Round table: a big conversation about what is happening in the mobile game advertising market

How can we characterize the current situation in the mobile game advertising market?

Konstantin Ivanov — Brand Director at AdQuantum

We are still living in the era of SKAD, which is pointless to talk about, it has been with us for a long time, everyone has already come to terms with it. Large market players with a developed analytics system come up with their own ways and methods of attributing users/money/events to advertising campaigns that work through SKAD.

The hardest thing is for small studios, which do not have a major publisher behind them. In addition to problems with iOS attribution, there is also high competition on all major traffic sources with major players — they can afford to buy more and more transparently because of the thesis above.

Marketing tests require more and more money, because without attracting users, it is impossible to understand the value of changes in a product and the interest of the audience in it. In addition, we often struggle with time in mobile. Many small players do not have time to get to the positive unit economy. They have to look for either an investor or an interested publisher.

Artemy Falshunov — Head of In-App in Appska

I am currently observing the following:

1. Overheating of auctions in standard purchasing channels such as Facebook* and Google. Advertisers are increasingly interested in finding new alternative sources of advertising with high traffic quality and a paying audience.
2. Focus on a pragmatic approach to the purchase of advertising with the possibility of optimization by ROI, retention, ARPPU.
3. Mislides have found a second life in creatives, which justify themselves with effective CTR and CR.
4. Reducing budgets for brand awareness campaigns and tests.

Dmitry Sigov — Customer Relations Manager at Tenjin

According to the current market situation:

1. Against the background of the incessant growth of competition, large companies with stable cashflow and access to analytical data are in a privileged position.
2. Player behavior data is used for targeting and personalization of ads. A lot of focus is given to analysis and optimization at the creative level, as well as retention of the current audience.
3. In general, the importance of optimizing marketing costs was felt by all industry participants.
4. Small studios are increasingly trying to work more with developing countries (for example, Brazil), where the price of attracting players is not so high yet.

Vitaly Girsh — Managing Director for Eastern Europe at AppsFlyer

Regarding the market, I will note the following:

1. Marketers working with mobile applications have faced problems caused by changes in user behavior, difficulties with attribution and, in general, the macroeconomic downturn.
2. In the course of adapting to the constantly changing privacy rules (primarily Apple's ATT and Google's Privacy Sandbox), marketing teams were forced to rethink how to evaluate the effectiveness of advertising campaigns, how to make decisions about continuing advertising activity, and how to optimize creatives.
3. AI played a key role here. In the new conditions, it also allowed for fast and effective testing of advertising creatives, including the identification of winning elements and scenes.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

In terms of the number of installations and sessions, 2023 was not the most positive year in the mobile game advertising market. For example, the number of installations decreased by 2%, and the number of sessions decreased by 7%. The situation is currently improving: the number of installations in the fourth quarter of 2023 increased by 7% compared to the same period last year, and we at Adjust predict that this trend will continue: the number of sessions in January 2024 increased by 3% compared to January 2023. So I can describe the situation as positive.

Katerina Polyanchikova — Senior Sales Manager at Appier

The current situation in the mobile game advertising market can be described as dynamic, innovative and highly competitive. Hundreds of thousands of mobile games appear in app stores every year, and the struggle for user attention is becoming more fierce. Advertisers face the challenge of attracting attention to their games among a variety of alternatives, using strategies such as innovative advertising formats, retention and monetization strategies, and cross-promotion.

What is going on in the gaming market in general from a marketing point of view?

Konstantin Ivanov — Brand Director at AdQuantum

In our opinion, the transition to the SKAD era has hit games more than other market participants due to a more complex payment structure and the availability of IAP advertising.

Usually successful products have a very "long" retention and, accordingly, a tail of users, but it was them that SKAD hit the hardest, since it was necessary to make far-reaching assumptions about user behavior on the first day.

But time is passing, companies are adapting, bringing their solutions for probabilistic attribution and simulated conversions to the market, which, of course, do not allow working in the old mode, but at least facilitate the assessment of performance. You don't have to ask about the popularity of Apple Search Ads. Of course, she has grown significantly.

Artemy Falshunov — Head of In-App in Appska

According to the observed trends:

1. Every year there are more and more new games, and the competition for the user is constantly growing. At the same time, users are becoming more and more demanding about the choice of products.
2. Game manufacturers have stopped throwing money around, and are taking a more deliberate approach to their marketing activities and budget allocation.
3. Studios have started to devote more attention and funds to the development of high-quality mobile games, rather than their quantity or their PR. Developers also began to pay more attention to analyzing their target audience, studying their customer, as well as looking for insights and patterns and applying them in production and marketing.

