Latest / Mobile Signal / Duopoly Special: Meta Is Pricier. Google's Network Is Back. Blame Better Targeting.

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Duopoly Special: Meta Is Pricier. Google's Network Is Back. Blame Better Targeting. · Mobile Signal

• Josh Chandley: Greetings and welcome to Mobile Signal. It's a Duopoly special. Google's network grew for the first time since 2022, Meta's US ad prices are up 23%. Do advertisers even care? And a listener asks why big studios split mediation and what it costs to copy them. I'm Josh Chandley. Joining me Is Vincent: Vincent S. Yeah, fifty two Entertainment. Warren (Upptic): And Warren Woodward, a co founder and CGO at Uptick. Josh Chandley: Thanks for being here as always. Google's AdMob grew, but they didn't say why. So Google Network, the ads Google sells inside other people's sites and apps grew 1.4% last quarter. That doesn't sound exciting, but it's their first growth since 2022 after 16 straight quarters of decline. Vincent, what's your take? Vincent: Yeah, so first, I think it's the first quarter that, the percentage of revenue coming from search was below 50%. I believe on Q3 was 49%, you know. So it's a slow, essentially, diversification, right? in a nutshell. Google is obviously known for search, and now they have so many other business lines. I mean, I think cloud and the YouTube business lines did really, really good. And then, yeah, indeed you had the network, which for the longest time or I don't know how many quarters, was year over year, you know, declining. And this time around, indeed, it was up. And so, you know, can wonder, well, I I guess as gaming publishers, this is this is where we collaborate closely with Google, third party apps. This is essentially your apps, Josh, and my apps. and did we really see an uptick of performance or shadow fallet ad mob spend? You know. not really. so the first assumption is obviously, well, third party apps, which is the network. Well, Google has a mediation, right? The admon mediation. And we all know Google is doing a push for the past, I think, year, year and a half to essentially win some market share back. a lot of announcements, a lot of events, a lot of news. I don't know if it's successful really, so I'm not sure the Stabilization or growth of network comes from ad mob winning market share. the second assumption is essentially ad mob network growing and winning more impression, essentially in Applevin Max. same here. I'm not sure that's the answer. So my other assumption is essentially so if you look, you know the fine details, the network is ad mob, Google Ad Manager, and AdSense. So the last bet is potentially Google Ad Manager, which is operating in CTV. And we all know CTV is a hot space. so that would be my assumption. Potentially some growth on the supply side with Google Ad Manager being adopted by, TV channel, traditional or digital, native channel adopting Google Ad Manager and, essentially bringing more transactions. Josh Chandley: Quick, quick follow-up there. So you mentioned ad mob mediation, which is a part of the network segment. I'm not sure how much traction it's gained in in gaming over the last year and a half, but where is that mediation strong and where is it historically struggling? Vincent: So from what I know, and and I guess you know it's like common knowledge, AdMob is obviously very, very good with Google Demand. And so Google Demand, you have all the long tail AdWords, you know, the plumber next door, as well as the big brands through programmatic and DV three sixty. Obviously, they buy in any you know, in in a lot of exchanges and stuff, but obviously they have a preferred pipe which potentially would be their, own network. So brand demand, very strong. Obviously, banner, If you have a decent amount of revenue coming from banner, ad mob is going be good and potentially ad mob mediation. And then the last thing, we all know Google is very good at is monetizing tier two, tier three countries. So that's the network where you have the largest global footprint of demand, where other networks cannot, rival and monetize in again, tier two, tier three countries. so for all those reasons, AdMob is a very strong network and then AdMob mediation, then you can talk about, the features, which is way more open than many, many other mediation. But then obviously we all pick our mediation based on APDA and that's another story. Josh Chandley: Yeah, and it's also I think I would say that ad mob is the pervasive mediator for non-gaming apps. Whereas on on for gaming specifically, really Mac still dominates by App Loving. Vincent: One percent. Josh Chandley: Warren, what are your thoughts? Warren (Upptic): Yeah, I I I think I agree with the bulk of what you guys both said. I think thinking about this topic, the the other thing that I have really been thinking about from, our our team at Uptick more on the UA operator side. one thing that I haven't seen discussed much here, the the network flipped here. and you know, we saw we we saw growth and Google noted in the earnings report this was specifically because ad mob grew enough to beat The decline in AdSense, which is the the web side of things. So when we go to why, I think there is at least one piece here that is based more on the demand UA side of things. the plausible Vector that that I am thinking about and what's changed for our business the last couple of quarters, trending with how we interact with Google for UA is iOS is finally coming back online as a more reliable contributor. To a kind of a balanced UA portfolio, Google Ads iOS specifically, to be clear. It only took them, what, about six years to rebuild the product. And, you know, last year, I believe it was like June or July 2025, Google launched ODM on device measurement as a new attribution method for iOS UA. Before this, it was essentially a non viable product. so between that launch of ODM last year and both the adoption of developers from a technical standpoint. education about this of how to use it and just the trained habits of UA teams to start considering Google iOS. Google ads Google ads iOS as val as a valid UA channel. It's back on the board now. And so I don't know I have no hard data to show this is the driving Vector, but it is a fact that this is something that existed in the last quarter or two that's slowly ramping back up that was essentially like a non viable part of