I haven't worked in this space, and I don't play this type of game, but ads for these freemium mobile games seem to show up everywhere. Are the ones with the giant ad spend the only ones making money? Are they not making money either? At first it seems that more discoverable app stores or even some other "curation" services could help lower the required ad level, but then it occurs to me that perhaps whales really only respond to flashy expensive ads on popular media properties?
Like most businesses, most mobile games run on a customer acquisition cost vs. LTV model. Buy customers for $5 a pop, with LTVs of $7, which you can scale till you've used up all the profit. If you can drive that CAC down via better social (Words with Friends), better 1st party featuring (Clash Royale right now), IP (Star Wars: GoH), then more power to you.
Sorry, that'd be Google Play and App Store featuring (in their featured apps section). Quality editors choice or "best new games" featuring can mean hundreds of thousands of free installs, and a ton of momentum to drive word of mouth/virality.
