To begin with, let’s review the basics.
Effective cost per mille (eCPM) is a metric that indicates how much money developers earn on average from every 1,000 ad impressions they display in their game.
Keeping track of this metric is crucial for ad monetization, which is why it’s high up on any ad monetization manager’s priority list.
However, other metrics also significantly influence the overall success of ad integration.
This includes the engagement rate (the number of Daily Active Users who watched at least one ad), use rate (impressions per viewer), and impressions/DAU.
However, these metrics are more directly controlled and influenced by the developer and are almost entirely dependent on in-game implementation (along with the genre and type of game).
The eCPM is particularly interesting since it is somewhat within the developer’s control, but many unknown factors influence it as well.
As a result, the eCPM will also vary greatly depending on some aspects that (most of the time) remain constant:
There are a number of ways developers can influence eCPM, including:
In spite of all of this, factors that influence eCPMs that are outside the developer’s control are so significant that they can sometimes seemingly overshadow the developer’s efforts and shape the developer’s eCPM trend. These factors may include:
Lately, we have felt that our eCPMs are heavily influenced by the latter (factors in the ecosystem beyond our control). Therefore, we decided to check the eCPM trends for each game and app we manage.
To make the insights as valuable and meaningful as possible, we separated all the data by format, platform, and country. When analyzing the data, we tried to stick to the following guidelines:
Based on these factors, we can share insights about eCPM for:
The games we analyzed run on different mediation platforms, including LevelPlay by ironSource, MAX by Applovin, and FairBid by Fyber, and use various ad networks.
Still, the common ones are AdMob by Google, Audience Network by Meta, UnityAds, ironSource, and Applovin.
Across iOS and Android rewarded and interstitial ad formats, eCPMs have plummeted in March (compared to February). The eCPM value had been reduced by about 60% to 75%.
The major reason for this was AdMob and Meta Audience Network’s decisions to stop serving ads in Russia because of the ongoing Ukrainian invasion.
In addition, Pangle has stopped serving ads to Russian and Ukrainian players as well.
Among the networks that continue to show ads are ironSource, UnityAds, Applovin, Vungle, Fyber, and AdColony.
It was, however, in March that eCPM fell to its lowest. Since then, the eCPM has started recovering, especially evident in June.
You can find the chart demonstrating the trend below.
To illustrate how bad things are on iOS, here are a few points:
The changes have not been so dramatic in other non-tier 1 regions. From February through April, Brazil experienced an upward trend, but there has been a decline since May. In Mexico, the situation is similar.
In general, Brazil is more or less stable (January to July). However, there has been a 30% decrease between April and July. The situation is slightly better in Mexico, with a 23% decrease.
Over the past few months, there has been an almost consistent downward trend.
Here is one example: The eCPM changes month-on-month on iOS for rewarded videos in the United States.
You can also check out Appodeal’s eCPM report if you’re curious. Our analyses match some of their findings, while others differ.
Several factors may have contributed to that. One of them is that we analyzed all the data manually and left out those games that we felt did not make sense to include for reasons mentioned previously.
At the same time, Appodeal took a more “unfiltered approach”.
There is no single reason to blame for the current decline of the eCPM, except in Russia, where the reason is apparent. According to many advertising networks in the market, the downward spiral may have been caused by a number of broader circumstances:
The Effects of the COVID-19 crisis are wearing off: With far fewer restrictions in place globally, people have turned to other forms of entertainment, including outdoor activities.
Changes to the IDFA: Despite IDFA becoming mostly unavailable for developers in Q3 2021, the effects won’t have been felt until Q1 2022. Check out Eric Seufert’s interview for more information.
We have all seen the effects of the Ukrainian crisis on the global economy. With inflation on the rise, several advertisers are going into recession.
Of course, in that scenario, marketing budgets are hit hardest. AdMob has hinted at the same in their quarterly business reviews.
There has already been a wave of layoffs making headlines in the past few weeks and months, so this shouldn’t be a surprise. Here are a few examples:
We cannot take immediate and direct action to stop these trends since the abovementioned factors are entirely outside our control. Here are some of the best things Ad Monetization Managers can do: