How much money does a free app make from advertising?

App Advertising

Download count doesn’t matter at all for revenue. Only the active users count and time spent on app matters the most.

You have 10,000 daily active users for your application. It is pretty good number to make decent revenue out of your app. I assume every user spends approximately 2 minutes on your app per day and you are using banner ads in your app.

Most of the advertising networks follows Cost per Click (CPC) model for their ads. So whenever user click on the ads in the app, few pennies will be added to your pocket. Optimal Click through ratio (CTR) for apps is around 1.5 – 2 %. The average revenue per click (RPM) is around $0.10 for banner ads. It differs based on type of ads. Banner ads provide the lowest RPM, Interstitial ads have moderate RPM ($1-3) and Video ads provide the best one ($5-10).

Banner ads will be having 30 seconds refresh rate, meaning that every 30 seconds new ads will be fetched and shown.

Lets do some math

Number of ads shown per day = number of active users * time spent on the app * ads per minute => 10,000 * 2 * 2 = 40,000 banner ads.

Average number of clicks = number of ads * click rate => 40,000 * (1.5 / 100) =600 clicks

Revenue through ads = Clicks * RPM => 600 * 0.10 = $60

So, you will make approximately $60 per day through banner ads alone. The revenue will differ slightly based on your user location. Usually users from UK, US, Canada and Australia give you the best revenue.