their ecosystem. So that's gotta be at least a contributor. The amount that this is contributing I don't know, but when you go from essentially the iOS UA ecosystem cannot interact with your ads product to now it can in a semi viable way, that's a big step change. And I think we'll continue to see this grow and improve quarter over quarter. Josh Chandley: In a semi-viable way. so are you saying that you can see are you Warren (Upptic): Faint praise. Josh Chandley: saying that you can see attribution in your MMP Apps Flyer or just singular from Google on iOS? Warren (Upptic): Yes, if ODM is correctly implemented, yes. But it's not as plug and play Josh Chandley: Yeah and Warren (Upptic): as yeah, as as other solutions. Josh Chandley: Yeah, I think you're referring to Meta that launched last summer. And that was, I think, received very well what I would say about them both though is that neither yet are bidding outside of their O&O as far as I'm aware, they've made no announcements there. Meta has scaled probabilistic non-IDFA bidding on iOS in their family of apps. And I believe Google is starting to give us access as a search in YouTube. Is that are those the two primary pieces of traffic there? Warren (Upptic): I'm not sure about that. I don't want to misspeak on this. my understanding of it was that it's participating in the whole iOS pool of inventory, including network, but we should probably fact check this. Vincent: That's my understanding as well, yes. It was not restricted. Josh Chandley: Hmm, interesting. Okay, maybe I'm wrong. So do you both think ad mop is driving growth here, or are you not on the same page? Warren (Upptic): Well, I can Vincent: Go ahead. Warren (Upptic): tell you what the 10Q says. So yeah, I I just just Josh Chandley: Yeah. Warren (Upptic): fact fact checking myself and my assumptions. so I think the specific report from the 10Q was Google network revenues increased 101 million from the three months ending September 30th, 2025 to the three months ending September thirtieth, twenty twenty six, primarily due to an in an increase in ad mob revenues. The overall increase partially offset by a decrease in adsense revenues. and then elsewhere they reference, I think, the downtrend of the prior nine months. but they said it was primarily due to an increase in ad sentence revenue, partially offset by an increase in ad mob's revenue. Josh Chandley: So what is AdSense revenue, guys? Just for the listeners. Warren (Upptic): That yeah, that's that's the web web based monetization. Vincent: It's ad mob for web. And as we know, traffic, yeah. Apps. Correct. Yeah. And yeah. Yeah, yeah, yeah. Josh Chandley: And then ad mob is for for apps and games. Yeah. Warren (Upptic): Yeah, thank thank you for making us clarify. Forget everyone else is not Josh Chandley: Yeah. Warren (Upptic): UA degenerates. Josh Chandley: So apps and games are up. Yeah. Yeah. Yeah. W web is down. Vincent: Yeah, but again, I think yeah, in the earning, I think it was pretty clear, you know, the that essentially Google switched to an AI chatbot world where they really capture the queries, you know, the search queries for for a few years and essentially since you know since Chat GPT are making some noise, people were like, wow, so we're gonna stop, you know, using Google as a search engine. Well, actually, as you know, they have the AI overview and AI mode. Which essentially is an answer where you can essentially i interact, right? So users kept their habit to go to Google and ask questions. And now you just start talking on Google.com domain instead of in your chat bot or chat GPT. So they capture the queries. Problem is, and for the longest time, that's a problem, between Google and website is the traffic going to websites, particularly media, where you monetize with ads, is obviously going away. And it's not, recent. It's been years that the referral traffic for any media on the HTTP, on web, is down. And so that's why, the monetization on those websites is down too. And this is what AdSense is powering. So it just makes total sense. There's no surprise here. Josh Chandley: Interesting. Okay. I wanna I wanna pick apart CTV. So YouTube now I believe made over $3.7 billion a quarter just on TV screens. And so that's that's Google selling its own inventory to its own supply. Network is the other half. Google selling ads on other companies screens with TV partners like MLB and and NASCAR. through ad manager. Vincent, you you pointed to ad manager a little bit. is it big enough to explain this quarter's growth too, or is that just a rounding error? Vincent: so I think it's I think it's instrumental because again the CTV space is really and it's not new, it's been five years, but you know, more and more. I think the recent announcement is LinkedIn you know, being accessible via programmatic, LinkedIn having some video content as well. and so I think yeah, ad mob is doing well, well there. Sorry, Google Ad Manager is doing well, you know, gaining publisher clients to monetize. And obviously they can buy, with closed ecosystem with DV360, right? So you secure a good access to demand. and yeah, my again, from a gaming perspective, I don't see ad mob making huge waves right now or changing their shut of wallet. So it has to be on the Google Ad Management side that there is some kind of growth that helps stabilize. because again, the growth is not massive, right? It's just like stop bleeding and stop declining year over year. Josh Chandley: When do you both believe CTV starts to go mainstream for app marketers? Warren (Upptic): We're seeing it already in a few different ways. it's been a very slow, slow crawl. But there's kind of three factors that our team thinks about as far as like why we're seeing more CTV represented in both our our our own spend and the industry overall from a UA side. the first Vector is it's just getting dumbed down and easier to use. So when CTV launched for a lot of these networks, you're kind of on your own to measure it. It it took the C T V ad networks multiple years, first of all, to have any kind of integration with the leading MMPs. and then to have an integration with the MMPs that the average marketer could understand and make sense and compare side by side. so that has become strump simplified and streamlined. now I'll The leading CTV networks can plug directly into the leading MMPs. but it's still a blunt instrument. The