Dmitry Sigov is a Customer Relations manager at Tenjin

First of all, I would like to note the trend towards the introduction of artificial intelligence in all stages of game development, as well as for the creation of promotional materials. This not only speeds up the development of games and creatives, which is critically important in our industry, but also helps small studios and indie developers compete with large companies, opening up more opportunities for self-production of games.

The trend of moving away from traditional hypercausals in favor of so-called hybrid projects continues. This transition is reflected in the preferences of major publishers seeking to find new hits.

Vitaly Girsh — Managing Director for Eastern Europe at AppsFlyer

Such market conditions have formed, as a result of which we predict a sharp increase in the number of high-quality free-play games on PCs and consoles. This will lead to the spread of mobile monetization approaches on platforms. The monetization itself will work thinner, it will be better integrated.

At the same time, the mobile gaming sector will continue to grow. Of particular interest is the emergence of third-party app stores. Saturation of the market with such solutions can lead to a change in marketing strategies. Companies may potentially decide that TikTok challenges and viral advertising are better suited to reach their audiences.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

I can point out several active trends:

1. Mobile game developers are actively porting their games to PCs and game consoles.
2. More and more advertising budgets are being redirected to advertising on Connected TV, which leads to the emergence of new players in this market. According to some reports, Connected TV (CTV) is the fastest growing advertising channel in the United States. It is expected to grow by 22.4% and reach a turnover of $ 30.10 billion by the end of 2024.
3. The introduction of AI into the creation of some elements of games. According to our data, 61% of developers have already started these processes, and 87% are confident that AI will dominate the industry over the next 10 years.
4. The transition to hybrid monetization: games with in—app purchases began to introduce advertising, and those who earn only from advertising began to embed purchases.

Over the past four years, we have witnessed an increasingly toughening struggle between Apple and Google over privacy. A new stage is planned for this spring, which is likely to hit the possibility of using digital prints. How will this affect the market?

Konstantin Ivanov — Brand Director at AdQuantum

This time has shown how important the issue of privacy has turned out to be for users. Now it's hard to imagine that once upon a time data protection was not in the spotlight.

The market will adapt. From the current point of view, it is difficult to say exactly how it will be, but, for example, machine learning is actively used in advertising, and the volume of this use is increasing. Perhaps this will play a key role in the current round of industry development, helping to isolate the right layers of the audience without compromising user privacy.

This will be a difficult time for businesses, because the data that helped the entire market spend marketing budgets more efficiently and earn money is gradually beginning to belong to fewer and fewer players in the application market.

Along with the rising costs, various web solutions will look more and more attractive, where much more is allowed.

Artemy Falshunov — Head of In-App in Appska

Firstly, if the possibilities of using digital data are limited or outdated, it will be more difficult to target your advertising campaigns to the target audience. This can lead to a decrease in the effectiveness of advertising and an increase in the cost of attracting new players. Which, in turn, will obviously raise the demand for alternative monetization methods such as paid subscriptions, in-game purchases, and the like.

Secondly, with the tightening of data privacy, it becomes more important to offer high-quality content that will attract the attention of players organically, without having to target them through personalized advertising. We know that many agencies have already retrained to create authentic content, which once again proves the importance of unique presentation and infotainment.

In our opinion, advertisers will have to rethink their advertising strategies and look for new ways to reach an audience or collaborate with platforms that are not so heavily dependent on digital fingerprints.

Dmitry Sigov is a Customer Relations manager at Tenjin

Recently, Apple has seriously complicated the work of marketers. I want to believe that Google will not follow their example. In any case, I would not worry too much about this, because the rules of the game are the same for everyone and we must respect the right of users to data privacy. Mobile analytics and attribution providers collaborate with both platforms and regularly release updates that meet the requirements of mobile stores.

Vitaly Girsh — Managing Director for Eastern Europe at AppsFlyer

As technology giants introduce increasingly stringent privacy measures, including restrictions on the use of digital fingerprint techniques, advertisers and marketers are increasingly facing challenges in understanding user behavior and providing them with personalized content. In this regard, companies will have to adapt their strategies to these changes, including looking for alternative methods of targeting and audience engagement, while prioritizing transparency and compliance with changing privacy standards.

