Android Ad Revenue Payments vs. App Sales Payouts

Android App income is within your reachWhere’s My Money?

Your revenue model has a big impact on when and how you get your money for Android apps.  There are a myriad of different app stores and ad networks, but there are a number of things that each one has in common within its respective category.

You can monetize your app in a number of ways, including ads such as with LeadBolt or AdMob, by selling it on various Android app markets, or a few other more advanced methods (see blow for more info).

All the different payment schemes and rules that stand in between you and your money can get confusing, I’m going to describe some of the key differences between ad revenue and app sales revenue.

Update:  Check out the just-released Android Ad Network Primer on Kindle or in print for a crash course in getting the right advertisements into your Android app quickly.

Ad Revenue Models

If your revenue model includes ads, you might be using an ad network like AdMob, or  you might be using an ad exchange/mediator like Mobclix or AdWhirl.  There are dozens of ad networks out there, and several that would categorize themselves as ad exchanges or ad mediators.

The nature of ad revenue is that someone pays for the clicks or impressions.  Someone takes that money from them and eventually it gets to you.  Just not right away.  In fact, some people have reported significant difficulty getting paid from a few ad exchange companies.  It can be a bit of work to get your first ad revenue for your app paid to you.

Even when things are at their best and you get paid on time, there is a significant delay.  The ad companies use terms like ‘net 60’, ‘net-75’, or even ‘net-90’ to conform to the standard terminology that means “you’ll get your money, just not for 60 days!”.  This is a common concept in the business world, where the charges are accrued, then an invoice gets filed, and eventually money changes hands.

The result for you is that you must first wait until you reach the payout threshold (which might take a few months) and then you must wait a few months further for the payout to be available for that invoiced amount.

As a small developer (and as a consumer) I’m not used to this pattern.  I’d like to see my money as close to when I earn it as possible.  Too bad for me, that’s not how it works.

So, with ad revenue you need to expect that you literally won’t see any money for several months, even if you start off with a bang.

Income from App Sales

App sales are a different matter.  When a consumer purchases your app, the money changes hands within a few hours.  That means that someone (not you except in a few cases) has the money right away.  That’s good, as it speeds up the process.

In most of the Android app markets that I’ve reviewed, the payment occurs on a monthly schedule as long as the payment threshold is met.

Google Wallet (formerly Google Checkout) for Google Play (formerly the Android Market) as a threshold of $1, so you will always get your money.  Every other market, however, has a higher threshold and they’ll keep your money until the month when you pass that threshold.  For example, SlideMe sets the threshold at $100, while AndroidPIT sets it at $20.  For the Amazon Appstore it is $10.  This can make a big difference, but it all depends on your sales too.

So, in the simplest case of selling your app on Google Play with Google Wallet, you’ll get your money about 3-4 days after the end of your first month.  You’ll likely  never be waiting on your money for more than about 35 days, and for sales near the end of the month you’ll be waiting even less.  That’s not a bad deal.

On the other hand, you may get your money from another Android app markets in the same way as ad revenue – every few months when you reach the threshold.  Still, at least it’s available a few days you hit that threshold, rather than a few months after you hit the threshold.

Combined Strategy

If you have both ad-supported and paid apps available, your income may be inconsistent, particularly until you have a very high income.  You won’t get your ad revenue for months, but your paid app income should start rolling in after the first month.  With enough streams of income going on, you might eventually achieve some level of consistency.

Recommendations

Hopefully you now understand the difference between the payout strategies for ad companies and from app sales.  It’s best to know this in advance, so you can plan your income stream.  It’s an unpleasant surprise to find out that your expected payday has been postponed for several months.

If you are more concerned about the consistency of payouts, you might want to closely scrutinize the payout rules of the ad network or the market to see how they do payouts.   You may also want to re-evaluate your choice of paid or ad-supported apps.  It may be possible to select a revenue strategy that selects companies that will pay you on a schedule that you find acceptable.

Of course, there is much more to a killer strategy to making money from Android apps.  I cover this and a lot more in the Android Income Powerstart Guide, which will take you from planning your app through deploying it and well beyond – to maximizing your income.

Posted in Android permalink

About ProjectJourneyman

I am a software engineer that escaped the cubicle world at a large company to go solo with Android app development. My attention to detail and quality applies both to my apps and to my research on how to make money with Android. Now that I have the freedom to work on my own projects, I am documenting my efforts in the hopes that it will help other current or aspiring independent Android developers get the income they desire.

Comments

Android Ad Revenue Payments vs. App Sales Payouts — 7 Comments

  1. What if you are developing a free app, and not using an ad network, but instead hope to gain revenue from paid advertising, eg by restaurants whose details are featured, the payments being made directly to myself. Does any of this revenue, or any revenue at all, have to be paid to Google ?
    Thanks very much
    R

    • No, none at all – Google won’t be involved at all in your advertising deals. The only criteria they have is that you don’t have a payment system inside of your app (in-app purchases) that cuts them out. You are free to make any deals you want where you are paid directly. Even if your app is ad-supported, Google doesn’t require that you use their solution (Admob).

  2. Sorry for the delay, but thanks very much for the reply.
    Just another quick question if you don’t mind. You mentioned “don’t have a payment system inside of your app (in-app purchases) that cuts them out”. Does this include when your app forwards to a website to make payments eg to a ticket booking website ? Also would you happen to know if your card and password details are secure in this case ie where website uses https etc, but accessing the website from your mobile ? Are the card and password details encrypted when being send from the phone ?
    Thanks very much
    Rh

    • I can’t say for sure, but I think that payments made through the website are ok for things that aren’t related to app upgrades (e.g. unlocking games). Purchasing things like tickets or advertising sound different to me.

      With HTTPS, the data is encrypted before it leaves the browser that is sending the data. However, a few things need to be secure to make sure the transaction is safe: the web server must be properly secured, the payment form/page must be done properly, and the phone must not be infected with malware. If you are setting up a website that accepts payments, the standard e-commerce security practices apply, and you should be able to find a lot of information on that on the web (and hopefully you’re working with a company that handles all of the security stuff already).

  3. Hello there, thank you very much for all this awesome information you have gathered.
    I am pretty sure it has been helpful to many people, so I wanted to express my thanks as well. I still have not deployed any Android app yet, and I’ve barely started investigating and gathering information, however, I do give you the credit that yours is one of the best I have come across with lately.

    Best regards,
    Francisco

  4. Sorry if you answered this already, but which one pays better, or, under what circumstances does one pay better than the other?