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Developer Earns Nearly $1,400 in One Day With iAds

Thursday July 8, 2010 10:41 am PDT by Eric Slivka

App Store developer Jason Ting has released data on iAd revenue from the first day of sales for a "utility app" that was released just yesterday, clocking in nearly $1,400 in revenue on an astounding "eCPM" of nearly $150. The data appears to be from Ting's LED Light for iPhone 4 Free, which was part of a series of apps approved by Apple yesterday that can control the iPhone 4's LED camera flash on the rear of the device for use as a flashlight. Ting's application is available in both a paid version and the iAd-supported version for which he has provided data.

CPM, which stands for "cost per mille" ("mille" = "thousand" in Latin), is a commonly-used metric in advertising used to benchmark the relative cost of ads per thousand "impressions", or times the ad is loaded. While some web-based advertising is sold simply on a CPM basis, the term "Effective CPM" (eCPM) is a modified metric which takes into account the usage of tiered ad rates that include certain rates for simply showing the ad and then additional payments for users engaging the ads in some way, from simply clicking on ads to learn more to filling out personal requests for more information to actually making purchases. In essence, eCPM is simply the total revenue obtained from an advertising campaign through its various payment schemes per 1000 ad impressions.

While eCPM is highly variable based on platforms, site demographics, ad implementations and services used, an eCPM of $150 is in the neighborhood of an order of magnitude or even much more above typical solid ad performance. The strong performance comes from a premium initial base CPM of $10 for the iAd platform, with an additional $2 charged per click-through by users and 60% of the total revenue is passed along to developers. Consequently, it appears that an extremely high click-through rate of nearly 12% is the primary driver of the high eCPM for this developer's iAd implementation.

A fill rate of only about 35% also suggests that there is plenty of room for expansion of the iAd platform. It is unclear, however, exactly what the reason is for the relatively low fill rate, and it is possible that there simply aren't enough advertisers in the program at the moment to deliver the volume of ads being requested based on application usage.

Despite the strong initial performance, it is somewhat doubtful that developers will be able to sustain Ting's level of performance, as he is benefitting not only from the high-profile launch of the initial wave of iPhone 4 flashlight applications but also from the novelty of the iAd program. While the interactive experience of the iAd platform is certainly likely to result in higher click-through activity from users over the long-term, the novelty of the program, which just launched last week, is likely driving more users than might otherwise be expected to test out the ads.

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