 

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

As they say, "forecasts are a thankless task," so I'll say this: the tightening in the field of privacy has been happening for years, and those who adapt to new conditions only benefit. Many of our clients successfully run campaigns on iOS, but there are also those who are just discovering this wonderful world.

Google is still in the process of working on the Google Privacy Sandbox, but it is expected that this product will take into account the imperfection of Apple's solution and try to meet the interests of all parties: advertisers and advertising networks.

In general, everything is moving towards aggregated data and predictive metrics (pLTV, etc.) built using machine learning and other tools.

Katerina Polyanchikova — Senior Sales Manager at Appier

The focus on user privacy by giants like Apple and Google, especially with upcoming changes, is poised to reshape the landscape of digital identification methods, including digital fingerprints. This shift will profoundly affect the mobile gaming market, forcing advertisers, developers, and advertising technology companies to refocus and rethink their strategies for navigating in an environment of tightened privacy.

In response to these changes, we can expect:

1. Transition to contextual advertising: as dependence on individual user data becomes more limited, a revival of contextual advertising is likely, in which ads are placed based on the content of the site or application, rather than user behavior. This method respects the user's privacy while allowing targeted advertising.
2. Focus on First Party Data: Companies will increasingly rely on First Party Data, which is information collected directly from their audience with their consent. This shift will ensure that privacy rules are respected and will keep advertising relevant by using data from users who have directly interacted with the brand or game.

These adaptations are not only a response to regulatory changes, but also represent opportunities for innovation in how the mobile gaming industry interacts with users and respects their privacy. The market is ready for transformation, where confidentiality becomes a competitive advantage.

4. Another important trend is the diversification of distribution channels by gaming companies. Many are switching to the desktop web. It is clear that for the developers themselves, this is a plus, you can pay less for advertising and get more from IAP. But are those services that previously specialized only in mobile following them to the web?

Konstantin Ivanov — Brand Director at AdQuantum

I think this is inevitable: there are games and applications on the market with a huge audience and, accordingly, huge potential and real incomes, which are already beginning to benefit greatly from the transition to the web. It is unlikely that their current partners will want to lose them, and the developers themselves will be happy to continue interacting with familiar teams.

And then Apple also allowed alternative stores in some countries. This may be an option for small studios whose economy does not allow them to pay a high percentage of commission. The question remains — will the main traffic sources and MMP work with them? We believe that "yes" if there are releases = there will be traffic, and this is an opportunity to earn both.

Artemy Falshunov — Head of In-App in Appska

Yes, we are seeing that many services that previously specialized only in mobile devices are also beginning to actively explore and implement strategies for the desktop web, following the gaming companies. This allows them to expand their audience and increase profitability. In general, for services specializing in mobile devices, the transition to the desktop web can open up new opportunities for monetization, such as subscriptions, advertising and affiliate programs.

Dmitry Sigov is a Customer Relations manager at Tenjin

Let's just say that services want to follow their customers. The number of games offering purchases bypassing the commission of Apple and Google is growing, but the percentage is still not high enough. But the transition to Steam and Nintendo Switch is not so easy. It's still a slightly different industry with its own rules. It requires a certain amount of experience and expertise, different from mobile.

Vitaly Girsh — Managing Director for Eastern Europe at AppsFlyer

Yes, gaming companies are noticing a steady increase in the number of users connecting to games from various devices and platforms. Accordingly, they have to look for new ways to attract and engage players who match this behavior.

For successful expansion, services will need to create comprehensive solutions, on the one hand, taking into account the development of privacy in mobile, on the other, able to aggregate data from PCs and consoles.

It is difficult to say whether services that previously specialized only in mobile games will move into new niches for themselves.

I will only note that for both game marketers and game developers, the ability to measure all platforms through a single service is the Holy Grail.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

Of course, we have noticed this trend and are currently engaged in the relevant services. We recently announced integration with Google Play Games as part of our tracking solution for PC and game consoles. So the services will not be left out.

Katerina Polyanchikova — Senior Sales Manager at Appier

The trend towards diversification of distribution channels is gaining momentum. This allows developers to bypass the significant fees charged by mobile app stores, thereby reducing advertising costs and increasing revenue from in-app purchases.

As for services that traditionally specialize in mobile games, there is also a noticeable transition to using web platforms. However, it is not instantaneous. After all, switching to the web is a complex process that includes technical, marketing and strategic aspects.

