In-game ad revenue will reach $56B in 2024, but getting your share depends on genre (VB Live)

Presented by Facebook Audience Network

To maximize the revenue impact of ad monetization, it’s important to hone in on the right formats and strategies for your genre. For best practices from experts, backed by stats and user sentiment, don’t miss this VB Live event.

Register here for free.

Revenue from in-game ads is expected to continue its remarkable growth, increasing from $42.3B in 2019 to $56B in 2024 [1]. Increased player interest in ads is a major reason for the surge, says Hahn Kim, strategic partner manager NA at Facebook Audience Network. According to a global mobile gaming genre study, conducted by Accenture, more than 73% of mobile gamers report openness to receiving in-game ads[2].

While casual and hypercasual game publishers already leverage many ad formats available to monetize, hardcore and midcore publishers are just starting to realize the potential of ads. And they’re focusing more on rewarded video, Kim says. That’s because the type of ad that works for a game depends heavily on the genre of the game, their research has found.

“There’s no one-size-fits-all approach, although there are best practices for each,” he explains. “At the core, understanding the user journey in the game is the best place to start in order to understand what ad formats to integrate and where.”

In other words, genre matters in terms of how to integrate ads, and where and when to show them in order to avoid obstructing the user experience while also gaining the best return on investment.

For example, casual and hypercasual games are typically shorter in gameplay, and players don’t really see themselves as gamers. They engage with rewarded video, and they typically don’t mind interstitial ads. In some cases, banner ads work there as well.

“Casual players tend to accept ads as a fair tradeoff for the free-to-play model,” he says. “And because it’s much shorter gameplay, you can show interstitial ads and rewarded video much more often than you can in, say, a more core game.”

Speaking of which, hardcore and midcore genres like action, shooter, and RPG tend to have a much longer playtime; players tend to be much more specialized and committed, and see themselves as gamers. Typically here display formats, like banner or interstitial, do not work terribly well as they can disrupt longer-running gameplay.

“With that in mind, we’ve found hardcore and midcore games have a lot of success focusing on rewarded video, balancing that with in-app purchases,” Kim says. “If implemented well, the format offers a clear value exchange to the player, the publisher, and the advertiser. Everybody wins in that case.”

The common misconception is that in-game ads hurt game metrics such as retention or in-app purchase revenue. However, if integrated correctly, in-game ads, especially rewarded video, actually add incremental value. It doesn’t interfere with gameplay retention, and can even encourage in-app purchases, and Hahn has seen that repeatedly with publishers on the Facebook Audience Network.

Based on a mobile games monetization study by Walnut Unlimited (commissioned by Facebook Audience Network), about 57% of mobile developers that use a hybrid monetization model believe in-game ads can improve player retention without detracting from the game experience. 79% of those same developers say that rewarded video is their most successful format.

A hybrid approach is especially important when you consider that only 3.8% of mobile game players make in-app purchases. By integrating in-game ads, developers can reap important revenue from the rest.

Again, because there is no one-size-fits-all approach to ads and monetization, Kim emphasizes the importance of building in a testing and optimization framework whenever integrating ads. While there are best practices, every game is slightly different — from the currency used to the player journey, how often users are engaging and spending, and how much items cost.

“Audience Network has done a lot of research on testing, and has outlined best practices for ways to implement ads, to make sure you can improve those things we talked about like player experience, retention, and LTV,” he says. “But developers should test themselves, because every game is unique.”

He recommends that developers find an A/B test for their ad placements, and also carefully balance that with IAP offers. And it’s important to monitor things like ad frequency, so users don’t get burnt out. You don’t want to be inundating them with ads all the time, but finding key points where they would engage and enjoy that experience.

But don’t wait too long to integrate ads, Kim says. By starting on day one, you avoid having to jigsaw ads into the game after launch, and you capture the full revenue potential from all of your users. Integrating early means ensuring you’re not missing out on the biggest possible revenue gains. And, always, test often.

“As the game itself evolves and the industry evolves and changes, so should you and your in-game ad strategy,” Kim says. “There are always new innovations out there — to improve on what’s already been integrated will mean you’ll continue to have success with in-game ads.”

Don’t miss out!

Register here for free.

In this webinar you’ll learn:

  • Insights into in-app ad success by genre
  • The best rewarded video entry points for each game genre
  • How to leverage common A/B testing methods
  • How to make sure ad integrations complement in-app purchases
  • How leading publishers test and prove the revenue potential of ads

Speakers:

  • Kiel LeBaron, Senior Director, Ad Monetization, Jam City
  • Hahn Kim, Client Partner Manager, Facebook Audience Network
  • Emma Bullen, Product Marketing Manager, Hyper Hippo Entertainment (Moderator)

1Omdia: Market Landscape, In-Game Advertising: June 2020

2 Mobile Games Advertising Report 2020, 2CV (commissioned by Facebook Audience Network) – a quantitative and qualitative study in UK, US, DE, FR, TR, BR, AR, KR, JP, RU and VN between March to May 2020 on the changes in the mobile game advertising since 2017 and how advertising impacts players, July 2020.

Source: Read Full Article