Ad Revenue For Windows 8 Apps Collapses

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 Ad Revenue For Windows 8 Apps Collapses
Thursday, 02 May 2013

Something has happened to in-app advertising from Microsoft's pubCenter and both developers and advertisers are complaining.

Many app developers have come to rely on advertising revenue to provide an income or at least fund the ongoing costs of making an ad available. Windows 8 and Windows Phone 8 developers had been doing quite well with advertising income - until the supply of adverts suddenly dried up at the beginning of April.

The reason for the sudden drop was that until the end of March,  when its Bing ad campaign came to an end, Microsoft itself had been the primary buyer. So even though the Bing ads had a low eCPM (the rate paid per 1,000 impressions) it did at least mean that most apps did get their ad unit filled.

A thread "No ads anymore?" that started on April 2 on the bing Ads community forum with the question "Is there a problem" has had 79 replies - mostly from devs experiencing the same problem of near to zero fill rates and very low eCPM for any ads that were served.

The thread also revealed part of the problem. Some of the developers would also like to be advertisers but could not afford to do so:

...barrier to entry to advertise on the Windows 8 platform is too high. I tried to advertise some of my Windows 8 apps through the system, because it was the perfect target audience (people with Windows 8 that already use Store apps), but Bing wants a $5,000 minimum investment per month. I was willing to spend$500 but $5K was way too much. A couple of days later it transpired the barrier was even higher with pubCenter responding to an inquiry with: Unfortunately we are unable to support anything less than$25,000 per month for display campaigns.

The problem for Windows 8 app developers is that so far Microsoft pubCenter is the only source of potential revenue and as Windows 8 is not being successful there's no incentive for other ad-serving agencies to include it as a platform.

Any developer not realizing that Microsoft was essentially subsidising their app might have made plans based on current ad income. It seems reasonable to suppose that advertising revenue will not vary too much as it is an average of many different advertisers. However, if most of the ads are being purchases by one client, i.e. Microsoft, this makes the situation much more volatile.

There probably isn't much that can be done in this case but it does serve as a warning. You not only need to ask what the average advertising income is, but how varied the portfolio is.

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