5. What is the current situation with mobile game advertising prices?

Konstantin Ivanov — Brand Director at AdQuantum

There has never been any volatility in value for mobile games, as such, and now it is invisible, because Q5 (December 26 — January 10, the period of cheaper auction against the background of advertisers going on vacation) went smoothly for our UA managers, we did not see a significant reduction in price in the market for all categories of traffic. If we take the beginning of the year and its middle, then the difference has leveled off this year, the auction is now completely flat. Therefore, both in terms of competitiveness and in terms of pricing, everything is calm.

On Google, DSP and advertising networks such as AppLovin, Unity Ads, ironSource, etc., the change in the cost of attraction is not so noticeable compared to Meta**, which has long been the main source of traffic for games, regardless of genre. The price of advertising can be controlled (within reasonable limits):

• creatives;
• working with publishers (blacklists/whitelists);
• testing different optimizations;
• working with shooting galleries;
• working with optimizations.

As for Meta**, the price of finding the "golden" creative has increased, both due to competition and due to the oversaturation of the audience with advertising games. Nevertheless, it is still the best source for testing marketing hypotheses due to the high "controllability" of incoming traffic by targeting settings.

Artemy Falshunov — Head of In-App in Appska

Advertising prices are rising due to increased competition in the market. It is difficult to say more precisely, since the cost of installation depends on the geo and other parameters of the advertising campaign.

Dmitry Sigov is a Customer Relations manager at Tenjin

Prices vary depending on the genre, audience, country and platform.

Tenjin recently published a report with CPI data by country and platform. On average, for hyper-casual games, the installation price on Android is 14 cents and 67 cents on iOS. The price is constantly increasing. There are still enough developing countries where the installation price is not so high.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

This is a very general question, the answer to which depends on the genre and geo. I can share information from our recent games report. The median eCPI in games globally increased from $0.52 in 2022 to $0.99 in 2023. The biggest increase was observed in the simulator genre, namely by $ 1.23, that is, from $ 1.45 to $2.68.

As usual, hyper—casual games have the lowest CPI, but it has also grown significantly - $ 0.09 to $0.32. However, the RPG did not support the trend, showing a decrease in the median CPI by $ 0.42 (from $ 4.50 to $4.08).

6. I heard that the election of the American president will affect the cost of traffic in the United States. They say that it will take off in such a way that it will be difficult for those who promote mobile games. What do you think about this?

Konstantin Ivanov — Brand Director at AdQuantum

The elections are guaranteed to affect the cost of traffic. Knowing how scrupulous the United States is about election interference, we believe that the percentage of bans and disruptions of creatives on moderation will increase. This will be a very nervous time for the US auction — therefore, traffic will definitely be more expensive both before the election, during and, perhaps, even for some time after.

November is already an extremely hot time, thanks to retail and marketplaces: sale 11.11, black Friday, cyber Monday. The auction has been heated to the limit for almost the entire month, so this is not the time of the "gamblers", everyone is trying to spend it on optimizing what has already been launched and preparing for pre- and post-Christmas time. But the elections are likely to affect a good period for gaming companies — Halloween, for which many people make seasonal events and launch retargeting. This is a cool point of "domonetization", which, apparently, will bring a little less profit this year.

The rise in price will be most noticeable on social platforms such as TikTok, Meta**, X*** (formerly Twitter). This can also include Google. Reasons: a lot of political advertising is being purchased, election races. Stricter moderation by advertising sources in order not to get caught up in the scandal. There are no significant changes in in-app networks during this period.

Artemy Falshunov — Head of In-App in Appska

Every U.S. presidential election significantly increases the cost of purchasing advertising in the United States. But this is a temporary phenomenon that is not happening for the first time, this is not the first or last presidential election. The hype will subside and the auction will return to the previous pricing, as it was before. It is also important to note that the cost of traffic during this period increases most in such basic channels as Facebook* and Google. Advertisers can shift their advertising budget in favor of other platforms that are less susceptible to cost increases due to elections (for example, asa, Unity and algorithmic platforms).

Dmitry Sigov — Customer Relations Manager at Tenjin

Yes, the presidential election may affect the cost of traffic in the United States due to an increase in political advertising. This may temporarily complicate the promotion, but it is short-term, as, for example, advertising at Christmas.

