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The war in Ukraine has had a major impact on the mobile apps and games industry since the conflict began in February.
As thousands of lives were lost, advertisers naturally retreated when they realized people had bigger issues on their minds than downloading new mobile apps and games.
This had a big impact on advertisers and developers of mobile apps and games, as changes in demand affected their bottom line in Ukraine and Russia in particular. Effective cost per thousand (eCPM) has been hit hard, said Valerie Alfimova, chief revenue officer at Appodeal Stack and business growth expert. Appodeal updates its mobile eCPM report quarterly in which it analyzes the eCPM of millions of ad impressions from more than 70 ad networks worldwide.
“The whole industry has been affected on many levels as eCPMs have fallen,” Alfimova said. “At the end of March, eCPMs on Android dropped 75% and iOS dropped 71%. This happened right after the invasion. This was not unexpected, given this massive geopolitical change and number of countries involved.
But she noted there has been a steady recovery since then, as incomes return to pre-war levels for the region.
For the latest report, the eCPM of Rewarded Video Ads on iOS saw the US lose its position in the top rankings, as in Q2 it ranked third, just below Japan and Australia. It is also surprising how emerging countries such as Taiwan, South Korea, the United Arab Emirates and Kuwait are booming in this specific segment, Appodeal said.
The Android Rewarded Video Ads eCPM ranked the US and Australia at the top, followed closely by East Asian countries. European countries such as the UK, Sweden, Germany and France lost positions in the top ranks, as well as their eCPM dropped.
eCPM for rewarded video ads in Russia and CIS markets saw a gradual recovery in the second quarter of 2022. In March, eCPM fell by half on iOS and Android. But over the months they picked up the quickly recovered eCPM, and by May it was back.
The eCPM of rewarded video ads in mature markets – the US, Japan, UK and many mature countries – has fallen since March. Australia appears to be one of the few to have seen a positive eCPM trend through June when it fell below its March levels on iOS and Android.
Different ad formats recover at different speeds, Alfimova said.
“The recovery trend is still very unstable,” Alfimova said. “The overall drop in revenue was around 15% to 20%.”
The full-screen ad eCPM on iOS has seen an improvement. Compared to the previous quarter, Appodeal observed that the eCPM in all countries increased. Not only at the top of the charts, but also at the bottom of the eCPM. Saudi Arabia, in 20th position, is now at $3.33, whereas a few months ago it was around $2.50. Android has seen a similar recovery.
The eCPM of rewarded video ads in the Russia and CIS markets has halved on iOS, and even more so on iOS in the last month of March. This is mainly due to fluctuations in the country’s economy and geopolitical upheavals.
The eCPMs of rewarded video ads in Asian countries are blooming more than ever, and Appodeal expects them to continue growing for the rest of the year. Japan, for the first time, surpassed the average eCPM of the United States. Additionally, eCPMs in markets such as South Korea, Taiwan, Hong Kong, Singapore and many more are increasing.
It’s possible that iOS 14.5 and new user privacy policies have caused some redistribution of marketing budgets for some companies.
In June, the eCPM of rewarded video ads on both platforms saw a slight decline, which is not uncommon during the summer months. Brazil stands out for its strong fluctuations in eCPM. The country seems to have settled in as a place to soft launch apps and it is gaining more and more attention.
“The whole situation has taken a toll on mobile developers and their revenue,” she said.
Unable to monetize their games or otherwise disrupted, many businesses are in a state of flux.
“I don’t see too many acquisitions happening,” she said. “They are too busy moving their businesses and like to save their lives, especially in Ukraine. A lot of developers are trying to leave.
Various Russian and Ukrainian game companies have out of business or displaced outside their country of origin. But there is not necessarily a wave of acquisitions.
“Companies are facing a loss of revenue because eCPMs have gone down because there are countries where you can’t acquire users anymore,” Alfimova said.
Russian game companies have been torn apart by war. Game Insight moved its headquarters in 2014 (when the first fights started in eastern Ukraine) to Lithuania, but most of its development team was still in Russia. With the outbreak of the new war, Game Insight closed its doors and laid off 600 employees.
Plarium, which also had hundreds of employees in Ukraine and Russia, closed its Russian operations. G5 Entertainment had staff in Russia and Ukraine and opened a new office in Poland.
Playrix moved its headquarters from Vologda, Russia, to Dublin in 2014. But the company said its staff was torn between offices in Ukraine and Russia. And Wargaming closed its studio in Minsk, Belarus,
where the business started. He had previously moved his headquarters to Cyprus, and he moved his Russian studios to Lesta Studio and cut ties. Now the creator of World of Tanks and World of Warships has moved west.
“Like everyone else, I really want this to end and the suffering to stop,” Alfimova said.
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