As app developers seek better yield and efficiency from in-app ads, understanding how waterfall mediation works is important. With average per capita ad spend in the in-app advertising market projected to hit $49.93 in 2025, there’s real money at stake in choosing the right ad mediation strategy.
This guide will explain how waterfall mediation works within mobile apps, its advantages and limitations, and what this shift means for app monetization going forward.
What is Ad Mediation Waterfall in Mobile Apps?
Ad mediation waterfall is a traditional method used in mobile app monetization to maximize ad revenue. It involves prioritizing ad networks based on their historical performance, specifically, their effective cost per mille (eCPM).
Ad requests are then delivered sequentially through a “waterfall” structure.
How Does It Work?
When a mobile app has an ad slot available:
- The mediation platform sends the ad request to the top-ranked ad network (based on historical eCPM).
- If that network can’t fill the request due to no suitable ad or bid rejection, it falls to the following network on the list.
- This continues down the chain until one network successfully serves an ad.
This sequential method ensures that high-performing networks get the first opportunity, while still giving backup networks a chance to fill the inventory.
Also read: Waterfall vs. SDK vs. Open Bidding: Which Monetization Model is Best for Your App?
Example:
Imagine you have a mobile game with ad slots. Your mediation setup includes:
Priority Ad Network Historical eCPM
1 Network A $8.00
2 Network B $6.50
3 Network C $4.20
4 Network D $2.30
When a user opens your app:
- The request is first sent to Network A.
- If no suitable ad is returned, it flows to Network B, and so on.
- Eventually, Network C fills the request.
Pros of Waterfall mediation
Waterfall meditation has a few advantages:
1. Maximize Fill Rate with Multiple Network Partners
- Instead of relying on a single ad network, waterfall mediation gives access to multiple partners.
- If one network can’t fulfill the ad request, the next one is called. This helps reduce lost impressions and improves fill rates.
2. Improve eCPM and Maximize Revenue
- By ranking networks based on historical performance, the highest-paying ad networks are prioritized.
- This structured setup helps developers earn the best possible CPM for each impression.
3. Simplified SDK Integration
- Developers only need to integrate one SDK of the mediation platform (e.g., Google AdMob, AppLovin MAX, etc).
- The platform handles the connections and logic for all partner networks, reducing technical complexity and app bloat.
Downsides of Waterfall Ads
While waterfall mediation was once the standard, it’s quickly becoming outdated, especially as more advertisers shift toward real-time bidding. Here’s why:
-
CPMs Are Based on Estimates
Waterfalls rely on historical CPM data, not live bidding. This is why ad ranking might not reflect the current, real-time value.
-
No Real-Time Competition
Networks in this model are called in a fixed order. Thus, even if a lower-tier network is willing to pay more, it never gets the chance unless the top networks pass.
-
Limited Fairness for Ad Networks
Some networks never get access to prime inventory, so their historical CPMs may look lower than what they’d pay. This hurts their future chances in the waterfall.
Smarter Ads, Higher Revenue: In-App Bidding with YieldMonk
Why settle for fixed ad rates when top brands are ready to outbid each other for your inventory in real time? In-app bidding flips the script. Each ad slot sparks a live auction, guaranteeing the best payout.
At YieldMonk, we make it effortless. Let YieldMonk turn every ad slot into a high-value opportunity. Contact us now!