measurement methodology is not traditional last click, it's not apples to apples. but there is a number that populates in the MMPs that didn't before. So that's kind of step one. Step two is the teams themselves getting smarter about how they're measuring using media mix modeling, incrementality models to adjust how they're factoring in CTV and get a more True, true-ish read of the impact for it. and then the final and probably least talked about aspect of why CTV continues to grow is simply that people don't know that they're buying it. So it's very common. This is like the number that yeah, this is one of my my endless soapboxes. Vincent: So true. Josh, you're already doing CTV. You you don't just don't know it. Warren (Upptic): This is one of my biggest soapboxes. One of Josh Chandley: Well, on on YouTube? Okay. Okay. Warren (Upptic): my biggest soapboxes is most people do not understand what they're buying. so like most DSPs are plugging into multiple different channels and types of inventory that you are probably unaware of within this is varying levels of C T V. So there's a lot of C T V being bought by teams who d do not even realize that they're buying C T V. So that's probably the third contributing Vector. Josh Chandley: Yeah, it's funny. It's like it's a you call it dumbing it down for the media buyers, but it's also that they're smartening up their their systems. the attribution and the measurement, where where do you feel that is? If you run CTV now and you're also running in app ad like campaigns like with App Love and In Unity, let's say, is that is that install number true, close, or is it still low? Because historically the issue has been under attribution, right? Warren (Upptic): Yeah, I'm seeing there's not uniformity in how teams are measuring this. the high level guidance I would give, especially maybe an analogy I could make that more people are used to is like when we buy as mobile marketers, when we buy Apple search traffic, we know that we need to usually discount or modify that in some way. because it's not it's not apples to apples as far as like true incremental net new users. CTV you should approach with a similar mindset. it's not being measured in the MMP in an equivalent fashion. And most smart teams are implying some sort of internal enrichment normalization modeling on top of it, and then comparing that modified output. what does not exist yet is sort of agreed logic that is used across the industry for measuring the success of CTV. Josh Chandley: Interesting. And the other thing that seems young, I'll call it to me, is targeting. the the extent to which you can drive much higher cost per installs, much higher RPU users. It do you agree with me or am I just out of date on my knowledge? Warren (Upptic): So specifically targeting within C C T V traffic? Josh Chandley: Yeah, a Kati Rowass campaign or day twenty eight campaign. Warren (Upptic): Mm-hmm. Mm-hmm. it's an area where I don't claim to be an expert, but you know, the the infrastructure servicing most of these networks is the same. Beeswax DSPs are similar that are, you know, is powering a lot of the traditional DSP ecosystem and able to leverage a lot of the same targeting techniques for traditional traffic with some caveats and breakage that are different from traditional mobile inventory. So I think it's I think it is evolving. We're not doing like my early CTV experiments were. super painful. It it was essentially buying TV ads with additional steps and similar results as far as efficacy. But like even when you saw things were going very badly, you were kind of like hard committed to these flat buyouts. And this was like, you know, 10, 10 years ago-ish. So we've come a long way from that as far as like the targeting feeling a lot more like traditional mobile performance targeting, but it's still not fully apples to apples. Josh Chandley: Vincent, I kinda saw you shaking your head at me. Vincent: Yeah, again, C T V is huge and again it's it's really a a a market maturing before our eyes and it's been five years and now it's kind of getting there, but not necessarily for app downloads and and us, you know, or game or app performance, let's say. First and foremost, you know, it's gonna be the retailers, the traditional brands, e commerce. I mean, if you if you turn on recently prime video and I'm I I think Amazon is doing an amazing job. you have a lot of ads, you can in just one click put that in your basket. So then on your phone, it's in your basket, in your Amazon app. The experience is tremendous and it's all retail, obviously. You know, Amazon clients having their products on Amazon doing CTV. obviously on YouTube you have kind of similar goal of experience and on any other kind of connected, you know, channel you're gonna watch. Problem with obviously apps is attribution. I don't believe there is any ad ROAS possible. And attribution is all based on IP address, which obviously in the US, all good, outside a little bit more difficult. So for me and for gaming performance, it is not yet there. And yes, you can do incrementality, you know, mix modeling measurement. but yeah, I didn't really meet any gaming publishers. scaling that and C T V becoming a one of his main, UA channels. Warren (Upptic): Vin Vincent, you touched on a good point, which is like within gaming, who should be interacting with this and who should be avoiding CTV, kind of in its current incarnation, if any. I can say like we see successes within our portfolio, but it's very specific, right? I think to your point, the average mobile game that's like original IP, it's probably not going to work for exactly the reasons you said. Where we have seen success is where there is large mainstream IP associated with the game. where that's gonna overlap more naturally with the more not the more non-gaming audience it's gonna encounter typical CTV traffic. those are the corner cases we're seeing where it's like, hey, this actually appears to be sustainable for investment. and a lot of traditional gaming tests still fall short in our experience. Vincent: remember three four years ago aplovin acquired a ctv platform world w url and you don't hear about this anymore right so that's not a good sign if Josh Chandley: Why is that? Vincent: if if applovin can already crack it I don't know who can for for gaming clients right Warren (Upptic): Just roll it up and hide it in the DSPs. That's