How it works
When an ad is shown in the app, the mediation or ad SDK reports what that impression earned, known as impression-level revenue. The app passes this amount to the measurement SDK, or the measurement platform collects it from the mediation platform's reporting, and it is added to the user's revenue. Because the user is already tied to an install source, revenue can be summed by campaign and by cohort day, next to purchases and subscriptions.
Why it matters for an app team
Many apps earn most or all of their income from ads. If only purchases are attributed, their campaigns appear to return almost nothing and cannot be optimised. With ad revenue attributed, the cost per install can be weighed against what users from each source earn.
In practice
Example with made-up numbers: a campaign costs $1,000 and brings 2,000 installs. In their first 30 days those users see 300,000 ad impressions that earn $900, and they spend $150 on in-app purchases. Counting purchases only, D30 ROAS is 15%. With ad revenue included, it is 105%.
Common confusion
This is revenue your app earns by showing ads, not the money you spend on advertising. Impression-level revenue is an estimate reported at the moment the ad is shown; what the networks finally pay can differ a little. Averages spread evenly across users also hide the fact that a small share of users usually sees most of the ads.