There have been questions as to whether iPhone developers can make significant revenue from ads on the iPhone, mainly because the supply of advertisers can’t keep up with the demand for iPhone apps. Others say that developers actually can make quite a bit from ads on free apps. Mobile game advertising network Greystripe is in that camp and it is launching a new CPM Protection Program designed to guarantee ad revenue to iPhone app developers.
Greystripe says that the various mobile ad networks, including competitor AdMob, are undercutting each others’ CPMs (cost per thousand impressions) when competing for advertising dollars, thus leaving iPhone app developers with lower CPMs overall. Greystripe’s CPM Protection Program offers to beat any other ad networks’ eCPM by at least 25% for 60 days.
Greystripe claims that their rates are higher because of their rich media ad formats that use a Flash ad format, giving advertisers more creative options when it comes to developing interactive ads. Another explanation for Greystripe’s higher CPMs is that they are trying to buy market share.
Greystripe’s eCPMs come in at around $1.50 to $2.00, which the company says is higher than the average CPM delivered by other networks. In a guest post written by an iPhone developer on TechCrunch, the developer reported CPMs of $0.23 with ads powered by AdMob. But this data is anecdotal and based on one developer’s circumstance. I find it hard to imagine that the CPM of $0.23 is an average for AdMob. We contacted AdMob to see what their average eCPMs are and they fall into a similar range as Greystripe’s: $1.00-2.00.
It’s clear that Greystripe is trying to provide an incentive for developers who are using other ad networks to switch over (the program requires that developers have used another ad network). But the issue with switching ad networks is that developers have to change the code of ads and then reapply in the App Store, which we all know can be a hassle. Also, while Greystripe promises to lock in ad rates for developers for 60 days, it’s unclear what happens following that time period to rates. Once the 60 days are up, eCPMs could fall dramatically.
It’s definitely interesting to see Greystripe’s approach to competing against mobile ad platforms like AdMob, Videoegg and others. Widely popular and well-funded AdMob is a formidable competitor in the space.