There are quite a few publishers in the mobile advertising industry that are hesitant when it comes to adopting revenue share as a business model. Preconceived notions of safety and control have led them to believe that a fixed CPM rate is their best option.
This raises a valid question: How can you work with the revenue share model and still maximize your long-term revenue?
The ideal flow for publishers to maximize their revenue is mapped out below:
Testing > Analyzing > Optimizing >Higher revenues
The first step is to properly test all the performance campaigns on the network. Mobile networks manage and run hundreds of campaigns simultaneously, and each of them has its own specific requirements and goals. For a publisher to reach high revenues, it is crucial to be exposed to as many campaigns as possible in order to find the right match. This means that the publisher needs to be flexible with the pricing model from the get go.
The second step occurs once hundreds of campaigns have had the chance to “taste” & test the traffic. At this point it becomes easier to analyze, learn, and get a stronger indication of the publisher’s traffic. These indications are precisely what the advertisers are looking for, and are the key to enlarge their budgets on the publisher’s inventory.
Afterwards, good-performing publishers are identified, and they become imperative for the advertisers growth. They will look for ways to increase the traffic. Many publishers view the optimization process as another way to minimize profits, but in the long term it will actually maximize their revenues.
Finally, once a great match is found the revenue will be higher when compared to the fixed CPM model.
Rev Share VS CPM Revenues – Long Run Perspective
So what’s stopping many publishers from doing this? They are afraid of risking their traffic with low-rated campaigns. Fixed rates, on the other hand, gives them a feeling of safety and control, even though this feeling may only be an illusion.
My suggestion for mobile publishers in the performance field is not to focus on fixed rates. That is because this method automatically excludes many potentially well-matched campaigns, and the real potential of the revenue is thus cut in about half.
If safety and control are what a publisher is looking for, than adopting a long term point of view is vital. A dedicated account manager who optimizes the traffic, and works closely with the publisher, will prove to be a great advantage. This advantage may even provide for higher control than expected.
Additionally, relatively rough beginnings, with respect to the results, might be misleading. We have to remember that the first days are initially only for analyzing and optimizing.
So in conclusion, risking the first days in order to gain a long-running partnership, with consistent positive trends of revenues, is definitely a great value for a small risk.
“If you don’t risk anything, you risk even more”.
Roni Namdar is Mobile Media Buying Team Leader At dmg