How much do video ads pay on AdMob?
A lot less than you think. Your ad will be displayed on an individual's phone screen for a total of 3-10 seconds, but only while that individual is stopped or parked. Given the way people drive these days and how much time they spend looking at their screens,
Your ad will be seen for about 10 seconds if the person is moving slow, meaning below 25 mph. But we'll assume that he drives fast because who doesn't love to go fast? If the driver goes 65 mph, then your ad will be seen for about 1 second.
The average cost per thousand impressions (CPM) on AdMob should never exceed $2 according to economic studies, which have shown that there are diminishing returns for ad costs over $2.
For example, if you bid $0.50 per click and your conversion rate from click to sale is 5%, then you have a total of 40 clicks on average (5% of 1000). At that price point, you can count on earning at least $20-$25. Even bidding less than half a dollar per click will return the same results. That's because we're using only CPC (cost-per-click) ads, not CPM (cost-per-impression), which is what Facebook does. As much as Facebook would like you to believe it's true, users don't spend all day online looking at ads when they aren't expecting them or necessarily interested in buying what's being advertised to them.
AdMob uses the latest in network technology and has a built-in detection system that prevents ads from ever loading on top of an app when a user is actively using it. This means even if they do see your ad, they are not paying attention to it or otherwise distracted by their use of your app, which increases your conversion rate.
Your ad will only show up when a driver is parked for more than 5 seconds at 50 mph or below. People don't just drive straight through all day long without stopping at traffic lights and other roadblocks along the way, so we'll assume that there are 10 "pauses" per hour while moving for greater than 5 seconds at less than 50 mph. During that time, your ad has a better chance of getting noticed because users are more likely to be paying attention to their phone or having an idle moment during the drive.
What if they're not using their phone? AdMob's technology is smart enough to know when someone fully exits out of an app and never uses it again for an hour after it happens. It also knows when new apps (new games) have been opened up so that you aren't billed for ads in apps people haven't used in a while. This prevents you from overpaying for ads and under-delivering, as well as increasing the amount of money you'll make over time.
Assuming all ten pauses were at 50 mph or below, then that means your ad will get seen almost immediately, within 1-2 seconds. That's because ads are detected and shown as soon as the person stops (starts going less than 50 mph).
Example: $0.50 CPC bids x 1000 impressions x 10 pauses = 500 clicks on average per day at $0.15 per click = $75-$100 in revenue per day for driving just 5 hours a day!
That's over $15,000 gross income in one month from only 5 hours of driving each week for a total of 2 weeks out of the month. Also, remember that this is net profit after you pay your taxes if you're an independent contractor and remove all business costs such as gas, car maintenance, etc. So you can easily earn $27,000 a month or $315,000 a year from just 5 hours of driving per week.
The amount you will make depends on how useful the app is and how competitive it is in the market. That's because your conversion rate from click to sale depends not only on your ad's copy but also on the product itself. If your app isn't getting any clicks, then clearly, the problem isn't with AdMob's technology but rather with your ad or the product behind it. In that case, we recommend list-building via Facebook ads (which you can read about in our other post) until you improve conversions through word of mouth.
But if you do get lots of clicks and people are buying, then you'll see a conversion rate of anywhere from 4%-9% (depending on the app's competitiveness and how CTR is for that ad). At 9%, then your $75-$100 will turn into $600-$900 per day.
If you're an independent contractor or run a company, then AdMob traffic is great to fill up any extra time in between jobs. For example, if you have two customers that each gives you 20 hours of work but only 10 hours per week are steady enough to count on, then use Admob to fill up the other 10 hours with guaranteed income every single day no matter what happens.
Just remember this: while Facebook ads can be good at building list size for email marketing purposes or as a marketing tool to gain attention before you launch, they are terrible for getting real customers to buy and use your app. The only AdMob has the technology that can do both at once.
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