Mobile games are experiencing exponential growth in Asia Pacific, as compared to computer games, with the former’s revenue expected to hit $2.4bn by 2021, based on research from Mobile Marketing Association (MMA).
Globally, a 2018 Mobile Gaming Apps Report by Liftoff, a mobile app marketing and retargeting platform, predicts mobile games will account for a 72% of total global app revenues, or $58.1bn, by 2020.
It is no surprise then, that international game developers enjoy launching games like Pokémon Go, PlayerUnknown's Battlegrounds (PUBG) and Maplestory M in the region because of the huge number of avid gamers, lower install rates and user acquisition costs.
Pokémon Go was launched to critical acclaim in 2016 and reached 800mn global downloads, while Maplestory M, which was launched in August 2018, achieved three million global downloads within a week.
This is proof that the face of gaming has changed, as mobile gaming continues to take off in a big way, especially as it enters the world of eSports, Rohit Dadwal, managing director for APAC at MMA tells The Drum, noting that mobile gamers also describe themselves as feeling more engaged and less stressed when on gaming apps compared to social apps.
This fact alone is enough to convince marketers on the effectiveness of mobile advertising, Dadwal believes, and when placed strategically in a mobile gaming inventory, it can result in a trifecta of wins for the publisher, advertiser and consumer.
However, as mobile gamers do not always identify themselves as ‘gamers’, Dadwal notes that many advertisers and consumers are having a hard time seeing the full potential of the gaming market, due to the reputation of ‘gamers’ that has been garnered over the years.
“The truth is that gamers come from all walks of life, spanning across both sexes and all age groups, from the youth to retirees. As such, there is much room for marketers to reach their audience through mobile gaming,” he points out.
Marc Hale, head of APAC at Liftoff shares Dadwal’s sentiments and adds that as more money are being spent on mobile games than on TV, movies, books and other forms of entertainment, marketers should not hesitate about getting involved in the mobile gaming industry.
Quoting research from games, eSports and mobile intelligence company Newzoo which found that 2.3bn gamers across the globe will spend $137.9bn on games in 2018 and more than half of all revenue from games will come from mobile, he says the advancement of the mobile gaming industry will not only attract new audiences, but also give rise to new gaming app publishers, influencers, content creators, and brands investing more and more dollars to tap the global gaming audience.
“Reuters claims the industry grew by 10.7% over last year, making its net worth three times as much as the movie industry,” he explains. “The sudden surge in growth is accounted to the China region, where games sales increase 14% per year on average.”
Marketers are finding themselves having to address concerns from clients like fraudulent app installs, masking of device IDs, quality of the audience, inventory and mobile not being a brand-safe environment when it comes to mobile games.
This is because as the mobile ecosystem becomes more sophisticated, new threats come with it and fraud in the in-app world is a huge concern for mobile marketers, says Hale. “According to Venturebeat, in 2016 mobile marketers lost $1bn on fraudulent installs and the number doubled to $2.6bn in 2017. Attribution fraud is also on the rise and has recently expanded in mobile apps, which means the three main categories of mobile ad fraud are fake installs, install hijacking and phantom apps.”
Dadwal believes that even though adfraud is unlikely to banish, brands can look for ways to navigate to minimise the risk, advising brands to regularly monitor benchmarks and single out suspicious user behaviour for any marketing campaigns.
“Deactivating poor sources of traffic or reporting suspicious activity may also help stop wasted advertising spend,” he says. “It takes the collective effort and vigilance of everyone in the mobile gaming environment to influence change with regards to fraudulent activities.”
Marketers can also consider employing established advertising vendors with integrated anti-fraud solutions, he adds, as it can give businesses more confidence that their advertising spend is utilised efficiently.
A bright spot for mobile marketers however, is that users are twice more likely to encounter objectionable content on social media than in mobile games, according to a 2018 survey on brand safety conducted by mobile video ad network AdColony.
The survey, which was conducted in 38 countries and surveyed mostly males of ages ranging from 16 to 24, found that 53% of respondents spotted objectionable content on Facebook, as compared to mobile games.
