For mobile developers monetizing their apps, eCPM is an essential indicator of their ad monetization performance. When the whole industry experiences a drop in ad-generated earnings, it’s a clear sign to individual developers that the observed decrease in their ad revenue is due to a bigger issue. However, it remains vital to comprehend the underlying reasons for such a scenario and to acknowledge variations in eCPM based on factors like geographical location, chosen operating system and used ad formats.
What is an eCPM?
eCPM is ad revenue generated for 1000 ad impressions by a particular ad unit. Importantly, eCPM can also regard many ad units within the same app or website.
Formula:
eCPM = (total ad revenue/total measured ad impressions) x 1000
eCPM fluctuations in mobile apps – case study
We have conducted a case study to depict the recent eCPM landscape within our network. The study’s foundations revolve around visual representations, encompassing fluctuations in average monthly eCPMs from January 2021 to July 2023 for the iOS and Android apps. The presented data regards mobile apps from 6 countries: United States, Japan, Germany, United Kingdom, France, and Brazil.
1. Banner ads
Banner mobile ads are rectangular units usually displayed at the top or bottom of an app. They remain visible during the user’s interaction with a digital product.
- In terms of iOS Banner ads across all 6 countries, there was a 52.42% decrease observed when comparing June 2021 to June 2023. However, if we compare June 2023 to June 2022, there was a 5.99% eCPM increase;
- In Brazil, the average eCPM fell by 74.58% in May 2023 compared to May two years prior and 11.60% compared to May 2022;
- Similarly, developers in Germany experienced an average drop of 86.92% in February 2023 compared to the same month in 2021 and a 20.32% drop compared to February 2022;
- Even in the US, lowered eCPMs were seen, with a 67.83% drop observed in June 2023 compared to June 2021 and a 5.47% drop when compared to the same month in 2022.
Mostly because of the USA and Japan, Android Banner ads’ average eCPMs in all analyzed countries had a strongly increasing trend. But some growth trends were also spotted in other countries. For example:
- In Brazil, developers experienced a 53.64% increase in January 2023 compared to the same month in 2022. However, if we compare January 2023 to June 2021, only a 64.08% increase was noted.
2. Interstitial ads
Interstitial mobile ads are designed to occupy the entire screen of an app. They are commonly exhibited during moments of transition in an app’s operation, in its natural pauses, like amid various stages within a game.
Regarding Interstitial ads for iOS, there have been noteworthy decreases across all countries since March 2021. Notably, up to the present moment, the eCPM of all six analyzed countries has yet to reach its pre-decline levels.
- Across all 6 analyzed countries, in April 2023 compared to April 2021 – a 37.47% drop was spotted, and in April 2023, compared to the same month in 2022 – a 2.74% drop;
- When we take a closer look at eCPMs in the USA in March 2023, compared to March 2021, an average eCPM fell by 45.01%, while compared to March 2022, by 25.57%;
- Developers in Brazil, on average, have noted a 54.98% drop in March 2023 when compared to two years prior and a 146% drop when compared to the year prior.
- In July 2023, compared to the same month in 2021, average eCPMs in 6 countries dropped by 29.29%, and compared to July 2022 dropped by 14.40%;
- In the UK in July 2023, compared to the same month in 2021, a 28.60% drop was seen, and compared to July 2022 – a 22.12% drop.
3. Rewarded Video ads
As the name implies, a Rewarded Video mobile ad offers some kind of reward to the user in exchange for watching a video advertisement. For instance, the earned “price” might be another life or extra points in a game.
Compared to the charts above – regarding Banner and Interstitial ads – the situation with RV ads is different. For both iOS and Android, we can observe general stabilization and fewer drastic fluctuations:
- If we analyze average eCPMs in iOS apps in all countries from May 2021 compared to May 2023, we will observe a 13.99% decrease, and compared to May 2022 – a 3.56% decrease;
- However, some major drops can also be spotted: for instance, mobile app developers in Japan experienced a 46.60% drop in eCPMS in April 2023 compared to two years prior and a 27.70% drop compared to April 2022;
- In Brazil in May 2023, compared to May 2021, it was a 34.42% fall in average results, while compared to May 2022 – a 20.58% increase.
