Are you AppLovin it?

G’Day Sellouts!

For years, the ecommerce advertising flywheel has revolved around the usual suspects: Meta, Google, Pinterest, Snap, Bing… and more recently, TikTok.

But there’s a new kid on the block and it’s controversial.

Say hello to AppLovin.

The company is cashing in on the $10 billion opportunity in ecommerce advertising, and its results seem somewhat too good to be true.

According to Northbeam, AppLovin is delivering a 45% higher Return on Ad Spend (ROAS) compared to Meta, albeit with lower overall spend levels.

Notably, 85% of purchases driven by AppLovin come from new customers, and the platform is also effective at reactivating lapsed users through engaging mobile video ads integrated into games.

With rising ad costs and fierce competition, could AppLovin be a cheaper alternative for ecommerce brands to scale?

Let’s break down. In today’s episode we’ll cover;

• What AppLovin is

• Why it’s working

• And how to get started before everyone else catches on.

Let’s sellout…

What the heck is AppLovin?

While you might not know their name, there's a good chance you've interacted with AppLovin’s technology - especially if you've ever played a mobile game or run mobile ads.

Until recently, it was primarily a platform for mobile game developers to advertise their games within other games.

They’ve now opened up performance advertising for DTC brands.

That means you can run direct-to-site campaigns that show your product ads inside mobile games, like rewarded videos in Candy Crush or Words With Friends.

Simply put, AppLovin allows you to place your ads within mobile games and apps, reaching users during their highest engagement moments.

And we're not talking about a small audience here.

With over 1.4 billion daily active users and a $100bn+ valuation, the company has the potential to become the next scaled channel rivaling Meta.

Why AppLovin Stands Out

The results brands are seeing aren't just hype.

When a new platform shows this kind of performance, there's usually something fundamentally different about it.

Here's why AppLovin seems to be crushing it for ecommerce brands:

1. User Mindset Is Different

Unlike social media platforms where users are bombarded with distractions, in-app ads offer a more focused experience.

When someone's playing a mobile game, they're already in a "gaming" mindset – which often includes a willingness to try new things and take action.

They're not passively scrolling; they're actively engaging.

2. Less Competition (For Now)

Right now, AppLovin is keeping their ecommerce program somewhat exclusive.

They're only letting select brands in so far as they build their team.

This means you're not fighting against every DTC brand on the planet yet.

Early adoption can mean higher ROI before the inevitable gold rush.

3. Measurement That Favors eCommerce Brands

AppLovin's model is built on a cost-per-result, optimizing actual purchases instead of impressions.

Even better, AppLovin tracks revenue 2 ways: 0 day click or 7 day click.

No view through revenue is even tracked or reported, which advocates say prevents inflation or misrepresentation of result metrics.

4. Advanced AI-Driven Targeting

AppLovin attributed the gains to further development of its artificial intelligence-powered Axon engine.

Their AI technology helps match your products with the most likely buyers based on user behavior.

Similar to Meta, but with a different audience and context, if AppLovin knows someone clicked on an ad and bought water, they will serve you an ad about water filtration.

They take the behaviors of people who have been purchasing and find similar people with similar behaviors.

5. The AppLovin Engine

AppLovin's business model is fascinating because it operates three interconnected pieces in the app ecosystem:

1. They own games that generate ad inventory

2. They own the platform that serves those ads

3. They own the tools that optimize ad performance

It's like owning the store, the products, and the payment system all at once.

Getting Creative with Your Creative

AppLovin delivers different kinds of ads than other platforms you’ve used.

Here's what works best:

• Real user-generated content (can we please stop the fake ads?)

• 9:16 vertical videos (full-screen like TikTok or Reels)

• Quick hooks in the first 3 seconds

• Product demos or before/after transformations

• Rewards-based CTAs (e.g. “Thanks for watching—here’s 20% off”)

Avoid long explainer videos or highly branded, agency-style commercial edits.

In some cases, porting over Instagram or TikTok ads will work well, but be aware AppLovin doesn’t show ANY copy above your ad.

That means any supplementary copy you normally include with your ads needs to be inserted into your videos for use on AppLovin.

AppLovin recommends testing 5-7 new creatives per week. You've really got to have a nice creative machine running to make AppLovin successful.

This is one of the reasons why they’re prioritizing partnering with large-budget brands: big budgets usually means brands have the bandwidth to churn out lots of tests.

For smaller brands and businesses, don’t worry: it’s extremely likely that testing will reveal best practices to make the overhead of testing ads less significant

How To Get Started

If you’re spending $50k+/month on paid media and already seeing strong mobile traffic, AppLovin could be your next growth lever.

Here’s how to get started:

1. Creative First: AppLovin rewards performance video. Use TikTok-style UGC, animation, or product demos, ideally vertical and full-screen.

2. Start with a Test Budget: $10–30K can get early signal. ROAS can be volatile in the first 2 weeks but stabilizes quickly.

3. Work with a Whitelisted Partner: AppLovin doesn’t yet have a self-serve platform for ecommerce. You’ll need to go through a partner or media buying agency that’s been whitelisted.

4. Measure performance with third party attribution: While AppLovin integrates with Shopify via pixels, so you’ll need a third-party attribution tool (such as Northbeam) to properly compare post-click ROAS to other ad platforms.

Early adopters are seeing it beat Meta in head-to-head tests. If you want first-mover advantage, now’s the time.

The Controversy Around AppLovin

Any closed platform is a mixed bag, and AppLovin is no different.

It’s hard to really trust a platform that hand-selects its users and has no public accessibility (and therefore no public accountability).

I said in the intro that AppLovin is controversial.

Recent reports from short-seller firms such as Culper Research, Fuzzy Panda Research, and Muddy Waters have accused AppLovin of engaging in deceptive advertising practices.

These allegations include:

• Artificially inflating click-through rates (CTRs), with some reports citing figures as high as 30–40%, significantly above industry norms.

• Misappropriating attribution, allegedly taking credit for conversions that originated from other platforms like Meta, thereby overstating its performance metrics. 

• Violating app store policies, with claims of unauthorized data collection and manipulation of app installations without user consent.

Some independent studies have found that AppLovin may underperform, and that results are worse at the median compared to existing options.

But what I have generally found in my research: AppLovin can return extremely strong results, but it will be dependent on factors including brand and industry.

The Sellout Take:

Personally, I want to see more independent and sustained results from ecommerce brands testing the ad platform to get behind it.

However, if you’re a mobile first advertiser and already spending heavily with Meta, Google and the usual suspects, you have little to lose and potentially a lot to gain by signing up for AppLovin.

The returns on investment reported so far are mouth-watering, and that alone should be enough to get you to test it.

Do I know AppLovin is the Meta Ads of 2025? No.

But I do know that we constantly see breakout brands that thrive just because of their willingness to adopt and perfect emerging platforms and campaigns.

AppLovin has done more than enough to prove itself interesting.

Until next week, keep selling out. If you found this interesting, please share it with a friend and hit reply - I'd love to hear about your experiences with alternative ad networks.

Luke