AppsFlyer Global Ad Platform Performance Report | Providing the Latest Guidance for Overseas Enterprises

Background:

?

Since 2021, the international situation has been changing rapidly. First, the domestic version of game licenses experienced a winter chill, followed by the iOS new privacy policy, which has caused turmoil in the mobile gaming industry. We can clearly feel that, in the post-IDFA era, the market is still expanding, and new demands are constantly emerging like mushrooms after rain. Going overseas is still the core consideration for Chinese manufacturers.

?

In response to the most concerned issues of those who go overseas, AppsFlyer, the global leader in mobile attribution, has released the "2022 China Mobile Game App Overseas Driving Force Report," which comprehensively reveals the basic trends of China's game going overseas in recent years. Under the background of domestic enterprises accelerating their overseas expansion, finding the "compass" for overseas market marketing is even more critical.

Domestic advertising platforms target global market

?

The rapid growth of emerging markets and the fast development of the Internet industry have led to significant growth in the global mobile advertising market in recent years. However, due to factors such as the pandemic and geopolitical events, enterprises that were once major players in mobile advertising have seen their performance and stock prices decline to varying degrees.

?

In addition to the impact of the economic environment, industries such as gaming, e-commerce, and education have also faced stricter regulatory policies in recent years. Moreover, the internet traffic bonus has gradually reached its limit, and these "golden boys" can only tighten their budgets as revenue and profit growth slows down. According to AppsFlyer's data, in the second quarter of 2022, the mobile advertising budgets of major companies decreased by an average of 12% compared to the first quarter. Among the top 20 mobile advertising platforms, 14 of them cut their budgets in the second quarter.

?

Therefore, the advertising business revenues of most internet companies are contracting. Tencent's advertising business revenue in the second quarter fell 18% YoY to RMB 18.6 billion, while the YoY growth rate of Kwai's advertising business revenue has declined for eight consecutive quarters. Meta's advertising revenue in the second quarter decreased by 1.50% YoY, and although Google's advertising revenue increased by 12% YoY, it was far less than the revenue growth rate during the same period last year and the previous quarter.

?

In this context, whether domestic enterprises or the advertising platforms serving them, they are all seeking new incremental markets, and "going global" is their common choice. For example, the US version of Pinduoduo "Temu," Alibaba's focus on the Southeast Asian market with "Lazada," and TikTok's overseas version "Douyin" are all examples.

?

Accompanying the "going global" trend are domestic advertising platforms. Taking Mintegral, whose home base is in China, as an example, its business revenue in the Greater China region accounts for around 60% of the company's total revenue, and its overseas clients are its main business component.

"Black horse effect" emerges in Latin American market

?

Social gambling rises against the trend

?

Other categories show a slowdown

?

In terms of game categories, there are mixed results. According to the report, both mid-core and casual games have shown varying degrees of decline, especially for heavy games, which have decreased by 40% year-on-year in the past year and a half, with a particularly significant drop of 69% on the iOS side. All of these have a lot to do with the privacy policy introduced by iOS.

?

Looking back at the past five years of China's mobile game apps' overseas journey, they have gone through regional structural changes. The report points out that although the United States has always been an important market for global mobile game applications, data shows that its market share in the US has dropped by 12% compared to the previous year, from a slight decrease from 17% in the third quarter of 2017 to 14.85% in the second quarter of 2022.

?

In contrast, the gaming market in Latin America and Southeast Asia is eye-catching. In the past five years, the Latin American market has shown a clear "black horse effect" - compared with five years ago, China's mobile game market share in the region has increased by 83% year-on-year and will continue to maintain significant growth in the foreseeable future. The Southeast Asian market has shown relatively stable growth and decline trends within a reasonable range.

However, in the past year, social gambling games have seen a 21% year-on-year increase in overall advertising spending, making it the only category among the four major game categories included in the statistics to maintain a positive growth momentum. In addition, from the chart, we can clearly see that the advertising spending of social gambling games reached significant peaks during the three important marketing nodes of summer, year-end, and spring, which also highlights the importance of "seasonal marketing" for this category.

The global advertising platform is undergoing a reshuffle

?

Advertisers and advertising platforms are accelerating their expansion into international markets, which is shaking up the global mobile advertising market. The most significant change is that the market dominance of the "two giants" is now moving towards diversification.

?

In the past, Meta and Google almost monopolized the traffic in the overseas advertising market. It wasn't until the second half of 2020 that another giant, Apple, entered the industry. In April 2021, Apple introduced its privacy policy, which requires developers to obtain user consent before accessing their data. This policy has reduced the willingness of users to click and convert, as most people are instinctively reluctant to allow their data to be tracked.

?

Data shows that after the release of Apple's privacy policy, the overall market share of Meta Ads and Google Ads has declined compared to the previous version and the latest version of the report.

Due to the massive user base of the two giants, the platform often dominates the advertising process based on this traffic foundation, such as having its own algorithm, advertising push, targeting logic, and billing methods, with low transparency. For advertisers, this is like building a "fence", which means they can only rely on the platform's feedback to judge marketing effectiveness, resulting in higher investment costs. Therefore, compared to the more "closed" giants, "third-party platforms" with higher transparency are accelerating their rise. According to the 15th edition of AppsFlyer's "Comprehensive Performance Report of Advertising Platforms", the rankings of third-party advertising platforms have risen significantly compared to the decline of Meta and Google.

First of all, "third-party platforms" do not have their own products, which is different from the setting where Meta and Google are both traffic distributors and traffic platforms themselves. "Third-party platforms" have no bias in the traffic differentiation mechanism, but instead specialize in aggregating traffic, including the network alliance platforms of top internet companies such as Google AdMob and Meta Audience Network. Secondly, "third-party platforms" mainly dock fragmented mid-to-long-tail traffic through programmatic trading. This open internet ecosystem has high transparency and supports third-party attribution and tracking monitoring, allowing for more evidence-based delivery effectiveness and improved delivery efficiency, resulting in higher cost-effectiveness for advertisers. Different platforms have their own focuses and advantages, and advertisers can choose different delivery platforms based on the category attributes of their products.

?

In the field of going global, AppsFlyer's "Comprehensive Performance Report of Advertising Platforms" provides such guidance by ranking various media channels in the advertising industry from the perspective of a "referee", providing more objective and neutral data references for advertisers. Although the "fast lane" of the internet has gradually disappeared, opportunities in segmented tracks still exist. For advertisers, using the "data" behind advertising platforms well will enable them to find brighter "guiding lights" on the road to exploring overseas markets.