How is Your eCPM Doing: A Six-Month Trend Analysis
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).
What Influences the eCPM?
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:
- Location: Countries such as the United States, the United Kingdom, South Korea, Japan, Canada, Australia, and Germany will have much higher eCPMs than countries like India, Thailand, Vietnam, Indonesia, etc.
- The Format of the Ad: In terms of eCPM, rewarded video ads typically generate the highest numbers, followed by interstitials (although sometimes it is the other way around). Unlike the first two, banners have a much lower eCPM (as a non-fullscreen format). You can read more about different ad formats here.
- Platform: The balance of power shifted significantly with IDFA depreciation. Traditionally, iOS had a higher eCPM than Android. The results are mixed now – sometimes Android has a higher eCPM than iOS, sometimes they are evenly matched, and sometimes iOS is still in the lead.
There are a number of ways developers can influence eCPM, including:
- Choice of the mediation platform
- Choice of ad network
- Optimizing mediation
- Account Management
- In-Game Ad Implementation
- User Acquisition
- Blocking strategy
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:
- Trends and developments in the gaming industry
- Non-gaming industry trends and developments
Our Six-Month eCPM Analysis
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.
#1 A Few Disclosures And Notes Before We Start
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:
- If the scale of the game (daily ad impressions, driven by DAU changes) was too small or changed dramatically, we excluded it from our analysis.
- We omitted games if the UAs changed significantly (sources, budgets).
- We also excluded games from the analysis if any other exceptional circumstances affected the results (prolonged ad networks downtime, etc.).
Based on these factors, we can share insights about eCPM for:
- Games downloaded through Google Play Store or Apple App Store.
- Games using Rewarded Video and Interstitial Ads.
- Countries including the United States, United Kingdom, Germany, Brazil, Mexico, and Russia.
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.
#2 In March, Ad Performance in Russia Declined Across the Board And Has Been Recovering Since
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.
#3 Video eCPM for iOS has been declining more than for Android, affecting Tier 1 countries the most.
To illustrate how bad things are on iOS, here are a few points:
- The eCPM has dropped by 20% to 40% in the US.
- The eCPMs have fallen between 21% and 47% in the UK.
- The eCPM has declined by 21% to 45% in Germany.
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.
#4 iOS interstitial ads eCPM shows an apparent decrease as well, but less dramatic than rewarded video.
- In the US, the eCPM has fallen between 10% and 23%
- In the UK, eCPM has dropped from 22% to 25%
- In Germany, eCPM has decreased from 23% to 32%
- The eCPMs in Brazil and Mexico follow the same pattern as the rewarded video. There was a positive trend in the first few months of the year, followed by a decline. When we compared July to January, the eCPM in Brazil decreased by 6% and that in Mexico by 20%.
#5 Android eCPM is performing better than iOS, with declines not as dramatic as on iOS.
- Rewarded video ads in the US: Most games saw a decrease of less than 5% (between 0.3% and 4.7%). The decrease in other games ranged from 20% to 30%, but not beyond.
- Rewarded video in the UK: With one exception, all games showed a decrease (6% to 18%). In one game, the eCPM increased by 25%.
- Germany’s rewarded video eCMP has been affected most by the countries we checked. The eCPM has gone down from 10% to 40%.
- Similar to iOS, rewarded video is doing better in Brazil and Mexico than in Tier 1 countries, with a decrease of around 10% on average.
- Depending on the country, interstitial ads are paying out anywhere from 3% to 20% less. Volatility is highest in the US (3% to 20%), around 10% in the UK, and around 20% in Mexico, Brazil, and Germany.
#6 No market (except Russia) experienced a dramatic decline in a single particular month.
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”.
What Is Causing This Negative Trend?
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:
- Game Insight closed all its Russian offices and laid off 600 workers. Plarium shut down its Russian operation, which had hundreds of Russian and Ukrainian employees. According to this VentureBeat article, a number of other studios have moved their offices, either with or without their employees, from Russia and Ukraine.
- As PocketGamer.biz reported, Niantic also canceled four projects, reducing its workforce by 8%. We can observe a similar trend among service providers. Applovin and Adjust laid off 12% of their staff, while Unity laid off 4%.
How to Increase eCPM?
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:
- Make the waterfall structure denser to optimize mediation.
- Focusing more on the lower parts of the waterfall.
- Continuously AB testing your ad monetization strategy.
- Diversifying revenue streams between different ad networks, focusing on new demand sources. Networks that are only available in certain regions may be worth exploring. This includes HyprMX for the United States, MyTarget and Yandex for Russia, and Pangle for Japan, South Korea, and Latin American markets.
Need help optimizing your eCPM? Get in touch for a free consultation!
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