Dispelling in-game mobile advertising myths

By the end of 2019, the gaming market in APAC is expected to have grown 7.6% year-on-year to generate over $72 billion, which is around 47% of global game revenue. Mobile games will emerge as the biggest contributor to the global market, accounting for more than $68 billion (45%) of revenue. Despite this, games remain the most underestimated and underutilized ad medium in the mobile world, accounting for just 7% of total mobile ad spend.

With some brands still considering mobile games to be unworthy of their ad budget, we want to dispel three common myths to show that in-game mobile advertising deserves a bigger share of mobile ad spend — which reached $70 billion in APAC alone last year.

Myth #1: mobile game advertising distracts from the user experience

Irrelevant ads and poor implementation can no doubt detract from user experience and annoy gamers. But let’s turn this around: By creating suitable content that enhances user experiences, as opposed to disrupting them, everyone wins.

Ensuring a great advertising experience for mobile gamers requires advertisers to work together with publishers. To minimize distraction, app publishers strategically implement ad spaces, choosing quality over quantity. In fact, nearly half of mobile game developers only serve one or fewer ads per session, compared to two ads prior to a video on YouTube.

Mobile games offer a wide variety of ad placements, including native, interstitial, and banners, to achieve different objectives at different eCPMs. Advertisers can also help ensure that their ads are seen as a positive addition to the game. This can include targeting ads to achieve maximum relevancy and varying creatives to keep things fresh.

A particularly noteworthy ad format is rewarded video, which offers virtual goods or currency that help the user advance in-game when he or she opts in to watching an ad. The rewarded video ad format is seeing a stark rise in popularity in APAC, as noted in Smaato’s H1 2019 In-App Advertising Trends report.

APAC marketers are already wise to the advantages of rewarded video with 35% of all in-app video ad spend from the region going this particular format. This is compared to just 10% in the Americas and EMEA. Interestingly, rewarded video ads were also found to have 86% lower eCPMs than the overall video format — providing a great return-on-investment for advertisers.

Myth #2: mobile games aren’t safe for brands

Brands want to understand both who sees their ads and in what context. This means it is vital for advertisers to be able to gather user demographics and know what content runs alongside their ads, as a brand’s advertisement can be misinterpreted as an endorsement of other on-screen content.

Accurately identifying what content is brand-safe in a digital ecosystem driven by unpredictable user-generated content (UGC) is an incredibly complex and difficult task, and many social websites have put brands’ integrities at risk. Thankfully, mobile games provide a highly-controlled environment, typically devoid of UGC, so that advertisers do not run the risk of having their message appear next to inappropriate content.

Myth #3: mobile gamers hate advertising

From full-page ads in magazines to TV commercials, it’s understandable that many consumers are frustrated with the number of advertisements they are confronted with every day. However, mobile games are a unique medium for advertising, and mobile gamers represent a sophisticated audience that understands the role of ads in their in-game experience.

Free-to-play game revenue already overtook that of pay-to-play games in the App Store in 2011. In the years since, players have become accustomed to the free-to-play model, with a recent study finding that 73% of gamers are happy with the ad-funded model of app games and more than 75% prefer watching ads in a free mobile gaming app rather than upgrading to an ad-free version.

It turns out rewarded video ads are just as popular among mobile gamers as they are with advertisers. Over 80% of mobile gamers say they don’t mind watching a mobile ad if they get an in-game reward. Moreover, the majority of gamers report feeling relaxed while playing mobile games, putting them in a more receptive mood to receive information, and allowing brands to reach them.

With the gap between consumer engagement and ad spending hardly shifting, mobile games continue to represent a huge opportunity for savvy markets in the APAC region to have their brands noticed. Advertisers can no longer continue to underestimate the power of this engrossing medium that reaches 2.3 billion people globally and should start considering mobile games as a legitimate avenue through which to engage.

Delynn Ho is general manager, Smaato APAC.

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