- Mobile game advertising revenue jumped by as much as 59% in April from a year earlier as the coronavirus pandemic led millions of people to spend more time playing games on their smartphones, according to a report from Unity Technologies shared with Mobile Marketer. The developer of software tools to create video games said ad impressions surged 57% over the pandemic period.
- Mobile gaming activity rose 17% during the early days of the pandemic in the U.S., Unity found. Among mobile gamers who watch ads, the average number of ads viewed rose 14% to 3.8 a day. In-app purchase revenue growth for mobile games jumped 24% to record highs in March and April, exceeding levels typically seen during the holiday season.
- Effective cost per mille (eCPM) for the average ad in a mobile game fell almost 20% in late March from a Jan. 1 baseline amid a dip in brand and non-gaming marketing campaigns. Meanwhile, the volume of ads and conversion rates increased. ECPMs typically decline in the post-holiday period before leveling off in March, per Unity. The study is based on mobile games that use Unity's monetization platform that helps 60,000 game developers make money from more than 300,000 game titles.
Unity's findings suggest the mobile gaming industry experienced a similar system shock as other digital media channels in response to the pandemic, where ad revenue growth fluctuated even as activity surged among homebound consumers. The coronavirus led to a spike in ad revenue and impressions on mobile devices for the gaming category, with the jump in ad volume making up for a decline in eCPMs as many marketers suspended or delayed ad campaigns during lockdowns.
The study's data indicate that mobile gaming ad revenue growth peaked in mid-April before drifting downward. It's too early to tell how the lifting or easing of lockdowns in the past month have changed that growth rate, though it's possible it will fall back to historical norms as people leave their homes more often and spend less time glued to screens.
Other gains made in mobile gaming over the past few months have been impressive. The click-through rate (CTR) for mobile gaming ads — an important indicator for game developers who are seeking to drive app installs — spiked 34% during the pandemic. CTRs usually hover in the range of 1% to 2%, and even small changes to that rate can translate into significant differences in app installs, according to Unity.
Instead of declining in February and remaining lower, CTRs were mostly flat before making a leap in March as health officials declared that COVID-19, the respiratory illness caused by the novel coronavirus, had become a pandemic. As Unity notes, the uptick in CTRs was comparable to the holiday season, when people are most likely to download games.
Mobile game developers also had an opportunity to acquire new users at a lower price than last year. The average cost per install (CPI) for mobile games plunged 33% during the pandemic's early days as non-gaming advertisers withdrew from the ad marketplace, leaving fewer competitors vying for attention among mobile consumers. The reduced demand for mobile advertising is a double-edged sword, however, especially for developers that sell ad inserts in games.
Lower CPIs are good for game developers seeking to expand their user base, but bad for those that monetize game content with advertising, Unity explained. The market dynamic suggests game developers should focus on driving app installs at a lower price, setting the stage for future growth in ad revenue among a larger user base.