How is Your eCPM Doing: A Six-Month Trend Analysis

The effective cost per mille, or eCPM, indicates how much money on average developers earn for every 1,000 impressions or ads displayed in their game. Ad Monetization Managers pay special attention to this metric, as it is one of the most important ones. 

Other metrics also play a crucial role in determining the success of ad integration, such as engagement rate (the percentage of Daily Active Users who viewed at least one ad), impressions/DAU, and usage rate (number of impressions per viewer). However, developers have more direct control over these and are almost entirely dependent on their implementation (along with the game's genre/type).

The eCPMs are particularly intriguing since developers partly control their performance, yet many unknown factors may affect them. 

Additionally, the eCPM will vary based on some aspects that are constant and do not change (significantly) over time:

• Location - The eCPM is generally higher in countries such as the US, Canada, Australia, Japan, South Korea, the UK, and Germany compared to India, Indonesia, Thailand, and Vietnam.
• Ad Format - Rewarded video ads typically have the highest eCPM, followed by interstitials (though sometimes the opposite is true). Unlike the first two formats, banners (which are not fullscreen) have a much lower eCPM. 
• Platform - The balance of power changed significantly with IDFA depreciation. Historically, iOS had a higher eCPM than Android. Now, it’s a mixed bag - in some cases, the eCPM is higher on Android, sometimes the two are head-to-head, and sometimes iOS outperforms Android.

There are a number of ways developers can influence eCPM, including:

• Choice of mediation 
• Choice of networks
• A mediation optimization strategy
• Account management 
• In-game implementation
• Blocking strategy
• User acquisition

Though all of the above are important, some external influences on eCPMs are often so powerful that they seemingly completely overshadow developers' efforts and significantly impact eCPM trends. These factors might include:

• Campaigns 
• Seasonality
• Trends and developments in the gaming industry
• Non-gaming industry trends and developments

Recently, we've noticed that our eCPMs seem to be heavily influenced by external factors (factors not under our control), so we decided to examine the eCPM trends across all of the games and apps under our management. In this article, we’ll share some of our findings, which we hope you will find interesting. Feel free to share yours in the comments or reach out directly at [email protected] or via our website at this link. 

 

#1 Important Disclosures & Notes First 

We separated the data by ad format, platform, and country to keep insights useful and meaningful. In analyzing the data, we tried to stick to the following guidelines as much as possible:

• Our analysis did not include games whose scale was too small or changed dramatically during the period. The scale refers to daily ad impressions (derived from DAU changes).
• We omitted games if their UA significantly changed (sources, budgets).
• A game was also excluded from the analysis if its results appeared to be distorted by other circumstances (prolonged ad network outages, etc.).

Keeping all of these factors in mind, we are able to offer insights about eCPM for:

• Apps and games downloaded through the Apple App Store or Google Play Store
• Rewarded video and interstitial ads
• Russia, Brazil, Mexico, Mexico, the United States, and the United Kingdom

The games we analyzed run on different mediation platforms (LevelPlay by ironSource, MAX by Applovin, and FairBid by Fyber) that use various networks, including AdMob by Google, Audience Network by Meta, UnityAds, ironSource, and Applovin.

 

#2 Overall performance in Russia was wiped out in March. After that, it slowly began to recover.

The eCPMs have been wiped out on iOS and Android across rewarded and interstitial ad formats in March (compared to February). The eCPM value is down by 60% to 75%. Several factors contributed to this, including the decision of AdMob and Meta Audience Network to suspend ads in Russia due to the ongoing Ukraine invasion. In addition, Pangle has stopped serving ads to players from Russia and Ukraine. Among the networks that continue to show ads are ironSource, UnityAds, Applovin, Vungle, Fyber, and AdColony.

However, eCPM hit a record low in March. eCPM has slightly recovered since then, and this is particularly evident in June.

Below is a chart showing the trend.

 

#3 Rewarded video eCPMs have seen a more drastic negative trend on iOS than Android, affecting Tier 1 the most.

