CPMs are up. Back in March, when the effects of COVID-19 were just beginning to impact the global mobile app advertising market, we were one of the first companies to call out that CPMs were rapidly dropping on mobile ad networks like Facebook, Google, Admob, Chartboost, Unity, and others. Back then, we recommended that advertisers front-load their Q2 spend as we didn’t know how long low CPMs would last. Well, we’re now calling the ceiling — inexpensive social advertising is over, CPMs have dramatically increased over the course of May and June. We believe the markets have normalized or are very close to it. Here’s what is important to know about these events and what you should be doing now to maximize your ROAS.

Maximize your ROAS while CPMs are up

2019 CPM and 2020 CPM Graph

Comparing 2019 vs 2020 January 1 – June 11. As you can see 2020 CPMs have normalized to June 2019. We’ve reviewed metrics from many clients and they follow a similar CPM increase trend.


COVID-19 Impact to Mobile App Ad Spend in March and April

As we’ve seen through our data, COVID-19 and mandatory stay-at-home orders that began mid-March caused a +250% decrease in CPMs, as businesses impacted by the global crises pulled back spending, particularly in SMB, travel, restaurants, auto, B&M retail, and luxury. Also, this created a media buying opportunity on Facebook, Google, and other mobile ad networks for businesses that supported people who stayed home. Such as with gaming, eCommerce, streaming, entertainment, financial, logistics, and delivery.

When required to shelter-in-place, people sought distractions with Netflix, YouTube TV, Hulu, and of course, they played games and spent on entertainment. Additionally, delivery apps such as for grocery shopping and food delivery rose during this period.

As regions have begun to open back up for services and travel, we’re now seeing the market recover and CPMs dramatically increase. For instance with the client data just below, you’ll find CPMs rose from $5 to $10 over the course of May 2020, over a 100% increase.

Particularly among apps that monetize with purchases, we’re seeing cost-per-installs (CPIs) increase with CPMs vs apps that monetize with ads, where we’re seeing their monetization increase with the rise in CPMs.

January 1 – June 11, 2020. COVID-19 reaches global critical mass and begins impacting ad CPMS in mid-March. Customer #1 with $7M worldwide ad spend.

CPM COVID January 1 - June 11, 2020 Graph

January 1 – June 11, 2020. Customer #2 with $12M ad spend. CPMs reach a low of $6.11 in March due to COVID-19 and have risen to $17.41 in June (284% increase)

CPMs Are Up Graph

January 1 – June 11, 2020. Customer #3 with $900K US ad spend. CPMs were $35 and dropped to $12 during COVID-19, and then rose back to $35 in June (291% fluctuations)

CPMs Are Up Graph

January 1 – June 11, 2020. Not all clients are increasing. Customer #4 with $1.5M US ad spend. Notice the lack of CPM increase in May and June with a relatively steady spend.

CPMs Are Up Graph

April 24 – June 11, 2020. Worldwide average CPMs rose from $8.80 to $16.90 between April and June (192% increase).

CPMs Are Up Graph

So What’s Next?

Based on data trends, we’re just about back to business as usual for mobile app advertisers. This means that Artificial Intelligence (AI) behind the leading ad platforms algorithms will continue automating key elements of media buying to maximize profit. Since the algorithms optimizing media buying have gotten better, it’s leveled the playing field for advertisers big and small so that they can all operate with increased efficiency.

But, there’s one area that AI can’t automate yet, and that’s creative. As such, now, creative is the key differentiator that is driving UA.

With the return to normalcy of CPMs, it’s time to get back to the hard work of optimizing creative. And, while quality and volume of creative are key factors in success, we’ve discovered that they’re not the only factors that drive profitable UA. Monitoring creative trends and doing an in-depth competitive analysis is a must within any UA or creative team today.

Creative trends change quicker than fashion and vary across genres. While it’s good to know broad creative trends, you’ll also want to hone in on your particular niche and overlay all this with actual performance data. We want to chase trends that boost ROAS, not just chase every trend that comes along. 

To get you started, we’ve developed seven genre-specific creative trend reports. You can also find individual creative trend reports, such as for Social Casino Games or Match 3 Games.

CPMs Are Up Graph
Comparing 2019 vs 2020 January 1 – December 31. Customer #2 trends. If the remainder of 2020 behaves like 2019, we would expect CPMs to continue to rise through mid-July and then drop through August. How the lack of travel and summer vacations or the potential re-emergence of COVID in Fall will impact these metrics is anyone’s guess.

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