Appodeal’s Business Model Raises Industry Standards for App Publishers

Artyom Dogtiev | November 18, 2016

Mobile Advertising

Since Appodeal first launched in 2015, we’ve been turning the app monetization world upside down by setting new industry standards that put app publishers first, not advertisers. After all, Appodeal was truly created by app publishers FOR app publishers.

Publisher-Centric Ad Mediation Technology: Pioneered & Perfected by Appodeal

The first standard we’ve revolutionized relates to our Intelligent Ad Mediation and Ad Optimization technology. Appodeal was the first to deploy the flat waterfall (or header-bidding) modeltechnology to mediate and serve the highest earning ads per each impression in the mobile space. No longer is it necessary to order ad networks manually using the traditional waterfall model.
On top of that, we’ve launched the first (and arguably only) alternative to the increasingly outdated second-price bidding auction model, which was designed to benefit advertisers. It caps publishers’ ad earning to what the second highest advertiser bids.
Appodeal, on the other hand, automatically inserts a dynamic price floor just below the top bid, which removes the artificial revenue cap and, ultimately, increases ad revenue for publishers.

Appodeal is the first to insert a dynamic price floor just below the top bid to earn publishers’ ad revenue

Our Advanced Payout System Puts Publishers First

Beyond the core of the Appodeal product, our payout system is setting another industry standard. Traditionally, almost all ad networks and mediators pay out to publishers net-30, 60, or even 90 days after ads have been served.
Appodeal was the first to offer an advanced immediate payout option to compliment our net-30 day payout. In other words, Appodeal pays publishers what they have earned whenever they want.
Given the rapid pace in the mobile app space, we understand that for app publishers a 3-month delay in receiving the first payout could mean life or death for the app. Apps with traction need rapid re-investment to boost their momentous growth. With this understanding, we are proud to offer the most flexible payout option for publishers.
Appodeal’s Advanced Payout System Puts Publishers First

Appodeal Wins Only When Publishers Win

The third new standard Appodeal set is what this post is mainly about and is also something we have been excited to elaborate.
We often get questions about our business model, such as “What percentage revenue cut does Appodeal take?” or “How does Appodeal make money?
Traditionally, ad providers take a “revenue share” out of publishers’ ad earnings, which usually averages to 40%. Sometimes, they might even offer to negotiate a lower revenue share to keep publishers within their networks. In the end, they take a percentage of the earning regardless of how the ads performed for the publishers.
Appodeal does things differently. We earn only when publishers earn (even) more through our Intelligent Ad Optimization (see above). For example, let’s say an ad earns a publisher $5 eCPM through a traditional ad provider. However, with Appodeal, if we were able to optimize it up to $10 eCPM, we would take $1 from that. In the end, the publisher’s new earning would be $9 eCPM, a $4 increase, while Appodeal keeps $1 to continue investing in our products.
Earning Without Appodeal: $5 eCPM
Earning With Appodeal’s Bump: $10 eCPM
Appodeal Keeps: $1 eCPM
Publisher Keeps: $9 eCPM (Net $4 additional revenue)
Keep in mind that the Appodeal Bump varies per impression. For instances when we can’t boost the eCPM, Appodeal does not take any of the revenue. We only take a portion from the eCPM boost.
Whereas other ad providers take a share regardless of their performance, we at Appodeal have a built-in incentive to help publishers earn (even) more.
We call this the Appodeal Win/Win Business Model.
Appodeal’s Win/Win Business Model

This model explains how Appodeal is “free” to use. But if you consider the Appodeal Bump, publishers are in reality getting paid to use Appodeal.

What is the percentage of the portion we take from the eCPM boost? There is no set number because, as mentioned, it is calculated dynamically per impression.
Generally though, Appodeal’s portion averages to 10% of the total revenue and that is after the Appodeal Bump.
No matter which way it is looked at, our business model is superior for publishers. With Appodeal, giving up 40% of ad revenue just no longer makes any sense.

Completely Unbiased Mediation Is In Our Best Interests (And Yours!)

One last note about Appodeal is that, unlike other ad mediators, we don’t work directly with advertisers. Other ad mediators have an internal marketplace or ad network through which they work with advertisers directly and earn a majority of their revenue.
Due to this built-in incentive bias, they tend to divert ad traffic to their own internal sources, regardless of their performance for publishers.
Since it’s not in their best interest to add new ad networks to their mediation to compete with their internal marketplace, other ad mediators don’t offer as many ad networks to choose from.
In contrast, Appodeal’s business model incentivizes us to continuously add new ad networks around the world to our growing list of over 35 to help publishers monetize more around the world.
After all, Appodeal wins only when publishers win (even more!).

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