all you gotta do. Josh Chandley: Okay. I want to talk about search before we move on from Google. So search revenue slowed from a nineteen percent growth in Q1 to 12% in Q3, while search queries grew at the fastest rate in five years. So more searches, slower revenue growth. Is that a timing problem that Google fixes by scaling ads over time? Or is there some ceiling set by chatbot rivals with a lower ad load? Vincent: So I think we mentioned earlier, I believe the common knowledge is Google did their transition and capture, you know, the queries in a chatbot world. That's good. retain your user habits and the retention and you keep going to Google because now you have some kind of AI experience that, you know, before it was like, Wow, it's only on Chat GPT. Now it's on Google, thanks to Jim and I. And Jim and I seems to be really a strong product, right? The next topic is okay, how do I monetize that? And if you check recently, the AI overview and then the AI mode is awesome, but you don't really have much placements or sponsored links and things like that. So it's about creating the advertising product. How do you insert an ad in a chatbot-like experience? And everybody right now is still trying to figure that out, chat GPT. is still trying to understand how do you keep the trust of your consumer and still kind of monetize this traffic. And I believe that's the answer. You know, more search, yeah, that's great. but now they need to figure out how to monetize that because the the AB DAO or the the level of monetization is lower on those kind of footprint or placements, meaning the AI answers. Warren (Upptic): Yeah, I think Vincent hit on a lot of the key things that I'm thinking about on this topic as well. But maybe just to zoom out and kind of frame this in the macro environment of what's happening with the competing chatbots. so I think one thing we need to think about is that for all of the leading labs, the consumers using these chatbots, each customer in general is still a loss leader for these businesses. they're taking a loss with each, especially free users, right? and it's the land grab phase. there are competitors, OpenAI and Anthropic are you know working towards IPO, they want to grab market share. That's I think mission number one right now. so what this means is there's a problem where if your competition is willing to take a loss on each user, and in pursuit of you know providing a great user experience, they're gonna be ad-free or ad light. as possible. Monetization is gonna come later. So if Google wants to compete with their chatbot, they sort of have to enter this arms race. I'll disagree with Vincent slightly as far as like the strength of Gemini. I think Gemini has some unique strengths, but I think in many ways it's behind Cloud and chat chat GPT. And at at the least, I don't think you can make a case that Gemini is so much better that you can bury your user in ads and they're gonna still prefer to use it. Over the largely ad-free offerings. I know OpenAI is launching ads, it's still very, very early in that sense. So th this also means that they unless they can provide a vastly superior product in spite of of ads, such as Google Search has been able to do historically, it's currently like Gemini is viewed by most most users that are dabbling in in multiple chatbots as a few steps behind. So in order to monetize on AI assisted search right now, Google has to ask their customers to suffer both a worse UX experience that is ad heavy and arguably a worse underlying product with the current state of Gemini. And I think Google s wisely has recognized this and they're not rushing to monetize their customers right now. Instead they're competing in this land grab for market share. But this also gets to where I believe Google has an advantage. So whereas for all of these companies that are trying to claim market share with their chat bots, for anthropic, for open AI, it's quite painful with each free and each average new user. Whereas with Google, they have Vincent touched on this earlier, but their monetation streams are so diverse that they can suffer the arrows of taking on these free users to claim market share in a way that their competition can't. So you I think it's a strategic move to delay the monetization of this traffic, but they can take the pain of these free users during the land grab grab phase more than their competition can. and eventually these products will have to make money. They will have to become sustainable. and I think when they get to that point, Google will enter that era of chatbots and AI assisted search in a stronger position than their competition. Josh Chandley: I think you're very right, Warren, that Google is like absolutely comfortable playing the long game in almost every market. and so I think you're dead on. what I wonder about is how far off that transition to monetization actually is in this chatbot era. And like whether or not quick query like search count goes down. Is there a scenario where revenue growth could flatline or even go down as this continues to intensify over the next couple of years? Warren (Upptic): My intuition is it's when we see user growth stop. there's always a story you can tell about future revenue and future profitability as long as number go up for users. But I think once chatbot usage is omnipresent and we start hitting a peak of just quarter over quarter user growth, the market will demand that these platforms move to profitability. And that's when we'll start seeing everyone's gotta flip that switch or their stock price will be punished. And by this time also everyone will have IPO'd. and so the markets will be holding them more accountable, I think, for profitability. So that's all to say, maybe Yeah, my best guess is Josh Chandley: That could be that could be years away, right? And and revenue growth Vincent: Yeah, I agree. Josh Chandley: is slowing down now. Is there a scenario where it flatlines for a quarter? I'm this isn't a bear case against Google, but like how how hardcore is competition gonna get, do you guys think? Vincent: So we're gonna address I believe Meta's earning. but yeah, Muse is obviously, is all over the place. in the earning calls, in the news in September. And Meta is pushing super hard. but again, back on Google, my for me, my best example is G you know, Gmail. Gmail was not the first, male service provider. And now it's