How the war in Ukraine affected mobile app and game advertising

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

While thousands of lives were lost, advertisers naturally backed off when they realized people had bigger problems on their minds than downloading new mobile apps and games.

This had a major impact on advertisers and developers of mobile apps and games, as the changes in demand mainly took effect in Ukraine and Russia. Effective costs per mille (eCPMs) have taken a major hit, said Valerie Alfimova, chief revenue officer at Appodeal Stack and a business growth expert. Appodeal updates its mobile eCPM report quarterly, where it analyzes the eCPM of millions of ad impressions from more than 70 ad networks worldwide.

“The whole industry was affected on so many levels as eCPMs plummeted,” Alfimova said. “At the end of March, eCPMs fell 75% on Android and 71% for iOS. That’s what happened right after the invasion. It was not unexpected, given this massive geopolitical shift and the number of countries involved.”

Appodeal has looked at the regional effect on eCPMs as a result of the war in Ukraine.

But she noted that there has been a steady recovery since then, as revenues for the region bounce back to pre-war levels.

For the latest report, the award-winning video ad eCPM on iOS saw the US lose its top spot as it finished third in the second quarter, just below Japan and Australia. It’s also surprising to see emerging countries like Taiwan, South Korea, the UAE and Kuwait boom in this particular segment, Appodeal said.

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Rewarded video ad eCPM on Android saw the US and Australia in the top spots, closely followed by East Asian countries. European countries such as the United Kingdom, Sweden, Germany and France have lost positions in the top positions and their eCPM has fallen.

Rewarded video ad eCPM in Russia and CIS markets saw a gradual recovery during the second quarter of 2022. In March, eCPM fell by half on iOS and Android. But as the months passed, they quickly recovered the eCPM and by May it was back.

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

The different ad formats recover at different speeds, Alfimova said.

“The recovery trend is still very unstable,” Alfimova said. “The overall sales decline was about 15% to 20%.”

The eCPM of full screen ads on iOS saw an improvement. Compared to the previous quarter, Appodeal found that the eCPM rose in all countries. Not only in the top charts, but also at the bottom of the eCPM. Saudi Arabia, in 20th position, is now at $3.33, while it was around $2.50 a few months ago. Android saw a similar recovery.

Rewarded video ad eCPM in Russia and CIS markets fell by half in iOS in the last month of March and even more in iOS. This is mainly due to the fluctuations in the country’s economy and geopolitical upheavals.

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Rewarded eCPMs for video ads in Asian countries are booming more than ever and Appodeal expects it to continue to grow through the rest of the year. Japan has surpassed the US average eCPM for the first time. Also, eCPMs are rising in markets such as South Korea, Taiwan, Hong Kong, Singapore and many more.

It’s possible that iOS 14.5 and the new user privacy policy have led to a reallocation of marketing budgets for some companies.

In June, rewarded video ad eCPM on both platforms showed a small decline, which is not unusual for the summer months. Brazil stands out for its strong eCPM swings. The country seems to have established itself as a place to launch apps and it is getting more attention.

“The whole situation has taken its toll on the mobile developers and their income,” she said.

Unable to monetize their games or otherwise disrupted, many businesses are on the move.

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

Several Russian and Ukrainian game companies have gone bankrupt or relocated from their home countries. But there isn’t necessarily a wave of takeovers.

“Businesses are dealing with lost revenue as eCPMs fell and there are countries where you can’t get more users,” Alfimova said.

Appodeal’s look at eCPMs or mobile ad rates for banner ads.

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Russian game companies are torn apart by the war. Game Insight moved its headquarters in 2014 (when the first fighting started in eastern Ukraine) to Lithuania, but most of the development team was still in Russia. With the outbreak of the new war, Game Insight shut down and laid off 600 employees.

Plarium, which also had hundreds of employees in Ukraine and Russia, has shut down its Russian operation. G5 Entertainment had staff in both 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 staff were torn between offices in Ukraine and Russia. And Wargaming closed his studio in Minsk, Belarus,
where the company started. It had previously moved its headquarters to Cyprus and it has moved its Russian studios to Lesta Studio and cut ties. Now the creator of World of Tanks and World of Warships has moved to the West.

“Like everyone else, I just want this to end and the suffering to stop,” Alfimova said.

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This post How the war in Ukraine affected mobile app and game advertising

was original published at “https://venturebeat.com/2022/07/10/how-the-war-in-ukraine-impacted-mobile-app-and-game-advertising/”

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