If it’s growing well, why are my eCPMs declining?

In the past, I frequently wrote and presented about the opportunities in ad and hybrid monetization. This led to questions like, “If it’s growing so well, why are my eCPMs declining?”. Such questions are challenging to answer, but it’s important to understand one key point. Ad monetization has wider adoption and lower concentration than in-app revenue. This means the barrier to entry is lower, and the potential for competition in the long tail (when we simply add ads without innovation or a strong data-driven approach) is even higher than with in-app purchases.

Here’s data comparing Data.ai (in-app revenue) and Apptica (ad distribution) among top 1000 games and apps on iOS and Games. While comparing different datasets isn’t straightforward, and tools have limitations, the difference is quite apparent. Data inludes worldwide data for 9.2023-8.2024 (last 12 months).

Once again, ad and hybrid monetization offer substantial revenue opportunities, but it’s no longer about “just adding ads” to the game or app.