Here are some data points that illustrate how poorly iOS is doing:

• In the US, eCPMs have dropped by 20% to 40%
• In the UK, eCPM dropped between 21% and 47%
• In Germany, eCPM has decreased between 21% and 45%
• There have been fewer dramatic changes in non-tier 1 regions. Brazil, for instance, increased from February to April but has decreased since May. Mexico faces a similar situation. In general, Brazil appears to be stable (January to July). However, when we compare April and July, there is a 30% decrease. On the other hand, the situation is slightly better in Mexico, with a 23% drop.

 

#4 Interstitial ad eCPMs declined on iOS but less dramatically than rewarded video.

• In the US, eCPM has decreased between 10% and 23%
• In the UK,  eCPM has decreased by 22% to 25%
• In Germany, eCPM has decreased from 23% to 32%
• Interstitials in Brazil and Mexico behave similarly to the rewarded video. The first few months of the year showed a positive trend, followed by a decline. When comparing July to January, eCPMs in Brazil are down 6%, and those in Mexico are down 20%.

 

#5 eCPM on Android is generally performing better than on iOS. Generally, eCPMs are dropping, but not as drastically as on iOS.

• Rewarded video in the US - We found that most games saw a decrease of less than 5% (ranging from 0.3% to 4.7%). The decrease in other games was between 20% and 30%, but not beyond that.
• Rewarded video in the UK - All but one game shows a decline (6% to 18%). There was a 25% increase in eCPM in one game.
• Germany's rewarded video eCPMs have been affected most of the countries we checked. There has been a significant decrease from 10% all the way to 40%.
• Brazilian and Mexican rewarded video is doing better than tier1 countries on iOS, with an average decrease of around 10%.
• Based on the country, interstitial ads pay anywhere from 3% to 20% less. The US is most volatile (3% to 20%), followed by the UK at 10%, with Germany, Brazil, and Mexico at around 20% lower.

 

#6 There was no dramatic decrease in any of the markets (except Russia) in a single month. The downward trend has been consistent month by month.

Here is one example: eCPM changes month-by-month on iOS, rewarded video, United States.

For those of you who are curious, you may also be interested in this eCPM report by Appodeal. This article identifies some trends that align with their findings, whereas others are different. This could be due to a variety of reasons, including the fact that we manually analyzed all the data and excluded many games that (as mentioned previously) we considered should not have been included. At the same time, Appodeal used a more “unfiltered approach”.

 

What is causing this downward trend?

With the exception of Russia, where the reason is obvious, other results cannot be blamed on a single factor in other markets. We discussed these trends with a number of ad networks in the market, which generally agreed that several wider circumstances had contributed to the downward trend:

• The effects of the COVID-19 crisis are wearing off further - As the governments ease restrictions, people are turning to other forms of entertainment, engaging in outdoor activities, etc.
• Changes in IDFA - although IDFA was mostly unavailable to developers in Q3 2021, the impact may not become apparent until Q1 2022. This interview by Eric Seufert offers more details on the topic.
• We have all witnessed how the Ukrainian crisis has affected the global economy. Inflation is on the rise, which means marketing budgets are the first to suffer as advertisers go into recession mode. AdMob has hinted at the same to their clients in quarterly business reports. This shouldn’t come as a surprise since recent layoffs have already made headlines. Here are a few examples:  
  • Game Insight closed all its Russian offices and laid off 600 workers. Plarium also shut down its Russian operation, which had hundreds of employees from both Ukraine and Russia. This VentureBeat article states that other studios have relocated from Russia and Ukraine, either with or without their employees. 
  • PocketGamer reports that Niantic also cut its workforce by 8% due to the cancellation of four of its projects. The same trend is apparent among service providers - Adjust and Applovin lay off 12% of their workforces, while Unity cut its workforce by 4%. 

 

Now what?

“What can we do,” you might ask. Since the factors mentioned above are beyond our control, we cannot take immediate and direct action to reverse these trends. The best things an Ad Monetization Manager can do are:

• Make a more dense waterfall structure to optimize mediation 
• Consider switching focus to the lower parts of the waterfall
• AB testing continuously
• Diversifying revenue streams among different advertising networks, trying to identify new demand sources. In particular, regional networks could now be an attractive option. This includes HyprMX in the United States, Yandex and MyTarget in Russia, Pangle in Japan, South Korea, as well as some Latin American markets.

 

By Božo Janković, Head of Ad Monetization at GameBiz Consulting

The above article is a guest article for Gamesforum