Ad mediation lets an app request ads from several ad networks to fill each slot at the best price. In a waterfall, networks are called one after another in a fixed priority order. In in-app bidding, networks bid at the same time and the highest bid wins. Bidding usually raises competition and simplifies setup, and many apps run a hybrid. Balance revenue with ad frequency so ratings stay healthy.
What ad mediation does
Mediation platforms connect your app to multiple ad networks through one SDK. For each ad opportunity, the platform decides which network serves the ad, aiming for the highest revenue.
Without mediation, you depend on a single network's demand and prices. See AdMob ad monetization for one common starting point.
How the waterfall works
In a waterfall, you rank networks and price floors in a fixed order. The first network gets the chance to fill the ad at its floor price; if it passes, the next network is called, and so on.
Waterfalls need constant manual tuning of order and floors, and a network lower in the list may have been willing to pay more than the one that won.
How in-app bidding works
In in-app bidding, networks submit bids at the same time for each impression, and the highest bid wins. This increases competition and reduces the need to manage price floors manually.
Bidding also reduces latency from calling networks one by one, which can help ads load faster.
Hybrid setups
Not every network supports bidding, so many apps run bidding networks alongside a waterfall for the rest. The mediation platform compares bids with waterfall prices.
Review regularly which networks to keep, based on their share of revenue and fill.
Choosing ad formats
Rewarded ads, where users opt in for a reward, usually perform well and annoy users less. Interstitials earn well but can frustrate users if shown too often. Banners earn less but are unobtrusive.
Place formats where they fit the user flow, not where they interrupt core tasks.
Ad frequency and user experience
Too many ads reduce retention and lead to negative reviews, which hurt conversion and rankings. Set frequency caps and avoid ads at moments of frustration.
Monitor ad-related review complaints, as covered in improve app ratings.
Combining ads with in-app purchases
Many apps earn from ads and also sell ad removal or a subscription. This lets users who dislike ads pay instead.
See in-app purchase types and how to make money from an app.
Privacy and consent
Ad revenue depends on consent and tracking rules. On iOS, App Tracking Transparency affects personalised ads; in some regions, consent management is legally required.
See ATT prompt opt-in rate and your privacy obligations in the app privacy policy guide.
Measuring ad revenue
Track average revenue per daily active user, eCPM by format and network, fill rate, and ad impressions per user. Compare against retention so revenue gains do not come from driving users away.
Test changes with controlled experiments where possible.
Common mistakes
Common mistakes include running a stale waterfall without updates, showing interstitials at app launch, ignoring consent rules, and adding networks without measuring their contribution.
Another is maximising short-term revenue at the cost of retention.
A worked example: a casual game
A casual game moves from a manually managed waterfall to in-app bidding for its main networks, keeps two waterfall networks for extra fill, and adds a rewarded ad for extra lives.
Revenue per user rises, interstitial frequency drops after a cap is set, and reviews mentioning ads decline.
App size and performance
Each ad network SDK adds to app size and can affect startup time and stability. Larger downloads lower conversion on slow networks, as explained in app size and conversion.
Keep only networks that earn their place, and monitor crash rates after adding any SDK.
Key takeaways
Use mediation with in-app bidding where possible, keep a small reviewed waterfall for other networks, favour rewarded ads, and cap interstitial frequency.
Measure ad revenue together with retention and reviews, since revenue that drives users away is not a gain.
When to remove a network
Remove networks that add little revenue but increase app size, crashes or loading time. Each SDK adds weight and potential stability issues.
Review network contribution quarterly, and test removal with a holdout group to confirm revenue impact.
Ads in kids and family apps
Apps for children have strict rules on ads and data collection on both stores. Use only certified ad networks and non-personalised ads where required.
See kids and family app ASO for the store context.
Rewarded ads design
Rewarded ads work best when the reward is useful but optional: an extra life, a hint, a bonus or temporary premium access. Explain the reward before the ad and deliver it immediately afterwards.
Place rewarded ad offers at moments where users want more, such as after losing a level, rather than as constant buttons.
Ads and app store listing
The stores show whether an app contains ads. Users who dislike ads read reviews about them, so heavy ad loads can lower conversion on the listing as well as retention.
Mention ad-free options in your description and screenshots if you sell ad removal.
How to do it, step by step
- Pick a mediation platformConnect several networks through one SDK.
- Enable bidding where availableLet networks compete per impression.
- Keep a lean waterfallOnly for networks without bidding.
- Set formats and frequency capsPrefer rewarded ads; cap interstitials.
- Measure revenue and retentionTrack ARPDAU, eCPM and churn together.
Before and after examples
Illustrative examples written for a generic app in this category, not client results. Swap in your own product, audience, and data.
Fixed waterfall untouched for a year.
Bidding plus a small reviewed waterfall.
Why it works: Competition raises prices.
Interstitial at app launch.
Rewarded ad for an optional boost.
Why it works: Opt-in ads annoy users less.
No cap.
Interstitial at most every few minutes of play.
Why it works: Caps protect retention and reviews.
Action plan
- Use mediation
- Prefer bidding
- Review waterfall networks
- Favour rewarded formats
- Cap frequency
- Measure revenue with retention
Metrics to monitor
- ARPDAU
- eCPM by network
- Fill rate
- Impressions per user
- Retention and ad-related reviews
Record the baseline, release date, audience, markets, and external changes before interpreting movement. Rankings and conversion are useful signals, but a decision is stronger when activation, retention, and business value confirm that the page attracted the right users.
Frequently asked questions
What is ad mediation?
A system that requests ads from several networks to fill each ad slot at the best price.
What is the difference between bidding and waterfall?
In a waterfall networks are called in a fixed order; in bidding they bid at the same time and the highest wins.
Is in-app bidding better?
It usually increases competition and simplifies management, so many apps adopt it, often in a hybrid setup.
Which ad format earns the most?
Interstitials and rewarded ads usually earn more than banners; rewarded ads tend to be better tolerated.
Do ads hurt app ratings?
Too many or badly placed ads can, so use frequency caps and good placement.
Should I sell ad removal?
Yes, it lets users who dislike ads pay instead and adds revenue.
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