How the war in Ukraine impacted mobile app and game advertising

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

As lives were lost in the thousands, advertisers naturally pulled back as they realized people had bigger problems on their minds than downloading new mobile apps and games.

This had a big impact on mobile app and game advertisers and developers, as the changes in demand hit their bottom lines in Ukraine and Russia in particular. The effective Cost Per Mille (eCPMs) took a big 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. “By the end of March, the eCPMs on Android plummeted 75% and iOS was down 71%. That’s what happened right after the invasion. It wasn’t unexpected, given this massive geopolitical shift and the number of countries involved in it.”

But she noted that there has been a steady recovery since that time as revenues are recovering toward pre-war levels for the region.

For the latest report, the rewarded video ad eCPM on iOS saw the U.S. lose its position in the top charts, as in the second quarter it placed third, right below Japan and Australia. It is also surprising to see how emerging countries such as Taiwan, South Korea, UAE & Kuwait are booming in this specific segment, Appodeal said.

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

Rewarded video ad eCPM in Russia and the CIS markets saw a gradual recovery during the 2022 Q2. In March, the eCPM plummeted by half on iOS and Android. But as the months passed, they recovered the eCPM quickly recovered, and by May, it was back.

Rewarded video ad eCPM in mature markets — the U.S., Japan, the UK, and a lot of mature countries — have been plummeting since March. Australia seems one of the few that had a positive eCPM trend, up until June, when it plummeted below their March levels on both iOS and Android.

The different ad formats are recovering at different speeds, Alfimova said.

“The recovery trend is still very unstable,” Alfimova said. “The overall decrease in revenue was around 15% to 20%.”

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

The rewarded video ad eCPM in Russia and CIS markets have fallen by half in iOS, and even more in iOS during the last month of March. That is mostly due to the fluctuations in the country’s economy and geopolitical upheavals.

Rewarded video ad eCPMs in Asian countries are blooming more than ever, and Appodeal expects it to keep growing for the rest of the year. Japan, for the first time, has surpassed the average eCPM of the U.S. Also, the eCPMs in markets such as South Korea, Taiwan, Hong Kong, Singapore, and many more are rising.

It is possible that iOS 14.5 and the new user-privacy policies may have caused some redistribution on the marketing budgets of some companies.

In June, the rewarded video ad eCPM on both platforms showed a small decrease, which is not uncommon for the summer months. Brazil stands out for its strong eCPM fluctuations. The country seems to have settled as a place to soft-launch apps and it’s getting more attention.

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

Unable to monetize their games or otherwise disrupted, many companies are in a state of flux.

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

A variety of Russian and Ukrainian game companies have gone out of business or relocated out of their home countries. But there isn’t necessarily a wave of acquisitions happening.

“Companies are dealing with a loss of revenue, as eCPMs went down, as there are countries where you cannot acquire users anymore,” Alfimova said.

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 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, shut down its Russian operation. G5 Entertainment had staff in both Russia and Ukraine, and it 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 apart between offices in Ukraine and Russia. And Wargaming closed its studio in Minsk, Belarus,
where the company started. It had previously moved its headquarters to Cyprus, and it has transferred its Russian studios to Lesta Studio and cut ties. Now the maker of World of Tanks and World of Warships has moved to the West.

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