$ upfront.

    Users on Windows Phone are not thrifty like some other platform *cough* Android *cough*.

    We rather pay for apps than to have annoying ads flashing in from of us every second.

  2. It just shows that there is no silver bullet to not working hard for your money, some people get lucky but most of us will still have to work hard to get where we want to be. That is how it should be anyway :)

  3. This does stink for devs but as Brianna mentioned, I don’t mind paying for a good application. I would rather pay two bucks than to have it be ad supported. Why do I need that screen space taken up?

  4. The ability to have an ad-based free version plus paid version should result in nice revenue. I, like many Windows Phone users, don’t mind paying for apps. I spent at least $10 a month on apps & games.

  5. @Murani Lewis: Same here, maybe even higher if there’s an xbox live game worth having or there is a ridiculous deal of the week.

    And for the record, I would pay $10 for a Satellite Radio app.

  6. […] 2011-Apr-04 So much for getting […]

  7. Before I will buy apps, I need to buy a WinMo phone.

    And there just isn’t much to pick from.

  8. We started developing apps for WP7 since the beginning of May (Last Month) and we have both Paid (with trial) and Free, and with the data on an entire month, we have seen a complete obliteration of the Paid apps. we see a ratio of over 50 to 1 favoring the Free apps with ads.

    Even if we get a good amount of downloads of our Paid apps, we still are not going to see a single penny until that app has surpassed the $200 mark.

  9. Our eCPM has dropped for most of our apps especially in the last 10 days. At the start of this month our revenue was averaging about $50 / day this has now dropped to about $17 / day. 4 of our 10 ad supported apps have eCPM under $0.30. Unfortunately it’s very difficult to make any revenue predictions based on the wildly fluctuating eCPM’s I have been getting over the last few months.

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