Don't forget to diversify your geo-targeting and audience.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

This is an expected behavior due to the fact that large budgets are coming to the market, buying out all available traffic. This often happens during Black Friday, Christmas sales, and so on. Developers often use similar events in their LiveOps, add relevant content, thereby increasing monetization. So you can find an application for this situation.

Katerina Polyanchikova — Senior Sales Manager at Appier

Indeed, the historical trends of previous American presidential elections have demonstrated that major political events can significantly affect the advertising landscape, including the cost of traffic in the United States. During election cycles, political campaigns acquire huge amounts of advertising space on various platforms, which leads to an increase in demand and, consequently, to an increase in the cost of available advertising inventory.

For industries such as mobile games, this surge in advertising costs can pose serious challenges, especially for campaigns targeting the same demographic as political advertisers. Increased competition for user attention can make it more difficult to achieve the desired visibility and engagement levels of mobile games, making it more expensive.

Given these factors, it is reasonable to expect that the upcoming presidential election may similarly affect the cost of traffic, potentially making it difficult to promote mobile games in the United States during the election period. Advertisers in the gaming industry need to plan accordingly, taking into account strategies such as budget adjustments, targeting, and campaign launch times, in order to successfully overcome the potentially unpredictable advertising landscape during the election cycle.

7. The last question is about the future. Which of the existing trends in the mobile game advertising market are you ready to bet on? What will show its best side?

Konstantin Ivanov — Brand Director at AdQuantum

The use of AI to create creatives and automate production processes will show itself better.

In general, predicting in a rapidly changing industry, especially in AI, is hard and not always rewarding work. But I'll try. The upper slice of the market is usually visible to the naked eye, and there are always giants that will not go anywhere: Stable Difusion, Midjourney, ChatGPT. With deeper layers of the market, the story is completely different.

For example, the same voice neural network from Open AI. It hasn't been shared yet, but according to information, the voice clones better than Eleven Labs. Perhaps someone will train vectorizers or other ILMS for specific games. Or perhaps the industry will learn how to train a node-based stable, which can literally integrate third-party technologies.

Adobe releases AI features in its subsystems, that is, neural networks for texturing have appeared. Well, you've probably seen what films the Sora neural network from Open AI makes. We are a few steps away from a miracle, humanity is gradually creating a replacement for itself, similar in image and thinking, self-learning, able to communicate with us. In two or three years, a huge breakthrough in technology has occurred, and in five years you will not recognize the industry.

Artemy Falshunov — Head of In-App in Appska

The development of AI and its use in an even wider range of marketing tasks: data analysis, prediction, research, creation of content and creatives, and so on. The same can be said about the increasing use of video assets in advertising and personalization with segmentation by target audience.

Dmitry Sigov is a Customer Relations manager at Tenjin

My forecast:

1. The increasing use of AI in mobile advertising. It will be increasingly used in the creation of successful creatives to reduce production costs.
2. Increasing the number of ROAS campaigns (Return on Advertising Spend) in advertising networks. Every major network will offer the opportunity to launch such campaigns in parallel with traditional CPI.
3. The competitiveness in the market will also grow, as well as the requirements for the effectiveness of advertising.
4. This means the importance of access to reliable analytics, which will help identify successful and unsuccessful aspects of mobile campaigns, identify sources of high profits and optimize advertising costs in real time.

Vitaly Girsh — Managing Director for Eastern Europe at AppsFlyer

My prediction is as follows:

1. AI-based marketing solutions will become increasingly popular.
2. Trends previously associated primarily with mobile gaming will shift to PCs and consoles after major mobile titles.
3. I think this transition will mark the beginning of a new gaming era. Over the next two years, we will see the return of the previous volume of user engagement. And, of course, this will be facilitated by the improvement of the economic and investment climate.
4. The growth of the hybrid casual games segment will also continue.

Elena Ivanova — Gaming Lead for Eastern Europe and Israel in Adjust

Betting is not my thing. Seriously, I rely on the trends I mentioned earlier. Personally, I would be very interested in how the story with AI will develop. I turn to him on various issues myself and am very pleased with his help.

Katerina Polyanchikova — Senior Sales Manager at Appier

Looking ahead to the evolving landscape of mobile game advertising, the trend I'm willing to bet on is the sophisticated integration of insight—based data and automated decision-making to optimize advertising strategies and user engagement. This approach, which does not just boil down to using data for targeted campaigns, but will create a flawless, personalized gaming experience.

*A social network banned in Russia.

** An organization banned in Russia.

***A social network banned in Russia.