the dominant player. And for like how many years? Twenty years it was free. And then all of a sudden, a few years ago, it was like, your Gmail storage now counts on your Google Drive storage. you need to pay. So switching after when all your life is on Gmail, which is my case, it's been 20 years, you have no choice. Then now you pay because it's becoming core a core part of your of your life. It's gonna be the same with chat boss, right? Don't worry. So yeah, it's gonna be a long game. And The longer you keep your AI chatbot experience free of ad, you know, you're gonna keep growing your user base. And at some point, yeah, you're gonna switch once your competitors are dead or behind, or that you dominate, you know, the user base. plus honestly, it's it's gonna be super difficult to find and innovate on non-disruptive ad format in a chatbot. And I know OpenAI is right right now, I believe, at the forefront. but yeah, it's not an easy thing to do. Warren (Upptic): Yeah, it's a great point, Vincent. The switch probably flips for the industry at large. as we get dependent and addicted. I think we're in the first era of this with the the first kind of crop of very exciting consumer agents with MetaMuse and Grokbots. And I think this is the at least for me, maybe oversharing, but this is the first time I've starting to find myself building increasing dependencies on on these companies for at least quality of life, convenience, rather than kind of one-off uses. And getting these down to a consumer level where the average person is starting to get benefits and dependencies. And I think agents will be the the on-ramp to this, that's when you can start dictating the terms. Once you have, you know, we're it we're in the like free free samples of heroin phase right now, to some degree. but once yeah Vincent: So true. Warren (Upptic): Once the dependencies are there, you can start naming your price. will it take twenty years? Like with Gmail? My best guess is it's closer to two years. but the the the escalation, the the the acceleration of of adoption for these tools seems to be on a faster trajectory, I think, than the one point zero era of of email. Josh Chandley: So okay, so AI search is eating traditional search. Who gets hurt more by this in in the marketing environment? Is it games? Is it non-gaming apps? is it something else? What's your takes? Warren (Upptic): Yeah. I I think it's very clearly impacting games less. we for us, like Google has only grown as far as like share of wallet this year versus last year, quarter over quar quarter. and it makes sense. Like most people are not discovering the new game they're going to play through through search, because they don't know it exists in mo in most cases. So you know, it it it depends on the segment of gaming you work in and if it's IP based, but I think at large Search on Google Ads tends to be a much smaller bucket of net new user acquisition. So I think absolutely it's gonna be hitting like non gaming apps like travel, shopping, et cetera. I don't know, Vincent, do you do you agree? Have different opinion? Vincent: No, I agree, but also again, don't forget website media, which again for the longest time, their traffic and therefore impression the volume of impression and therefore revenue is down. So this is essentially for me, the nail in the coffin, you the AI search where the bot is reading the page. so you so now you're showing if you're the New York Times or or whatever media, you know, the impression is is is shown, the pixel is shown to a bot. Right, not the you're human. And obviously the programmatic landscape is very savvy with, you double verify, IAS, understanding this is not a human being behind the screen or behind the the heat, the traffic, the butt checking. So that's that's right now the the main casualty, right? I would say. Josh Chandley: It's so interesting. The internet isn't for us anymore. It's for the bots. Vincent: yes. Warren (Upptic): Really. Vincent: I agree. Josh Chandley: Yeah. All right. Let's move on to Meta, where at their US ad prices are up 23% year over year. But do advertisers even care? Meta's ad revenue grew 26% to 63.1 billion. it's sold 10% more ads and charged 14% more for each one. But in the US and Canada, prices are up 23%. You know. Vincent and Moran, you both buy installs on Meta. Are you getting twenty-three percent more value or are you paying twenty-three percent? Vincent: Yeah, so so in my case, and again I'm always checking with other publishers, meta is not my top UA channel, you know. I'm doing a bit, but so I don't really see the pain and you know the CPI and then and the cost rising crazy. And again, if I check on gaming, usually Meta is is not really Google and Applevin or s maybe some others dedicated gaming co you know versus Meta. for me, Meta bread and be bread and butter is non-gaming, e-commerce, traditional advertisers and the long tail as well, like Google AdWords. so yeah, the more impression I understand, because Meta is doing a great job, honestly, to have short content. and also, they open their graph to the feed, you know. So the feed now back in the days it was only friends posts. Now it's whatever, none really page you didn't really like or or followed. So they open up the volume of impression and the adventure tremendously well. And maybe with more short term or short format, sorry, content, you have more equation to show impr to show impression. and then on the price, I think it's gonna be around the creative, but I want I want to let Warren jump in there maybe to give to give his feedback. Warren (Upptic): Yeah, I think the main area, Vincent, where probably we just have a different vantage point is just the the portfolio of games that that each of us are working within. So for our team at Uptick, I think we've just for whatever reason built more of a portfolio working with more IAP driven games. airing more on the mid-core, hardcore side, very light on casual and hyper casual, therefore very light on ad revenue first games. so with that. caveat of us not necessarily representing the whole industry but a subset very different perspective. So for us like meta quarter over quarter is I'd say for the last three years at least, either number one or number two as far as like where we can profitably invest ad spend. And we're always playing in all of the you know main networks that we'd be thinking about. But