Tom Simpson, the general manager of Australia and India; vice president of programmatic and innovation in APAC at AdColony, says the survey showed that mobile gaming is in a fortunate position because it is free of many of the brand safety issues associated with social media as content created by professional publishers is inherently more predictable and brand safe than user-generated content.
Echoing Dadwal’s advise to brands on employing third-party vendors, Simpson adds: “Quantifying brand safety via integrations with brand safety and viewability specialists such as IAS or Moat is key, so it is important marketers partner with reputable mobile platforms that have certifications around brand safety and transparency.”
Mobile game ad formats and placement types
Static ad formats (banner and interstitial) accounted for 56% of ad spend on Android and 61% of ad spend on iOS, according to the Liftoff report.
Aside from banner and interstitial, other popular game advertising formats include advergames, also known as custom branded games, which involves a high level of interaction with the brands as its main focus, in-game advertising which are custom campaigns that are embedded and unique to the individual game, playable ads allow users to try out a game within the advertising experience with an option of installing it.
For ad placement types, popular formats are display ads that runs before the beginning of a gaming experience and video ads, which are short ads that takes place in-app and is a full-screen engagement. Depending on the context, gamers prefer this ad placement, especially in a rewarded environment.
While these ad formats are familiar territory for app marketers as they are universally understandable and accessible by users across the globe, all three experts agree that marketers need to start leveraging on rewarded ad experiences, because unlike incentivised ads, the gamer who watches a rewarded ad but does not engage with it, still receives the reward.
“This ad placement is also the best way to engage the mobile gaming audience because it addresses the publisher’s need to monetise, at the same time ensuring that users engage in a brand-safe environment,” explains Dadwal, noting that it also allows the consumer to keep engaging with the game in a non-intrusive environment.
While rewarded ad is extremely effective, it is more expensive on video, adds Hale, as added-value comes at a higher price tag. That said, Liftoff’s data shows conversion rates for rewarded video (9.45%) are double the rates for non-rewarded video (4.84%).
“At $3.28, CPIs for rewarded video are 20.5% more than for non-rewarded video ads ($2.72). Clearly the cost to acquire users who will take an action after viewing a rewarded video is significantly less,” explains Hale. “Do the math, and CPIs may not be the biggest bargain, but there’s tremendous value in using rewarded video to motivate and activate quality users.”
For Simpson, rewarded ads are a far more transparent, respectful and modern way of interacting with always-on era consumers: “User-initiated video ad experiences are built into and are directly relevant to the environment users are in. Rewarded video is about a value exchange, where consumers choose to engage, rather than being forced into it.”
New marketers getting into the game
From rewarded videos to playable ads, mobile games provide an environment especially suited to formats which make consumers the centre of the experience. The gaming industry is also undergoing a huge shift as new technologies are created.
All this means that marketers new to the mobile game inventory need to think smartly about app monetisation and strike a balance between user experience and app monetisation. To help shorten the learning curve for marketers, Dadwal says they need to follow these key steps.
“Ensure the transition between the game to ads are organic for an uninterrupted and enjoyable user experience. Marketers also need to strategically take advantage of the entire screen and prepare to leverage video both vertically and horizontally as consumers are unwilling to shift their phone to watch an ad,” he explains.
“In addition, they need to keep it short and make the experience more interactive by augmenting it with the likes of rich media, quizzes and other elements and ensure that message can be communicated without audio too. Finally, they should incorporate reward-based formats where plausible and for in-app advertising, fully integrate into the game by working closely with the game developers.”
Pointing to how Liftoff has had success in running campaigns over the years for gaming clients with the help of relevant, high-quality ad units that leverage intent data to attract high quality new players for their games, Hale says: “Marketers should focus on creating ad formats like playables, videos and natives, that will not only help drive new player acquisitions but keep them engaged (through targeted and relevant ads) without disrupting the player’s game experience.
Quality is more important than quantity, concludes Simpson, and the key for marketers is to gain real and quality consumers who will view their brand in a positive light. “Placing your advertisements in brand-safe environments is an important step in gaining quality consumers,” he explains. “In order to determine ad placement, it is essential to test different ad formats, learn more about your consumers and their preferences, and gauge what works best for your brand.”