AdMob Bidding vs Waterfall: The 2026 Guide to Maximizing Revenue

If you are a game developer in 2026 and you are still manually arranging eCPM floors in your AdMob console every Monday morning, you are essentially throwing money into a furnace. The era of the "Waterfall" is ending, and the era of Real-Time Bidding (RTB) has fully arrived.

However, simply flipping a switch isn't enough. Many developers who switch to bidding blindly actually see a drop in revenue because they don't understand the underlying mechanics. To truly maximize your ARPDAU (Average Revenue Per Daily Active User), you need to understand why the industry shifted, how the auction works, and how to implement a Hybrid Strategy that captures the best of both worlds.

At Boomie Studio, we have transitioned our entire portfolio of puzzle games to a hybrid bidding model. In this guide, I will break down exactly how we did it, and how you can stop guessing what your traffic is worth.

1. The Legacy Model: What is the Waterfall?

For over a decade, mobile ad monetization relied on a "Daisy Chain" model, commonly known as the Waterfall. To understand why it's flawed, we have to look at the logic flow.

In a Waterfall setup, you (the publisher) manually rank ad networks based on what you hope they will pay. When a player finishes a level and triggers an interstitial ad, the mediation platform asks networks one by one:

The Fatal Flaw

The flaw in this system is hidden in step 2. What if Unity Ads was actually willing to pay $14.00 for that user? Because you hard-coded them at position #2 with a request for $12.00, you will never know. You either sold it for $12 (undervalued) or they passed.

Furthermore, the latency is a user experience killer. If it takes 2 seconds to traverse the waterfall, the player might close the app or start the next level before the ad even loads.

2. The Revolution: Real-Time Bidding (RTB)

Bidding (also known as Header Bidding or In-App Bidding) flattens the waterfall. Instead of a sequence, it is a simultaneous auction.

When an ad request is generated, the mediation platform sends a "bid request" to AdMob, Meta, AppLovin, Mintegral, and Unity Ads at the exact same millisecond. Each network analyzes the user's device ID, location, and history, and returns their best possible price.

By using bidding, you ensure that for every single impression, you are getting the highest price the market is willing to pay, not just the price you estimated manually.

The Major Benefits

• Higher ARPDAU: Competition drives prices up. When networks know they are competing in real-time, they bid more aggressively.
• Operational Efficiency: No more managing 50 "Line Items" and eCPM floors. The system manages itself.
• Reduced ANRs (App Not Responding): Fewer SDK initializations and shorter network calls mean less strain on the CPU.

3. Comparison: Waterfall vs. Bidding

Feature	Waterfall (Legacy)	Partner Bidding (Modern)
Revenue Potential	Limited by manual floors.	Maximized by open competition.
Fill Rate	Can drop if top networks pass.	Near 100% (High density).
Maintenance	High (Daily/Weekly adjustments).	Low (Set and forget).
Load Time	Slow (Sequential requests).	Fast (Parallel requests).
Transparency	Low (Black box).	High (Bid density reports).

4. The "Hybrid" Strategy: The Best of Both Worlds

So, should you delete your Waterfall today? No.

Not every ad network supports advanced in-app bidding yet. Additionally, in some specific geos (like Tier 3 countries), traditional waterfall instances can sometimes outperform bidders due to cached ads.

The industry standard for 2025/2026 is the Hybrid Model.

This ensures that if a non-bidding network has a high-value ad, they still get a chance to show it. AdMob handles this hybrid logic automatically in Mediation Groups.

5. Implementation Guide for Unity Developers

Ready to upgrade? Here is the checklist for moving from a static waterfall to a dynamic hybrid setup in AdMob.

Step 1: Partner Setup

You cannot just add "Meta" to AdMob. You must first create an account with Meta Audience Network, create a Property, and generate a "System User Access Token."
Required Bidders: Meta, AppLovin, Mintegral, Unity Ads, ironSource.

Step 2: Enable "Partner Bidding" in AdMob

Go to Mediation -> Bidding Sources. Click "Add Source." You will need to paste the API Keys and Reporting Keys from the partner networks here. This allows AdMob to talk to them server-to-server.

Step 3: Mediation Groups

Create a Mediation Group for your Ad Unit (e.g., "Interstitial_High").
Bidding Section: Add all your bidding partners here.
Waterfall Section: Add "AdMob Network" (which acts as a traditional waterfall source) and any custom events for networks that don't support bidding.

Step 4: Update SDKs (Crucial!)

In Unity, you must install the specific AdMob Mediation Adapters for each network.

// Example: Using Google Mobile Ads Plugin for Unity
// Ensure you have these adapters in your project:

GoogleMobileAds-AdMob-Unity.package
GoogleMobileAds-MetaAudienceNetwork-Adapter.package
GoogleMobileAds-AppLovin-Adapter.package
            

If you forget the adapter, the bidding will fail silently, and you will lose revenue.

6. Compliance & Privacy (The 2026 Standard)

You cannot discuss monetization without discussing CMP (Consent Management Platform).

Since Google's 2024 policy update, if you do not use a Google-certified CMP (like Usercentrics or the built-in AdMob Privacy Message) to collect GDPR and CPRA consent, bidding networks will refuse to bid.

• Meta Audience Network checks for the consent string. If it's missing or "Denied," they will not return a bid.
• Action: Go to AdMob -> Privacy & Messaging and set up your GDPR message. It is free and mandatory.

Conclusion

The transition from Waterfall to Bidding is not just a technical upgrade; it is a business necessity. By moving to a Hybrid Bidding model, you increase competition for your inventory, reduce manual workload, and improve the user experience with faster load times.

At Boomie Studio, switching to hybrid bidding increased our average eCPM by roughly 22% in the first month. Don't leave money on the table—let the advertisers fight for your users.

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Frequently Asked Questions (FAQ)

Q: Does bidding work for Banner ads?
A: Yes, but the uplift is smaller compared to Interstitials and Rewarded Video. The real revenue jump comes from high-impact formats.

Q: What is "app-ads.txt"?
A: It is a text file you host on your developer website listing your authorized ad sellers. Bidding partners (DSPs) crawl this file. If you don't have it, many premium advertisers will block your app to prevent fraud. Do not skip this.

Q: Can I use AdMob Bidding with LevelPlay or MAX?
A: Yes. If you use AppLovin MAX as your primary mediator, you can add AdMob as a bidder *inside* MAX. The concepts are the same, just the hierarchy changes.