conversely, you know, when we have tested more casual games or hyper casual, the complete inverse is true. This like can't work at all in meta App Love and is king, nothing else matters, like in a in a relative way. So this is actually, you know, something where I see just tons of like people talking past each other in the industry, not not saying we are here, but like you can have a wildly different take on what what the what the truth is as far as like what is a viable and non viable ad network, because it's so it's getting more hyper specialized now, like between the ad revenue driven and the IP driven side of things. even I mean, slight tangent here, yeah. U Unity is the one that's in between. Josh, I know you couldn't join last week, but I loved I loved your interview with with with Unity. And I think they're still not there though as far as being able to can the they they can be better than app lovin' for the IAP driven part of the ecosystem and we're already seeing that, but it's still it's kind of in a uncanny valley right now where it's not as good at IAP still as the large first party networks. meta Google TikTok and then it's not as good with ad revenue as as as Max is. So there that that that's interesting. It's gonna be interesting to see how they have carved their path within there. And I guess sorry, last last thing that I want to touch on is while I'm saying nice things about meta in general. Right now Meta actually is really bad, you know, depending on when this podcast goes live, relative, you know, recording on and in end of October here. But it's a really bad season right now for meta in general. So Big picture, Meta is great for IAP-driven games. Short term, this is one of the worst quarters that I've seen recently. And there's really three factors that are driving present. meta, just like super high CPMs, super poor performance relatively. the main things that are impacting this, we know for a fact that there's a lot more sports betting and prediction market buying that is happening. The policies have evolved both as far as like where these companies can advertise and the network policies. And then we're also in the midst of a political campaign season, primary season, where there seems to be more digital ad spend than any prior season. So I think we already have like Q4 pain that comes every year, but this is compounded by these two macro factors of the new dominant players that are willing to bid recklessly and push us all down in the waterfall Vincent: Mm-hmm. Warren (Upptic): in these networks, as well as the short-term, also reckless spending of these political campaigns that that need to Use it or lose it, before next Tuesday basically. Josh Chandley: I think this is a whole podcast, but who cares? Who cares if CPM is up? And and there are some factors that are our seasonality or driven. for example, this is in the US. we've already set for this midterms all times high, all time highs for US political advertising. I I just did a Google search and got my little Gemini AI overview. We're at 11.21. billion in spending so far. That Vincent: Insane. Josh Chandley: is like that is bonkers. I don't I don't even know. Like that's that's just a massive sum of money. Vincent: Mm. Josh Chandley: And so to some expect there are so to some extents there are these these seasonal factors. But I mean year over year, I think that you know Meta is targeting is one of the best in the world. And I think You could you could still say it's relatively poor. there there is so much upside to a 99% failure rate. And I think a lot of what we see with these CPMs going up every year and people complaining about CPIs going up every year. is well, if you were buying a hundred pressions impressions before to get one spender, and now you're getting 80 to get that same spender, and you spent the same. And your revenue was the same, your ROAS is the same, it's equally scalable, but now CPMs have bumped twenty five percent because targeting's improved. Just not wasting impressions. and so I I I really personally like I don't see why we should care for the most part that over time these ad networks are charging more and more because it's their machine learning models getting Vincent: Yeah, to that point again, I think in the earning call, Meta is also mentioning the adoption of their AI creative tools, which I think is super important because we do know again, think about it, you know, gaming gaming advertisers, we are known to be pretty good with creative. You know, we have in-house UA, in-house creative production. And I can tell you, the creative work is is is insane. the volume, the quality, the creativity. And obviously for some other non gaming clients, it is a pain point. And I believe Aplovin, who is obviously doing a big push on non gaming, is also using their creative capabilities to help those non gaming clients to be on par, and essentially produce a tons of very relevant creatives. And so the fact that Meta mentioned this adoption of their AI tool, I think they mentioned ten million advertisers using their tool and it's like a plus twenty five percent quarter of a quarter. That helps conversion rate. So to your point, Josh, maybe you pay more the CPMs, but maybe the conversion is actually way better. So you have more installs potentially. And so the ROAS is still looking pretty good. And so yeah, targeting where the creative is working harder can also explain why, meta can essentially make more money, but actually for the advertisers, it's all good still. Because to your point, better targeting, right? You stop wasting impression on Users are not gonna convert. Warren (Upptic): That's definitely true. the the the targeting remains strong with meta relative to other networks. The creative arms race is also very real. I was trying to research a few different recent reports on creative trends for this year, a couple of numbers. So the Singular put out a recent creative report said the top ten percent of creatives currently eat between seventy five and ninety-five percent of ad spend. a kind of bait across different ad networks. And then there was AppSfy report that showed year over year volume of creative production increased by around 45%. A big part is because the the cost of creative production is quickly going towards zero as AI facilitates either assisted or completely whole cloth production. So, you know, as as Vincent's alluding