What is AdMob and how does it make money?
AdMob is the Google tool that lets you earn revenue by showing ads in your mobile app. It opens the ad slots you place in your app to advertisers and calculates your revenue per thousand impressions. It is free to use and Google takes a share of the revenue.
There are two sides in advertising. The advertiser spends money, the publisher earns it. AdMob puts you on the second side: your app offers ad space and you get paid for it.
This is the most common revenue model for developers who distribute their app for free. Instead of asking the user for money, you earn from the ads the user sees.
How it works
You add AdMob's code library to your app and define what kind of ad appears on which screen. When the user reaches that screen, AdMob picks and shows the highest paying ad available at that moment, in real time.
That selection is automatic. You do not decide which ad appears, you only decide the ad's type, its placement and category restrictions.
Ad formats
The choice of format affects revenue more than it affects user experience, and the wrong choice can get the app abandoned.
Format | How it appears | Where it fits |
|---|---|---|
Banner | A thin strip at the bottom or top of the screen | Screens that stay open continuously |
Interstitial | Full screen, dismissible | Between sections or levels |
Rewarded video | The user chooses to watch and gains something in return | In-game rewards, extra lives |
Native ad | Embedded in the app's own design | Content feeds |
App open | Briefly while the app is launching | The launch screen |
How revenue is calculated
Revenue is calculated per thousand impressions rather than per click, and that value is called eCPM. The rough formula is this: divide the number of impressions by a thousand and multiply the result by the eCPM.
eCPM is not fixed. It varies with the country the user is in, the ad format, the app's category and the season. The same app can produce several times more or less revenue when its user geography changes.
This is why "how much does AdMob pay" has no single answer. What determines earnings is not how many users you have but where they are and how long they stay in the app.
What you need to start
Register at admob.google.com with your Google account
Add your app, it matches directly if it is already live in the store
Create an ad unit for each format you want to show
Integrate the code library into your app and try it with test IDs
Fill in your tax and payment details completely
Go live and watch the fill rate in the first few days
Always use test ad IDs during development. Clicking your own real ads counts as invalid traffic and can get the account closed.
The one critical thing to watch
Having an AdMob account closed is not reversible. The reason is almost always the same: invalid clicks.
Placing an ad next to a button, misleading the user into tapping it, or clicking your own ads all fall into this category. It raises revenue in the short term and ends the account in the long term.
Once your app is live and producing revenue, the real work is finding the reason behind a drop. We covered that in detail in managing AdMob revenue.