Appodeal found that AppLovin, for example, saw an average eCPM of $2.77 during Q4 2015 slide to around 97 cents during the first three quarters of 2016, and the same was true for StartApp, which delivered an average eCPM of 59 cents during the fourth quarter of 2015 and an average eCPM of 24 cents as the new year progressed.
Demand is coming from every angle, said Abhay Singhal, CRO and co-founder of mobile ad network inMobi.
“If you’re a brand, you’re trying to finish your budget, if you’re a performance marketer, you’re trying to get on as many devices as possible and if you’re an ecommerce player, there’s so much other media flying around at this time of year that you want to do whatever you can to capture every possible impression in front of the user,” Singhal said.
And performance advertisers tend to spend more during the holidays, said Pavel Golubev, CEO and founder of Appodeal, partly because they want more organic traffic to improve their position in the app stores.
An app’s ranking in the App Store or Google Play depends on the number of app downloads they rake in day by day. Developers are aware that if they’re able to buy enough installs to burst into the charts, they’ll be visible to the masses of consumers unboxing their new smartphones and looking for new apps to download.
In other words, they’re buying the opportunity to be seen, and there’s a clear dotted line between visibility in the app stores during the holidays and a spike in organic downloads.
According to mobile analytics company AppsFlyer, organic traffic spiked around Christmas and New Year’s in Q4 2015, especially on iOS, where gaming app marketers saw a more than 65% increase in organic installs, compared to October and November.
The hope for an organic boost is why a lot of app marketers are willing to accept a lower retention rate on their paid acquisition efforts during the holidays than they would during the rest of the year.
“Retention declines in general as you’re looking to scale,” said Ben Roodman, director of partner development at AppsFlyer, who noted that although app developers are laser-focused on optimization throughout the year with very specific cost-per-acquisition targets around downstream metrics, they’re far laxer during the holidays.
They’ll accept a much lower retention rate because they just want to be at the top of the charts,” Roodman said. “They just want the additional reach.”
That’s not the case at Match, where maintaining ROI on user acquisition is an around-the-year goal, Peng said. Advertisers who play games with their UA strategy during the holidays are taking a gamble – but in some cases, it’s worth it.
“Often you’ll see a lot of gaming and ecommerce advertisers doing the best they can to boost, oftentimes running a lot of incentivized inventory to get up the charts,” Peng said. “The earning potential could be massive, but only if you manage to do it without losing your shirt and paying too much money.”