Why you should outsource your ad operations

Posted on July 17, 2016 by Eric

Why-you-should-outsource-your-ad

(This is a guest post from Yaniv Nizan, the CEO of SOOMLA)

I recently became aware of a new service that is available for app publishers these days. The service of ad-operations as an outsourced service. This service is relevant and important for a pretty big category of companies - publishers who earn between $10K and $200K from advertising. These companies can't justify a full time ad-operations person but can still increase ad revenue significantly by having an expert handle ad-ops for them.

What can ad-operations do for my app?

The bottom line is more revenue through optimizing on 3 fronts:

  • Negotiating with ad-networks to get commitments and configuring them
  • Increasing opt-in ratio to rewarded videos
  • Maximizing fill-rates in all GEOs

CPM commitments and special deals

If you worked a bit on the other side of the advertising industry you know that for every $1 that the publisher makes, there is at least another $1 that the ad-networks makes. Sometimes it can be even more. This means that there is usually room to increase your ad-revenue simply by negotiating better , selecting the right providers and smartly managing the mediation waterfall to keep the ad-networks from countering your wins. This also requires smart data tools to make sure you know at least as much as the ad-networks do. One example for that is SOOMLA Traceback - Ad LTV as a Service.

Increasing opt-in ratio

Another big opportunity for improvement is the opt-in ratio in rewarded video. A typical app converts 2% of its users to In-App purchases and tries to get the other 98% of users to watch ads. Typically, however, only 15% to 40% of the users opt-in to videos each day so there are still 60 to 85% of the users that don't provide any monetization to your company. Actively tracking your opt-in ratio in different segments, levels, and time periods can be complex unless you use ad-revenue tracking tool.

Maximizing fill-rates

Some apps even fail on more basic tasks like adding a proper mediation platform and enough ad-providers to reach 100% fill rate in all countries. If you still haven't made these steps you are simply leaving money on the table.

What's the bottom line

The size of the opportunity by manually handling ad-operations depends on 2 factors:

  • Your current ad revenue
  • How un-optimized you are right now

Roughly speaking, you can make 20% more on each one of the 3 opportunities mentioned above. So a total of 73% more due to compounding effect or 44% for just 2 out of the 3 (if you already optimized fill rates). This means that if you currently make $10K you could be making $7,300 or $4,400 more per month. If you are making $200K you are leaving much more - $88K/month on the 2 opportunities mentioned.

Why not hire someone full time?

The decision between hiring or outsourcing is not specific to this topic so the reasons are similar to other areas of activity:

  • Outsourcing means you are buying expertise and cross-customer benchmarks
  • A good outsourced service should be self-managed so you should be getting peace of mind, progress reports and results without having to put in too much effort
  • More flexible engagement - part time, trials, success based models and no overheads

A typical guideline is that an ad-operations person can typically manage $3M of annual ad-revenue on a full time basis. If you are not making that much you should be better off with an outsourcing service.

To recap, if your ad-revenues is between $10K and $200K the ROI on outsourcing your ad-ops is pretty high, especially if you find an agency that is willing to offer a success based model with flexible commitment.

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Yaniv Nizan is the CEO of SOOMLA, the creators of Traceback, a mobile advertising product that attributes ad revenues to individual users. You can follow him on Twitter at @y_nizan.