App publishers tend to frequently block direct competitors from advertising in their app solely based on a gut feeling. It seems logical not to show competitors’ ads to prevent traffic loss, doesn’t it?
Surprisingly, direct competitors are not necessarily stealing your traffic away. SOOMLA, a market leader in mobile ad measurement, has released Ads and Churn Case Study report, an in-depth analysis of the effect of advertising direct competitors and their relation to eCPM and churn rate. The report illustrates the case of Lotum and their chart-topping casual word puzzle game called ‘4 Pics 1 Word’.
Utilizing a data-focused approach, SOOMLA has provided some insights on Lotum’s advertisers’ performance. These outcomes can be considered and applied to the whole industry:
1. Specific advertisers can churn 3 times more users than others. Not being able to see this data can have a drastic impact on retention.
2. Direct competitors were churning slightly more users — 11% more than the average while some advertisers were churning 200% more.
3. Advertising direct competitors resulted in 3X higher eCPM in some cases. The eCPM of Lotum’s direct competitors was between 90% (1.9x) and 216% (3.16x) higher compared to other games in France and Germany respectively.
4. Direct competitor blacklisting should be evaluated on a per country basis and not globally as it is normally done today.
🔎 Also, you might be interested in our recent case study on one of the most popular shopping lists — Listonic: How a Utility App Doubled Revenue by Monetizing Unsold Ad Space.