- Developers monetizing Android apps in July 2023, on average, in all analyzed countries, have seen a 29.96% drop when compared to July 2021; and a 9.53% drop when compared to July 2022;
- The situation in the UK also showed a downward trend – a 26.05% drop between June 2023 and 2021 and a 16.83% fall between June 2023 and 2022;
- Whereas Japan, from May 2021 to May 2023, has experienced a 50.79% drop, and from May 2022 to May 2023 – a 2.97% drop.
4. Average eCPMs from January till July 2021, 2022, and 2023
To better see the changes in eCPMs in recent years, it is best to collect data for all analyzed ad formats in one clear chart. In order to do so, we’ve calculated the average eCPMs achieved by mobile apps from all 6 countries we studied.
Without a doubt, we can see that the trend is downward for all ad formats. Even if, in some cases, there have been certain eCPM increases, they were relatively small. What is worth emphasizing is that we can also observe that the achieved levels rarely returned to the values recorded before the significant drops.
Why are eCPMs lower than usual?
A significant problem faced by many countries (not only the ones we took into consideration when preparing our case study) was higher than usual inflation. Due to the financial challenges of both advertisers and customers, budgets for advertising purposes start to shrink. With less capital, users aren’t so eager to interfere with ads, and this is the reason why some advertisers might want to spend less on ad formats like Banner and Interstitial ads. Overall, downward trends can be seen in the aggregated data chart (presented above).
What may come as a surprise, inflation partly contributed to maintaining high eCPM rates regarding Rewarded Video ads (decreases were recorded, but their value remained the highest of the three formats covered by the case study). With smaller purchasing capabilities, users may interact more willingly with Rewarded Video ads (as this ad format makes it possible for them to achieve something in the app without having to pay for it), while Banner and Interstitial eCPMs may decline more significantly.
Why does eCPM fluctuate so often?
Undoubtedly, there are global trends affecting the monetization effects of every publisher and mobile app developer. However, the localization (especially in the case of such strong economies as Japan and the USA), the chosen operating system, and the ad format are also critical.
There are many reasons why eCPM’s global scores (average global ones) fluctuate so frequently. Above all, these factors include:
- Seasonality – the advertising budget is usually more extensive in the last quarter of every year (due to events influencing the world’s majority, like Black Friday or Christmas);
- Global situation – if significant enough, it can even overshadow seasonal trends. A recent example, apart from high inflation, is the war in Ukraine, which affected the economies of many countries around the world;
- Trends in the world of games and mobile applications – observing the global tendencies regarding users’ preferences may help you direct your actions better (an example is the growing popularity of gambling apps in 2022 and 2023).
However, when it comes to average eCPMs achieved by individual apps, they may also vary depending on:
- Country and region of the world – this factor will influence not only users’ preferences when it comes to content type but also their purchase capabilities, which directly affects your ad inventory’s value;
- Applied ad formats – different ones will perform on a different performance level (like Banner or Interstitial ads compared to Rewarded Video format, as shown by our case study);
- Chosen app store – eCPM often differs depending on whether you opt for Apple App Store or Google Play;
- Engagement rate (percentage of daily active users who watched at least one ad in your app) – it largely depends on the popularity of the application and user engagement, especially users’ willingness to get a measurable app-related benefit for watching an ad;
- Usage rate (the number of views per user) – depending on how often the user launches your application (for instance, in the case of apps designed to facilitate the use of public transport, it may be several times a day, while in the case of meditation apps, it’s more likely to be used on average only once a day);
- Impressions/DAU (Daily Active Users) – which depends on factors like the game type, genre, position in the app store ranking, and many others.
Optimization – key to success
The final ad-generated earnings are influenced not only by general factors like seasonality, location, and global trends but also by the individual actions taken by the app developers. Their decisions, such as selecting the operating system and the app store and employing user acquisition strategies like ASO techniques, may significantly boost the application’s popularity and, in consequence, ad revenue.
Another aspect that developers wield control of and mustn’t overlook is the optimization of monetization efforts. This entails maximizing returns from used ad units, irrespective of the prevailing global circumstances and trends. Collaborating with the right partners offers personalized assistance in optimization and grants access to premium ad inventory and automation of many tedious processes, like ad mediation. The combined effect of undertaking these measures can lead to a remarkable increase in your ad revenue – all you have to do is click the “GET STARTED” button in the upper right corner!
