AppLovin has been around since 2012, but really exploded onto the e-commerce scene in November 2024 with their announcement of e-commerce ads.
Think about it this way, AppLovin used to serve ads for Angry Birds while you were playing Candy Crush. Now, they’re serving highly targeted ads for direct-to-consumer (DTC) brands in apps & games – driven by AI.
You saw this move right in their lovely stock price:
Back in November ‘24, I had to dive in and see what this was all about – so I met with a founder of AppLovin and began running some tests with clients on it (see some results below).
I’ve put together all the research to get started so you don’t have to.
What are AppLovin Ads?
Simple, these are ads that go over mobile games (they take over the entire screen). Think Candy Crush-style games, here’s an example:
If you’re thinking “are you kidding, do these ads really work?” Trust me……I thought the same thing, and yes, they do for certain clients. I’ll dive into what audiences are performing best below.
How many people are mobile gaming?
1.4 BILLION people are mobile gaming every day, with usage 2x the size of TikTok.
It’s important to remember that AppLovin has been around for years and commands 42% of the mobile gaming market. They’ve rocketed to a $100bn+ valuation.
Thus, this isn’t a company that’s a brand new startup. They’ve been doing this for a long time but are merely allowing their platform to serve a new type of ad format.
Is this driving real revenue, or just view through garbage?
AppLovin tracks revenue 2 ways – 0 day click or 7 day click. No view through revenue is even tracked or reported on here. I’m finding that most purchases happen within 24 hours, meaning 0DC revenue is showing similarly to 7DC revenue (surprisingly).
Here’s what one of my clients pushed in revenue from this in just 6 weeks ($1.2mm!):
Actually mind-blowing that this works. In fact, AppLovin outperformed Meta’s ROI in roughly half of the tests I ran in less than 30 days – and it quickly became the #1 or #2 source of traffic.
What’s the audience for AppLovin?
AppLovin’s audience is 60% female, with the average age being 35-40.
However, it doesn’t mean that businesses that serve ads to men don’t work. What I’ve found is that they’re just not as scalable, as the ROAS on a slightly older female audience tends to perform best. If that’s your target audience, this could be a huge opportunity for you.
How does the AppLovin algorithm work?
AppLovin funny enough doesn’t target based on gender, income, etc. (the traditional audience demographics). Instead, they utilize data on customer actions primarily.
For example, if AppLovin knows you click on an ad and bought water, they will serve you an ad about water filtration.
AppLovin is using sort of a traditional lookalike model. Once you get 10 conversions per day, they take the behaviors of the people who have been purchasing and find similar people with similar behaviors.
Funny they call everything “AI” these days…but this one isn’t rocket science.
What creative do you need to run on AppLovin?
You can straight up give AppLovin your creative from Meta & TikTok. All 9:16s are perfect.
UGC tends to work best in my experience, but I also recommend providing static or carousel images/creative (or as AppLovin calls it, “End Cards”) to round out the account as different ad types may serve to different audiences at different times.
You can find detailed creative information with inspiration here – https://www.applovin.com/dtc-creative-best-practices/
AppLovin recommends testing 5-7 new creatives per week, and I’ve found that this is exactly right. You’ve really got to have a nice creative machine running to make AppLovin successful. If not, Digital Position can help build you that machine.
Example End Card from AppLovin
How do you manage & segment performance?
Right now, so much of AppLovin’s performance is dictated by the continuous creative conversation we have with our clients. I recommend regularly testing ad creative, promos, seasonal creative, etc. just like you would with Meta.
Digital Position then manages key performance levers like budgets, bids, creative rotations, and bid types. For example, we may start with a CPP (“cost per purchase”) campaign and then roll into ROAS targeting once the account has enough data.
To manage the account, you’re looking at a couple grand per month-ish unless you need creative produced for you (simply media buying it).
What type of content will be adjacent to our ads, will we be showing ads on sketchy stuff?
You cannot control exactly where your ads serve at this time, so there is a chance that your ad shows up while someone is using a weird app or some bad game.
However, the one saving grace here is that the AppLovin ads take up the entire screen – they truly feel like you’re pulled out of whatever experience you’re in and are a “separate thing”. Thus, your ads never share the screen with bad content – they may show up over the entire screen.
How do you set up tracking? What data is tracked?
Upon onboarding, you essentially set up a simple tracking pixel in your Shopify or other type of platform. This pixel can be set up via Google Tag Manager (GTM) or a direct install.
AppLovin has documentation on the AXON pixel here – https://developers.applovin.com/en/audience-plus/pixel-validation/
AppLovin doesn’t have data on the consumer (gender/income/etc.), they utilize data on customer actions.
As with any upper funnel marketing spend, it’s crucial that you validate with a post-purchase survey. Thus, before you run any ads on AppLovin, I highly recommend you add “Game Ad” to your post-purchase survey!
How do you get in?
They’re only letting select brands in so far as they build their team. If you spend $600k/mo or more on Meta Ads right now (even if it’s only for a month or 2 because of seasonality), we can absolutely get you in.
If you don’t, then reach out to us and we might be able to get you in anyway – I know $600,000 is a lot. It feels sort of like the wild west right now, but we have a relationship with the company and have been able to get some clients in that haven’t been able to. Then, we can help you manage the entire thing top to bottom.
If you can get in, AppLovin is providing $10k of free ad spend – so why not test it?! There is no minimum you need to commit to spending on AppLovin before you get the credit, you get it immediately.
Why is it so restricted on who can advertise on it?
It seems to me that AppLovin is trying to build some technology & AI support before they roll it out to the masses. This will allow them to scale faster and without a huge team.
Despite being a $100bn company, the e-commerce team is a small and new team to the company.
What does onboarding look like?
I’ll keep this super simple for you, here’s the exact order of operations:
- Go here and sign up – https://dash.applovin.com/signup
- Reach out to us (Digital Position) and we’ll work with AppLovin to get you an onboarding form
- Add “Game Ad” to your post purchase survey
- Sign an I/O that gets generated for you
- You’ll fill out an onboarding form (Google doc kind of thing)
- You provide creative assets to Digital Position team (or we can build for you with additional cost)
- Install AXON tracking pixel & add “game ad” to your post purchase survey
- Digital Position will build the campaign structure & launch the account
- You’ll spend $500/day to start and then refine it alongside your team based on performance
- Once your initial ad credit of $10,000 has been spent, the additional balance is invoiced at the end of each month (payment is via Wire or ACH, credit card is not currently supported FYI)
Accounts can be launched in a matter of a couple days if your team has creative already that can be provided! If you’re looking to get live on AppLovin or just generally need help with your marketing strategy, reach out to us and we’ll chat about what the best solution would be for you and your brand:
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