3 Reasons You’ll See More Ads in Mobile Games — and Like Them

Sean Gallup/Getty Images
Source: Sean Gallup/Getty Images

In the next few years, anyone who plays games on their smartphone or tablet can expect to see more advertising — and better types of ads — in the games they play. Why is that? Because in-game ad developers and advertisers are creating new types of ads that are less intrusive and more engaging for users, making them a win-win for users, game developers, and advertisers.

VentureBeat reports that Dave Madden, senior vice president of global media solutions in Electronic Arts’ mobile games division, believes that mobile gaming will be the “single largest advertising platform in the world.” Madden compared advertising in games today to the advertising on ESPN when it was a fledgling cable TV channel. At the Global Mobile Internet Conference, Madden said:

We are starting to do deals with Madison Avenue agencies and brands. Brands are trying to figure out how to get to this young, engaged mobile consumer with an experience that they will welcome. It’s like ESPN in the old days. They started with direct response ads, and now it’s Budweiser advertising.

Read on to find out why in-game advertising will continue to grow — and why you’ll not only tolerate, but maybe even like the new ads that will show up in the games you love to play.

Source: Thinkstock
Source: Thinkstock

1. In-game ads are less annoying — and more relevant– than TV ads

“Advertising is moving out of TV because it is a disruptive and annoying experience,” Madden noted. TV ads make viewers wait for the content that they want to see, and radio ads are often played at the same time so listeners can’t just switch channels to find music when an ad comes on. While ads that play on TV channels and radio stations are the same for all viewers or listeners, ads in games can be targeted at the individual user, so that they’re relevant to each person’s interests.

As Madden notes, advertisers are cautious about not annoying or frustrating users, staying sensitive to the user experience in order to avoid driving them away with ads that replicate the “radio and TV model” of forcing users to seek another, “less abusive” experience. Instead of making users sit through ads that they don’t like and aren’t relevant to them, developers and advertisers can target ads that enhance, rather than detract from, the user experience. Ads that are interesting and relevant can actually help users enjoy playing a game, and positively influence their decision to come back to it in the future.

That’s a lesson that’s relevant for all types of mobile media. Even major media outlets use intrusive ads on mobile, like full-screen ads and those that are timed and can’t be tapped away — ads with which users aren’t engaged, and with which they don’t want to be engaged. Rather than requiring users to pay for content with their credit cards, game developers are implementing modes of advertising that enable users to pay with their engagement, which can happen when ads stop being annoying and start becoming an entertaining part of the gaming experience.

Source: Thinkstock
Source: Thinkstock

2. Advertisers offer users rewards when they agree to view an ad

Instead of making users sit through an advertisement with no reward — other than finally getting to see their content — as TV ads do,  in-game advertising can offer users rewards if they agree to watch an ad. Users can watch a trailer on a subject that they enjoy, and then receive a reward like in-game currency, which enables them to purchase something in the game.

The Next Web reports that while well over a billion people play free mobile games on their devices, only a small fraction of them ever make an in-app purchase. Many developers deal with that reality not by pushing in-app purchases or bombarding users with banner ads, but by implementing native ads that offer players a choice of watching a video or downloading an app in exchange for in-game currency.

Typical click-through rates for these types of ads are well over 10%, and boast completion rates of 50%. (Compare that to the typical click-through rate for ads on newspaper websites, which is closer to 0.3%.) The Next Web notes that these reward-based ads have brought many indie game developers enough revenue to create new games, while giving advertisers real engagement with their content.

Ashley Higgins, senior manager for ads at Sega, says that gamers are happy to watch 15- or 30-second rewarded videos. She tells VentureBeat, “We still count on in-app purchases for the majority of monetization, but the video rewards are user opt-in, and players like it. They get a positive experience from the ad engagement.”

Source: Thinkstock
Source: Thinkstock

3. Gaming devices will outnumber TVs

It’s undeniable that you’ll start seeing more ads — and better ads — in your mobile games, if for no other reason than the sheer size of the mobile gaming industry. As Madden explains, the future of games as an advertising platform has to be huge, simply based the number of users who play mobile games and own the devices that support them. In 10 years, Madden predicts that mobile games will not only represent a huge advertising platform, but will “wind up being the single-largest advertising platform in the world because the number of devices in people’s hands will far outweigh the number of TVs that are out there.”

As the Wall Street Journal reported in August, half of the total time we spend with digital media is spent with apps, and about a third of the time we spend with apps is spent on gaming, which Madden concurs “is the No. 1 app on mobile devices.” These numbers continue to rise, and advertisers need to follow where the eyeballs (and swipes) are leading.

Some developers insist that they’d rather rely on in-game purchases in so-called “freemium” games, rather than allowing advertising to change the user experience. In-app purchases are expected to account for a $1.5 billion market this year. But gaming industry experts note that the vast majority of users are unwilling to spend money in games, suggesting that most games make money from just a small portion of their users.

To monetize the other millions of users, developers and advertisers will create more and better ads that are engaging for users and worthwhile for advertisers. Developers will win as well, by getting users to pay for the games that they play in ways that are rewarding for everyone involved, and pushing in-game advertising toward becoming one of the biggest advertising platforms yet.

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