Last week Google announced the beta version of Adsense for mobile applications. With this new service, developers will be able to better monetize their applications and games. What's more, the revenue generated should be enough to encourage developers into spending more time on their Android projects.
In order to qualify for the beta service, a developer's application must generate 100,000 impressions per day. The developers generate revenue based on the number of people who click on an advertisement they display. The click-through rate, or CTR, is often higher on mobile ad units because they are highly targeted toward their audience.
The other important metric in determining payout is CPM, or cost per thousand impressions. Desktop websites can have a CPM as high as $3 since publishers are allowed to display three units on one page. But for mobile ad units, you're only allowed to display a single ad at a time. Ads are displayed at the bottom of the screen in the game menus, and are not visible during gameplay.
Since the service has yet to fully launch, it's hard to determine what rate the developers can expect to earn from their impressions. For example, a CPM of $1 on 100,000 impressions would result in a profit of $100 a day or roughly $3,000 a month. That's a nice bonus for the developer in exchange for placing a few lines of code in their application.
Adsense will be a direct competitor for Admob. Google has a large Adwords customer base, and I expect they will be able to move these ad sales. It will be interesting to see how the rates compare between the two services, though it is my experience with Adsense that they pay pretty well versus the competition.
Cestos from Chicken Brick Studios is an example of an Android game that is trying the mobile ad unit revenue model. Downloads for the free game range from 10,000 to 50,000. In comparison, many of the best selling Android games fail to pass 10,000 downloads.
As one of the first multiplayer titles, Cestos has become wildly popular among Android gamers. Included with the game are many community features such as buddy lists, chat rooms, private messaging, and player rankings. Using the game lobby, it only takes a few clicks to invite your friends into a quick challenge match.
Each match lasts only a few minutes or sometimes even seconds, so it is easy to play 10 games in a row. At the end of each game, you are returned to the main menu that display ads. By increasing their player community and encouraging more play time, they will continue to grow their impressions each month.
Since sales of a static game eventually stall in sales a developer will need to update their game with new content and features to attract new players and retain current customers. Chicken Brick has responded by adding new maps, support for soft keyboards, and a feats system to unlock extras that is similar to Xbox achievements.
The game is an absolute blast, and I hope that Adsense succeeds so developers like Chicken Brick can justify offering some titles for free. In the end, though, it all comes down to the advertisers and what they are willing to spend. I have yet to discover any Android app that has generated a high income--we'll have to wait and see if Adsense will have the first success story.