e-Marketer Report: In-App Advertising and Mobile Games

Last week, eMarketer published a report, Mobile In-Game Advertising, which looked at the overall state of the relationship between mobile gaming and advertising. We were excited to be able to share some insight from our experience as a mobile gaming company. The report covers everything from how game developers are shifting focus to mobile games, to how advertisers are beginning to understand the massive appeal of mobile games, to the different types of ad formats that are successful on mobile. 

On the publisher side, revenues from smartphone games continue to increase, and in-app advertising has become complementary to publishers’ revenue from in-app purchases. Further to that, ad revenues from digital games will increase to an estimated $3.25 billion, a 16% increase, most of which can be attributed to mobile games. 

There are three major factors this report addresses that are contributing to the rapid growth of in-app advertising: 

1. It’s a relatively brand-safe way to provide complementary revenue to in-app purchases.
2. Publishers have become more open to adopting programmatic mediation. 
3. Tools like MRAID and Open Measurement make it easier for networks and publishers to serve ads and more importantly, measure performance.

Other major contributors to the mobile explosion are the rise of hyper-casual games and immersive advertising formats. Here at AppLovin, these are some of our favorite topics. Alice Guillaume, Director of Marketing, AppLovin had the opportunity to contribute to the report and discuss different types of ads. Let’s take a look at the different types of ads that are rising in popularity, especially in the hyper-casual market. 

• Rewarded Video: While in-app advertising isn’t as popular in hardcore games, hyper-casual games aren’t driven by intense gameplay, making rewarded video a natural fit. These videos can play during key moments in gameplay and offer rewards which are in-app currency for players and increase engagement like additional energy or time without interrupting gameplay. 
• Interstitial Video: Similar to rewarded video ads, interstitials capitalize on the natural pauses in gameplay and show a full-screen video that takes over the player’s screen, and typically features an end card with a call to action . This gives the player the option to continue the experience and usually provides a direct link to download the game. 
• Playables: This interactive ad format really allows players to get a sense of the game. By replicating an engaging moment in the ad, players get the opportunity to play a mini version of the game being advertised. “Playable ads have become integral to the mix of creatives you need for successful in-game advertising,” said Alice Guillaume. 
• Banners: While one might assume that these other forms of rich advertising would have pushed this old-school ad format down the list, banners have remained important. Sometimes they are used in conjunction with other advertising formats, but there is still plenty of room for banners in hyper-casual gaming. 
• Native: There have been a few successes with this format in mobile games, but the challenge is scaling native ads for mobile gaming.

A few additional market stats that stood out:

• “There is more age diversity, with gamers ages 21 to 35 accounting for 39% of the total number of gamers, and those ages 36 to 50 accounting for 33%. More than a fifth of gamers are 50 and older.”
• “There will be 145.1 million US smartphone users, with the average adult spending roughly 22 minutes a day in apps playing mobile games.”
• “Overall, rewarded video is the most prevalent format, but playable ads are growing rapidly. The rise of free-to-play games has also spurred renewed growth in banners.”

For more information read the report from eMarketer here.