How the war in Ukraine affects mobile app and game advertising

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The war in Ukraine has had a major impact on the games and mobile app industry since the conflict began in February.

When thousands of people lost their lives, advertisers naturally retreated when they realized that people had bigger problems in their heads than downloading new mobile games and apps.

This has a big impact on advertisers and developers of mobile apps and games, as changes in demand affect their bottom line in Ukraine and Russia in particular. Valerie Alfimova, chief revenue officer at Appodeal Stack and an expert on business growth, says Effective Cost Per Mille (eCPM) has made a big impact. Appodeal updates its mobile eCPM report quarterly, where it analyzes the eCPM of millions of ad impressions from over 70 ad networks worldwide.

“The whole industry was affected on many levels, as eCPM plummeted,” said Alfimova. “At the end of March, eCPM on Android plummeted by 75% and iOS by 71%. That’s what happened right after the invasion. That was not out of the question, given this major geopolitical shift and the number of countries involved in it. “

Appodeal looked at the regional influence on eCPM due to the Ukraine war.

But she noted that there has been a steady recovery since then as revenue is recovering to pre-war levels for the region.

For the latest report, iOS rewarded video ads’ eCPM has knocked the US out of the top rankings, as in the second quarter it ranked third, just below Japan and Australia. Appodeal says it’s also surprising to see how emerging countries like Taiwan, South Korea, the UAE, and Kuwait are booming in this particular segment.

The ECPM of rewarded video ads on Android saw the US and Australia in the top spots, followed by East Asian countries. European countries such as the UK, Sweden, Germany, and France have lost their place in the top rankings, as have their eCPMs.

The ECPM of rewarded video ads in Russia and the CIS markets saw a gradual recovery in Q2 2022. In March, eCPM plummeted by half on iOS and Android. But as the months passed, eCPM quickly recovered, and by May, eCPM was back up and running.

The ECPM of rewarded video ads in mature markets – the US, Japan, UK and many mature countries – has fallen sharply since March. Australia appears to be one of the few countries with a trend. positive eCPM direction, until June, when it plummeted below March levels on both iOS and Android.

Alfimova says different ad formats are recovering at different rates.

“The recovery trend is still very volatile,” Alfimova said. “Total sales are down about 15% to 20%.”

ECPM full screen advertising on iOS has improved. Compared to the previous quarter, Appodeal found that eCPM in all countries increased. Not only on the top chart but also at the bottom of the eCPM leaderboard. Saudi Arabia, in 20th place, is now $3.33, while a few months ago it was around $2.50. Android has seen a similar recovery.

The ECPM of rewarded video ads in Russia and the CIS markets halved in iOS and even more in iOS in the last month of March. That was largely due to fluctuations in the economy. country and geopolitical upheavals.

The ECPM of rewarded video ads in Asian countries is blooming like never before and Appodeal expects it to continue to grow for the rest of the year. Japan has surpassed the average eCPM of the US for the first time. In addition, eCPM in markets such as Korea, Taiwan, Hong Kong, Singapore and many others is also increasing.

It’s possible that iOS 14.5 and the new user privacy policies may have caused some companies to reallocate marketing budgets.

In June, the eCPM of rewarded video ads on both platforms saw a small drop, which is not unusual for the summer months. Brazil stands out for its strong eCPM fluctuations. The country seems to have become a place for soft launch apps and it is getting more attention.

“The whole situation has affected mobile developers and their earnings,” she said.

Unable to monetize their games or go on hiatus, many companies are falling into disrepair.

“I don’t see too many acquisitions happening,” she said. “They are too busy moving businesses and want to save their lives, especially in Ukraine. A lot of developers are trying to leave.”

Many Russian and Ukrainian game companies have out of business or move out of their home country. But it doesn’t necessarily have to be a wave of buybacks.

“Companies are facing loss of revenue due to a drop in eCPM, because there are countries where you can no longer get users,” said Alfimova.

Appodeal looks at eCPM or mobile ad rates for banner ads.

Russian game companies have been torn apart by the war. Game Insight moved its headquarters in 2014 (when the first fighting began in eastern Ukraine) to Lithuania, but most of its development team remains in Russia. With the outbreak of the new war, Game Insight closed its doors and laid off 600 employees.

Plarium, which also has hundreds of employees in Ukraine and Russia, has ceased operations in Russia. G5 Entertainment has employees in both Russia and Ukraine, and it has opened a new office in Poland.

Playrix moved its headquarters from Vologda, Russia, to Dublin in 2014. But the company says its employees have been split between offices in Ukraine and Russia. And Wargaming has closed its studio in Minsk, Belarus,
where the company started. Previously, the company moved its headquarters to Cyprus, and moved its Russian studios to Lesta Studio and severed ties. Now, the producer of World of Tanks and World of Warships has moved to the West.

“Like everyone, I just really wanted this to end and end the suffering,” Alfimova said.

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