This is a little off topic but I have noticed that many of the bigger game publishers (traditionally retail only) are going online, be it Web, PSN, XBL, mobile. People like EA have been offering more and more downloadable content, trying to capture new revenue sources.

Do you have any insight into how these companies are addressing hybrid revenue streams? Are they integrating an ARPU model? It would be interesting to read more about how bigger players are making the move to diversify their biz. Any links or articles you know of would be greatly appreciated.

Thanks!

Anyway, yes, the way the eCPM has been calculated in our sector of the industry has been… (daily revenue / daily uniques) * 1,000.

But Offerpal plans to move away from such metrics, in part thanks to your post here. The eCPM (better described as earnings per UV) will probably take a while to go away, however, because publishers must use some metric to compare platforms such as ours to one another, and eCPM has become the standard.

Most likely, we will adopt something very similar to your ARPU. Thanks…

eCPM is a great way..

for companies such as Offerpal and Superewards to spread their service.

Anyways, the fact that Matt has posted here his thoughts about eCPM means that their company is definitely working in the right direction. The overall demeanor of the company providing this Leadgen service to an application needs to be thought about long and hard, because the impact to long-term subscribers after introducing a “shady” monetization method such as Leadgen (I say shady because many of the offers open up customers to massive amounts of spam and unsolicited offers).

Offerpal and other Lead-gen companies needs to come around and realize that there is more of a market for their service then they realize. It's just that, as it stands, so many of the offers are focused towards “throw-away” users. The type of people that only use a companies service for a short amount of time and then leave anyways. For these companies, having their users spammed by unsolicited offers a week or two later because they used large amounts of their personal information to get “virtual currency” is not a problem.

But there are many companies (ours included) that value their customers deeply. I hope that these lead-gen companies put some more focus towards providing spam-free and honest offers instead of whatever pays the most.

To net it out, the entire thing is commoditized and many of the offers are coming from the same leadgen CPA networks. Sachin's claim is that the main drivers of different monetization numbers are basically just business terms, for now.

As for the Daily ARPU number, I think that almost any number is better than the eCPM metrics that are being quoted You're right that an ARPU would be particularly helpful, but for the developers, they will want to normalize against the uniques to their entire app, not just the payment page.

Matt here from Offerpal. This is a great post. And you're absolutely right — it makes sense for us and the industry to start using a better metric than eCPM, which is a bit like fitting a square peg into a round hole. There are some benefits to using it, however. The key is — and we make sure to point this out to people — that you're getting that eCPM based on impressions to our offers page, so it's up to the publisher to drive as much traffic as they can to that page. Obviously this is a much different model than putting some banners up wherever you have the inventory and getting eCPMs in the hundreds of dollars, and as such it takes some getting used to. But most of our publishers started measuring our performance on an eCPM basis in the beginning, so it kind of stuck.

One other metric we've used is similar to your ARPU — we tell people that we can make them about $75 per day for every 1,000 DAUs, which is our network average. If my math is correct, that's (75 / 1,000) X 30 = $2.25 ARPU on a monthly basis? Granted, that's not revenue per TOTAL users, just active users, so it's a bit different from what you suggest. Perhaps we should start talking more in those terms?

Anyway, thanks for the thoughtful analysis.

Thanks for clearing that up, Andrew.

After reading this article, the question “How does this new company with creative ideas compare against the industry leaders such as Offerpal?” looms in my mind.

A critical thought I had of Gambit right off the bat was that, isn't the success of an offers-based monetization solution company based on how large their network of advertisers is (diversity of offer), and the effectiveness of their system smoothly moving users from the offer page to the final completion?

Otherwise, a great and informative article Andrew.

I do see an upcoming evolution of the lexicon necessary to evaluate lead-gen (and CPA) based businesses, especially as simple impression math falls further out of vogue for transactional segments. The claims of Offerpal making $100-500 eCPMs is better evaluated in the model you put forth.

Looking forward to more posts on this sort of topic!