Ask YC: MochiAds secret revenue share?

[Tichy]

I've gotten curious about flash games and MochiAds seems to be the standard for advertising in such games. However, in their FAQ they say "the exact MochiAds revenue share is not disclosed", what do you think about that? Maybe it is normal for advertising (how do AdWords work?), but at first sight it seems rather weird to me: "we promise we will pay you something, but we won't say how much" - what kind of contract is that? I don't think I would ever sign a contract like that under normal circumstances, but MochiAds might have a kind of monopoly?

Link: https://www.mochiads.com/faq.html#revenue_share

Oh yes, and any idea how much money can be made with flash game ads? I suspect it is just pocket money, but then again, many flash games have sequels, so perhaps they did pay out for the developers?

[dkokelley]

Most ad networks that I know of that use an ad bidding system do not disclose their rates. They can't tell you what you will be paid, because they don't know what they'll get for their ads. The advertisers bid for certain terms, the publisher gets a cut, and the network gets a cut.

This is how adwords/adsense operate. If they know what they will make per ad (assuming it's a static amount), they should disclose what they will pay the publisher, but if they don't know what they will get, how can they tell you what they will pay?

[Tichy → dkokelley]

Couldn't they state the percentage? It would still have to be based on trust, because the publisher can not know how much the advertiser has paid, but it would at least be slightly more transparent?

Maybe it is possible to make an estimate by trying to buy ads for one's own game through MochiAds, though?

I am completely new to this advertising thing, as is probably obvious...

[dkokelley → Tichy]

Take a look at Google's Adsense and Adwords terms of service. These are pretty much the standard that similar ad models follow. Stating the percentage is similar to a retail store telling everyone what their profit percentage is. If you try walking into a store and asking "How much did you pay wholesale for this?" you will probably not get the nicest response. It's a trade secret for them. This is why your advertising earnings can't really be broken down like that. Imagine if you found out that Google took 75% of revenue from ads on your site. It's the same as finding out that your hardware store charged you $10 for a hammer that cost them $2.50.

Some ad networks are more transparent with their rates. They'll tell you right away "50% goes to us, and 50% goes to you." but it's not required and it looks like the service you want to use doesn't do this.

You could try buying ads for your own game and see how much you receive vs. how much it cost you. Just make sure that you don't get caught :P Some companies don't allow this, so if you are going to do this, have a friend do it or use a different account.

[Tichy → dkokelley]

I guess Google can get away with it, because they are Google?

I understand vendors not wanting to give away their revenue, but in this case, I am not the person buying the hammer, I am the person who gave the hammer to the store to sell. So it seems to me at least telling me the percentage of revenue share would be fair. Then I would have to trust them on how much they sold it for, or, if things went bad, I could audit them.

With the way they do it now, they could make a million dollars off my game and never give me a penny. It just doesn't seem fair. And it is not like things like that have never happened before, think about all the bands that were ripped off by record labels. So is it really a good idea to trust here?

I have heard complaints about AdWords, too, although I forgot the details, did not pay enough attention at the time.