to, like when we have better C VR and the algo is also continuing to get better, this gives meta in any other network the ability to squeeze more margin and still give us as buyers the minimum result Josh Chandley: Mm. Warren (Upptic): that we will accept. but I also want to make sure that we don't get lost in the sauce. Maybe a larger piece of advice for operators out there, anyone in the UA ecosystem. So Josh, I appreciate you calling out the specifics of the ad spend for the political season. I didn't know what the specifics were, but between that And the prediction markets and what we at least have clues that they are spending. We are filled with irrational actors at this moment on certain channels. And I think all of us have gonna I'm gonna date myself slightly, but I think all of us have been in the industry long enough to see like the machine zone in their prime era of buying, where they were just the bull in the china shop and they essentially had a mandate to be top of the waterfall for UA buying for every ad network at any cost. paraphrasing. so we would see these periods as you know I at that time I was I was operating a lot of games that competed for similar users where we would just have to kind of tuck in and we'd have to say, our competition bidding for this inventory is being completely irrational right now. We cannot compete with this. We need to tuck in and chill. This is not sustainable behavior. And then we'll re-emerge once, once things get closer back to normal. And so that's high level advice is just making sure under people understand there are irrational actors impacting channels like Meta in a disproportionate way. And sometimes the best strategy is just to chill out for a few months because it ultimately like people need to do marketing efforts that produce ROS and back out. And if there's an irrational actor that's preventing you from being able to do that and not doing it themselves, don't go to war with them. just wait until the flurry is over and safe safe rule of thumb is like Christmas Day and beyond in most cases. Josh Chandley: Yeah, that is that is such good advice and it is so hard to take. If you're if you're running UA and and you're being forced to to play defense for for multiple months or even multiple quarters, if there are things like the NFL season kid king up kicking off and calci and any other betting apps, one thing to just buy every impression. explaining explaining that to your boss can be hard. Warren (Upptic): Right. And it's a really important reason that teams, you whoever's operating your UA peop your your UA for you within your business or your partners, you need to have like macro flexibility. Like well, one of the worst things you can do is plan out a year of we're gonna spend exactly this much each month, and this is how we're gonna allocate it to the networks. I've worked with some bigger companies where it's like, sorry, that's the plan. We have to execute the plan. That's what was approved. And you'd sp waste so much money. by applying that rigidness in instead of taking an annual view with maximum flexibility to follow the opportunities and pull back when there's these irrational actors. Josh Chandley: And it's it's hard but this is exact I care about this so much because when you when you take what the market gives you, you you make so much more money, but it it makes your quarterly numbers look really weird. Like if you're scaling into the end of a quarter, that means your actual recouped spend, if you're waited hard Warren (Upptic): Mm-hmm. Josh Chandley: into the last month, it you're you're ROAS in period and therefore your cash flow in period looks worse. Whereas if you're fading and you're having challenges, sometimes the CFO is really happy because he sees all this cash flow coming in. and it but Warren (Upptic): Right. Josh Chandley: it's not actually go ahead. Warren (Upptic): It's like short term financial engineering for quarterly number Josh Chandley: Yeah. Warren (Upptic): optimization versus long term business health optimization. Vincent: Yeah. Yeah, absolutely. Yeah. Managing, short term and long term is the key here. sometimes you take a hit short term, but you're still profitable long term or the other way around. But ideally you just balance those things and you navigate those waters when you have those moments where everybody's go crazy, you don't want to follow, you play defense. can you do that or you have pressure from whoever, you know? to actually continue to spend. yeah, that's absolutely key in managing a studio, I believe. Josh Chandley: Yeah. Meta didn't mention, I think as usual, audience network. It's competitor to app love and unity. is that continued silence a signal or is audience network still just too small to to mention next to the family of apps? Vincent: So I think nobody wants to be on that network in you know, in Wall Street and talking to the market. it's not sexy. The multiplier is not good. You prefer to be a SaaS or a B2C. And that network is not sexy in the finance, you know, world. but yeah, also at the same time, as we all know, Meta de invested the audience network, right? They really shrank the team and I don't I'm not sure the details, you know, and the resources, but so they for me, fan. The audience network is low profile right now. At the same time, it is still a key player on the monetization side of things. So it is absolutely instrumental for the gaming community. And it's a good network that monetizes well with actually pretty good ad experience. So the ad template is one of the best in terms of the user experience. they're you know, they're working on improving their product. the innovating, trying to catch up and be still be relevant and competitive on the monetization side. but I guess it's a matter of resources and focus. if you are the fifth wheel in a big company, you sometimes you lack resources. but yeah so that's how I read that. It's normal that it's not, mentioned at the forefront. I think, you know, again, the key message here was Muse that hey, Now we have a chat bot. it's a cute name. There's a huge adoption. and right now they need to focus on that and the adoption rather than mentioning, you know, advertising, network, or even worse, hey, we have a plan to put ads in Muse. That cannot be the narrative. And it was not, which I think is pretty smart in terms of managing, you know, the street. Warren (Upptic): Yeah, I agree. Just largely immaterial. if if fan was turned off and I didn't dig into the cross tabs, I probably wouldn't notice for a year or two, practically from a UA standpoint. Josh Chandley: part of part of the reason it's less material is because it's currently hamstrung, where I think it's maligned for not bidding much into iOS traffic when there's no IDFA. Do either of you think that ever changes? Vincent: Yeah. I think and I absolutely hope it's gonna change. again, like Google on iOS, you know, Meta did the same strategy you know, a few years back with ATT, but it's not gonna be forever. Now I believe we all understand there is a world where you can do probabilistic attribution on the device in a very privacy way. It's hard, it's tough, it's a tough, you know, thing to crack, but yeah. They're gonna they're gonna crack that, like the Google ODM. Meta's gonna do the same and they're gonna go back to iOS. The only question is when. but again, then is it gonna be instrumental in changing the dynamic of the network? Yeah, of course it's gonna be a huge chunk of the market back, but still, you let competitors take market share for years and the algorithm, performance and quality of the others, is now still super, super strong. So it is a building block both Google and Meta needs to have. And I believe they will. Only question is when. But then yeah, you're just back in the race. It doesn't mean you're gonna win, right? Josh Chandley: Warren, I know you have big feelings about TikTok's Pangle. How Warren (Upptic): Okay. Josh Chandley: do you feel about Meta's audience network? Warren (Upptic): I don't have that same kind of smoke. like I think Audience Network is is is Josh Chandley: Okay. Warren (Upptic): a real it's a it's an actual product. It is underloved product to both of your points. But no, I would never say the the the the smoke I have for Pangle. Like Pangle is just a steal your money if you don't know any better product at this point. Don't g don't get me started again. Josh Chandley: Okay. Okay. I I I wanted to. I wanted to. Warren (Upptic): on my my my Pangle hate arc. Josh Chandley: Yes. All right. Well, Meta, their audience network, like Pant Gold, bids into, the the mediation stacks of ad monetized games. which brings us to a listener question from OWL46381. this person says, I have a question on mediation. I've heard larger studios use multiple mediation solutions at the same time. For different platforms and different geos. Are you able to do the same? Or does it require complex work? Do you think mediation leaves you locked in? Or is it just tied to the fact that people can run Apple and Ad ROS UA campaigns if they use Macs? Vincent: So it's it's an amazing question. Obviously, I love that. again, I think we touched on the last episode with the release of CloudX Orchestrator, you know, this idea of multimediation and and so the answer is yes, of course, people, folks, you know, publishers, you can put that in place. But yeah, it's a lot of work, it's a lot of headache, it's a huge, you know, technical undertaking that you can do. So, yeah, essentially putting, we mentioned earlier AdMob is very strong on banner and tier three. You put AdMob is the best mediation for those areas. And then, Aplovin interstitial in the US, yeah, of course, they are the best. So pick and choose, part of your inventory to be monetized by different mediation is very, very smart. Again, now with some new technology, you know, we mentioned CloudX, Lumit, Orion 11. Now technically you don't have this headache and you can essentially use a on the shelf product. The only thing is, yeah, it's very difficult and it's not recommended to do that for the same ad opportunity or changing in the same session, for the same format. And obviously, as you touched on, check your mediation Tsan C's and and potentially constraint because yes, as you mentioned, Applovin UA product, which is arguably the best UA product for gaming, is not available and cannot work. if you're not committed one hundred percent of your inventory in max. So Josh Chandley: For ad monetized games. Vincent: yeah, I'm talking unmonetized, obviously. We're talking mediation. So yes indeed. so so that that's the landscape, That's what you you play with. To answer the question of this viewer, yes you can. Now with tools on the shelf it's even easier. Josh Chandley: I love the question. and I I always try to respond on YouTube or Spotify or whatever when we when we get a good one. And I think if we have one that sparks conversation on the pod, we're just gonna bring it there too. I I think this is becoming more and more of a topic, especially as AI is allowing people to deconstruct binaries and look at what those big games do. block blast by Hungary was just in the news when somebody published some of their admortation tactics by just taking apart the binary. There's a lot to learn there. APAC studios have been very sophisticated in how they handle their admortization strategy and their mediation strategy. For us in the West. we're going to be learning a lot more there, probably over the next couple of months. but to answer the question directly, yeah, it is possible. And people have done it for years. It's really just about trade-offs, and it's the trade-offs that Vincent kind of called out. Vincent: Okay, one shout out. If you venture into this, please make sure your adapters for all the other third party networks are compatible with all the mediation Josh Chandley: Mm-hmm. Vincent: you want to work with. Small caveats. Josh Chandley: Yes. Warren (Upptic): you guys are the ad mediation experts. I think you guys covered the main bits here. I I I will add from the UA side, that lock-in of knowing that you get the performance on App Levin as a channel and it you're basically non-viable without that max mediation, like that is real. It's a driving Vector. so don't want to discount that. But yeah, also just want to shout out Al four three. 46381. obviously one of the best owls, one of our favorite owls here at the show. And thank you for the listener question. Josh Chandley: thank you, Warren. All right. That's it for this week. If you have a question for the show, you know, subscribe and leave it in the comments. We we really do read them all. thanks for joining me as always, Vincent and Warren. I'll see you next week. Warren (Upptic): Thanks y'all. Vincent: Cheers. Thanks.