Duolingo is a language learning company that offers free language education to users around the world. Unlike other language learning apps, Duolingo gamifies the language learning experience and users never hit a paywall once they pass a certain level. “Our mission is to develop the best education in the world and make it universally available, so we don’t charge for language content,” says Senior Product Manager Edwin Bodge. “A large portion of our resources are dedicated to improving user learning experiences. And we remain committed to building an app that provides free, high quality content while still being a profitable business,” says Staff Software Engineer Yash Patel.
In 2015, Duolingo decided to partner with AdMob to begin monetizing the app while preserving a free, high quality experience. For the last 5 years, Duolingo has worked with AdMob to implement a range of ads — from native to rewarded — and tested mediation and bidding. With the AdMob platform, Duolingo’s revenue initially grew 70% through mediation and then another 20% with bidding. Bidding also increased cost-per-thousand impressions (CPM) by up to 20% across various ad formats.
Beginning to scale revenue while staying mission-driven
A few years into the business, Duolingo was heads-down focused on building the app, developing content, and solving the challenges of language learning. The company was growing organically at a steady rate, but making zero dollars in revenue. “We didn’t have anyone working on monetization because it wasn’t a priority for us,” says Yash.
In 2015, a Duolingo product manager felt it was time for a change and began advocating for a partnership with AdMob — leading Duolingo to start A/B testing ads in their free app. The team started with native ads, which were unobtrusive and could be styled to match Duolingo’s app UI. “We care a lot about design, so that was a very important factor to us,” says Yash. As this was their first attempt at monetizing the app, the team kept a close eye on retention and session duration throughout their tests.
To further boost revenue, Duolingo started working with more ad networks and managed them with an in-house mediation solution. However, the team soon realized that managing multiple ad networks would require a lot of time and resources. “It became very time consuming to manage all our different ad networks, so we knew it was time to make the switch and rely on a partner to mediate for us,” explains Yash. The team considered multiple platforms, and did extensive A/B tests to make sure a new mediation partner would not cause crashes or strain on the app. Ultimately, the team decided on AdMob due to its ease of use, brand reputation, and its positive relationship with the Duolingo team.
Taking engagement a step further with rewarded ads
With native ads in place, and AdMob mediation running strong, Duolingo turned its attention to improving user engagement. In 2017, when an exclusive contract with another provider came to an end, Duolingo partnered with AdMob on rewarded ads. “Rewarded video is one of the formats that lets us get more creative and helps generate more impressions and engagement,” says Yash.
The design of Duolingo’s rewarded ads is inspired by the set-up and ad strategy of casual games. “We spend a lot of time on the product development side looking at other games,” begins Edwin, “and it’s important for us that all app experiences, from learning to rewarded ads, are easy to follow.” Duolingo uses rewarded ads in exchange for extra lives or in-app gems. The extra lives let users continue their lesson, while the gems let users purchase skins or protect their learning streak. For some rewards, like gems, rewarded ads offer to double, or add to, that achievement in exchange for watching the ad.
“Rewarded ads have been a positive thing for Duolingo because they are a really easy way to give users a taste of a premium feature without having to actually pay,” says Edwin. With rewarded ads, Duolingo has seen an uptick in engagement and ads revenue — making it easier to convince still-skeptical teams that ad monetization is the right path forward.
“Set it-and-forget it”: testing bidding
Bidding, says Yash, was a big game-changer for the company. When the feature was out in beta, the AdMob team invited Duolingo to integrate the solution on top of its mediation waterfall. “We were excited to jump into it because bidding felt like a way we could just set it up and trust that we wouldn’t have to constantly update things,” says Yash. The team was excited about the possibility to save time and resources by not having to optimize every ad setting daily.
Duolingo tested bidding on rewarded video first — its most optimized format at the time. Duolingo’s rewarded video had three ad networks set up with CPM floors at different price points. “We wanted to test bidding on our best ad set up because then we’d know there was something of value there. It’s easy to beat something simple, but it’s hard to beat something that’s already optimized,” says Yash.
Duolingo tested bidding the same way that it tests all new features: using A/B testing. Traffic was randomly split into an experimental group, which used bidding mediation, and a control group, which used only waterfall mediation. After controlling for external variables and running the test over 3 weeks, the team found ARPDAU & revenue increased by over 20%.
A future of global growth
Although Duolingo has their AdMob portfolio seamlessly set up and running, they continue to work with their AdMob team to brainstorm new monetization methods with Duolingo. “The day we started forming a stronger relationship with the AdMob team, our numbers started flying off the charts. The people support is our favorite part of working with AdMob,” says Edwin. With the AdMob platform, Duolingo initially increased its ad revenue by 70% with mediation and then another 20% once it layered in bidding. Across different ad formats, eCPMs with bidding grew between 10% and 20%. For rewarded ads alone, engagement increased 2.5% and ads revenue increased up to 50%.
In the next five years, Duolingo plans to expand its global footprint, increase revenue, and become a publicly-traded company. The team will also focus on monetization to the global audience and looks forward to future collaborations with other Google teams. “A big focus for our future is to teach and certify the English language to folks who are abroad, so we want to partner with Google to really ramp up our performance marketing side and grow internationally,” says Edwin. But no matter how much it grows, Duolingo remains committed to keeping education free, providing the highest-quality learning experience, and running a strong business.
