AppLovin’s E-commerce Revolution: A New Era of Customer Acquisition

Every 4 years or so, a new customer acquisition channel with great scale disrupts the e-commerce landscape. The rise of TikTok marked the last such breakthrough in 2021, but today, all eyes are on AppLovin as it transforms its gaming inventory into a powerful new e-commerce advertising platform.

The AppLovin Advantage

AppLovin dominates mobile gaming, owning a vast portfolio of games and the ad auctions that power their monetization. Historically, their business revolved around in-app advertising for game downloads — a $3+ billion annual revenue powerhouse. This success is rooted in their control of both the supply side and demand side. AppLovin acquired MoPub in 2022 from Twitter, integrating the leading mobile supply side platform (SSP) with their existing ad network to create a seamless, vertically integrated system.

Now, they’re opening up their ad inventory to e-commerce brands, providing a fresh way for brands to reach consumers in a context where they already spend significant time and, often, money. For brands, this means access to previously untapped ad inventory in mobile gaming.

Early Success with E-commerce Ads

Fairing has introduced several brands to AppLovin’s new platform, and the results are compelling. These brands are scaling rapidly, with some already investing tens of thousands of dollars per day in ad spend. AppLovin’s model is built on a cost-per-result model, meaning it optimizes on actual purchases not simply an impression. A model that e-commerce marketeers who spend on Meta are familiar with.

So far, the influx of e-commerce advertisers hasn’t disrupted existing CPMs for mobile game advertisers — meaning AppLovin is most likely doing a great job of monetizing users who weren’t responding to game download ads. It remains to be seen whether this balance will hold as more non-gaming brands enter the ecosystem, AppLovin’s auction dynamics suggest they are well-positioned to accommodate both markets. Long-term, we wouldn’t be surprised if non-gaming advertisers account for the majority of AppLovin’s revenue given e-commerce advertising is larger than mobile.

Audience Insights

AppLovin’s gaming inventory typically skews toward a female audience aged 25–45, making it particularly effective for certain female-focused verticals. However, scaled success from other verticals suggest AppLovin has a much broader appeal. Right now, we’d recommend this channel for most, if not all, verticals.

The Ad Unit

The current AppLovin commerce ad units are analogous to the creative you’d see on Meta, but with one big difference: they command the user’s full attention, as skipping isn’t an option. While there’s definitely potential for more interactivity down the line, it’s clear the current offering is performing quite well.

Enhancements to their ad manager and creative capabilities could further boost click-through rates and overall performance.

Measurement and Attribution

AppLovin’s measurement relies on a pixel-based system, embedding a script on the brand’s thank-you page to track purchases via client-side API calls. While they’re working on a server-side Conversions API (CAPI) integration, the current setup clearly provides sufficient data to give brands confidence in scaling their ad spend.

Leveraging Attribution Surveys

For Fairing customers, attribution surveys have been instrumental in validating this new channel. Consumers have little difficulty identifying mobile games as their discovery source, making it easy for brands to track AppLovin’s impact. This is a significantly more deterministic method of attribution, different from the likes of last-click attribution that have showcased various flaws.

In the below chart, we analyzed responses from post-purchase attribution surveys across roughly 2000 brands, focusing on responses including “game” from the question, “How did you hear about us?” Over most of the year, mentions of “game” were relatively low, but in October, there was a noticeable spike. This suggests that, across Fairing customers, more customers are discovering brands through game-related channels. The consistent volume prior to is most likely ad inventory bought through exchanges like The Trade Desk — it clearly was not producing incredible scalable results.

As of today, “Game” mentions are typically not in the standard list of response options in a Fairing customers' "How Did You Hear About Us" (HDYHAU) surveys — I’m sure this will change in the near future. The majority of “game” mentions were categorized under “Other”. Respondents often directly referenced games, with “Game ad” being the most frequently used term.

Thus, we recommend adding “Game ad” or “Mobile game” as an option in your HDYHAU survey. If you’re not yet advertising on AppLovin, but plan to in the near future, we’d recommend adding it today. This will help establish a baseline and prepare for future campaigns.

Difficulty in Accurately Tracking Mobile Game-Driven Traffic

When comparing HDYHAU response data to last click referral sources & UTM parameters, we find quite the discrepancy. As with most channels, relying on a last-click model to measure AppLovin’s performance is not advised.

In our analysis, we found that:

• 80% of mobile game-driven customers are misattributed — meaning click-based tracking doesn’t capture that they came through a game.
• 28% of mobile game-driven customers have no tracking data at all — meaning we can’t identify their source via click-stream data.

This indicates that UTM parameters may overlook a significant portion of mobile game traffic and last-click attribution is not a recommended measurement methodology alone. Post-purchase surveys help us gain a clearer understanding of this channel’s impact.

After AppLovin, the top channels identified through last-click UTM parameters are Facebook, Google, and Klaviyo (email).

A Bright Future for AppLovin

Public markets are bullish on AppLovin’s execution, with the stock up over 700% year-to-date.

Currently, the platform targets brands spending at least $10,000 daily on Meta ads, which translates to a GMV of $12–25 million depending on the brand’s reliance on Meta. For now, access is limited to larger advertisers, with self-serve capabilities slated for early 2025.

If you’re interested in exploring this new growth channel, let us know — we’re happy to facilitate an introduction to the AppLovin team.

Upcoming Article

Stay tuned for our follow-up post on best practices for capturing “Mobile Game” as a discovery channel in your HDYHAU survey, including optimal phrasing and actionable tips.

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