What are Google Ad Manager Reseller Networks?
Google Ad Manager reseller networks have been a popular and profitable ad monetization strategy in the mobile advertising industry. These networks allow mobile publishers to maximize their revenue by leveraging Admob demand against Google AdX demand. By utilizing one or more resellers, mobile publishers can significantly increase their average Ad ARPDAU (Average Revenue Per Daily Active User) on mobile.
The Impending Shakeup: Moving to Bidding on Mobile
However, this monetization hack is about to come to an end. On October 31st, Google will completely transition to a bidding system for mobile. This transition raises questions about the future of GAM (Google Ad Manager) networks and what it means for publishers. In this guest post, Felix Braberg shares his insights on the upcoming changes and their implications.
Understanding GAM Networks
Google Ad Manager (GAM) networks are essentially resellers of Google Ad Exchange (AdX) demand. The core concept behind GAM resellers is arbitrage – taking AdX demand and pitting it against Admob demand on mobile. Admob typically charges mobile publishers around 30% to display ads, while Google Ad Manager charges a lower rate of 20%. GAM networks bridge this gap, allowing AdX demand to compete on mobile against Admob and pocketing the 10% difference as their margin. It’s worth noting that GAM networks often have their own demand sources as well, but this is the basic principle.
The Reason Behind GAM Networks
At first glance, it may seem strange that Google allows vendors to profit from arbitrage on their own traffic. However, there is a logical explanation. Admob and Google Ad Manager are separate entities within Google, with Admob focusing solely on serving mobile publishers and Google Ad Manager serving desktop publishers. Although this division seemed reasonable initially, it quickly became apparent that many desktop clients also had mobile apps. Rather than diverting this supply to another entity, keeping it under the same corporate umbrella made more sense. This prompted the emergence of GAM resellers, bridging the gap and enabling mobile-first publishers to take advantage of the lower margins available through GAM. In recent years, many mobile publishers have found great success and significant profits by utilizing GAM networks.
The Future: The End of GAM Resellers?
However, on October 31st, 2023, Google will withdraw bid requests for Admob placements on mobile and shift all demand through their own bidding system. Additionally, they will no longer support AdX demand in GAM. The speculation is that Google will utilize AdX demand in their bidder to narrow the eCPM (effective cost per thousand impressions) delta between placements and bidding. Currently, this delta can be as high as 50-50%. As a result, GAM resellers will lose access to AdX demand, which accounts for a significant portion (around 80-90%) of their traffic in some cases. There are also rumors circulating that Google will no longer buy traffic through third-party sources, further affecting publisher profits. This means that GAM networks will need to adapt in order to survive.
The Options for GAM Networks
Despite the changes, GAM networks still have options. They have established direct relationships with mobile publishers and have been given a six-month warning about the impending changes. To navigate this shift, nimble GAM networks can choose to bolster their demand with private PMP (Private Marketplace) deals, re-broker traffic through exchanges, or pursue both options. However, it is essential to note that securing supply-side publisher SDK integrations is always challenging in the ad tech space. Some large GAM networks have already accomplished this feat. It remains to be seen how profitable this new approach will be for publishers. Time will tell, but one thing is certain – all GAM networks have a lot of work to do in the next six months to strengthen their demand.
Recommendations for Publishers
Given the upcoming changes, publishers may wonder if they should still add GAM partners despite the October deadline. The answer is clear – there are still six months left to take advantage of the most profitable ad monetization hack in mobile history. It would be unwise not to maximize the benefits for as long as possible. After October 31st, the success of GAM resellers will depend on their ability to stock up on demand and determine their own future.
Edited by Paige Cook