In-Game Advertising: Are We Doing it Right?

Looking at the current status of the in-game advertising industry makes us question - are we doing it right?

The mobile gaming industry is rapidly attracting a good number of business sectors who want to monetize by reaching a dedicated audience. Before entering the new decade, the gaming industry in APAC is expected to generate more than US$72 billion, amounting to 47% of the global gaming revenue. And much of it is due to mobile games. Mobile games can bring close to US$68 billion in revenue, and yet, it remains the most underused ad medium, with organizations spending a meager 7% of their total mobile ad spending. If you look at it, we aren’t making much use of in-game advertising opportunities.

It is surprising how some brands still look at in-game mobile ads as “unworthy” of their ad budget and focus on several other in-app advertising strategies instead. Let’s look at the possible misconceptions about in-game advertising and how to address them. Let’s dive in!

Reason #1: Mobile In-Game Advertising Is Distracting for Users

In-game advertising, when done poorly, can indeed distract players, and this can lead to poor user experience, lousy gaming reviews, and reduced user engagement.

However, advertisers and publishers who can get in-game advertising right - meaning they can provide relevant and suitable content that amplifies user experience - can enjoy a win-win situation.

Once advertisers can closely work with publishers to create a high-quality in-game advertising campaign, this will minimize distraction and instead encourage interaction and improve user experience. The goal is always to choose quality over quantity.

If you look closely at the mobile game ad space, you'll realize that they have tons of ad placement options - banners, interstitial, and native - that would help satisfy various objectives at different effective cost per miles (eCPMs). One effective way of doing targeted ads with maximum relevance is to do rewarded videos - awarding virtual goods or in-game currency can encourage gamers to watch videos in exchange for advancing in the game.

Reason #2: Mobile Games Are Bad for Brands

One of the reasons why brands fail to recognize the benefit of increasing their ad spend on mobile games is the perspective that mobile games do not reflect well on their brands. Of course, the need for brands to know who will see their ads and under what context is understandable. There have been instances where several social gaming platforms, such as those that allow user-generated content (UGC), have put brand integrity at risk. Hence, advertising platforms must work doubly hard to provide accurate user demographics and behavioral targeting functions. This way, it would be easier to understand what content will work best with the brands being promoted.

In the case of most mobile in-game advertising, its environment is highly controlled and utterly devoid of UGC, so brands no longer have to worry that their ads will be displayed together with inappropriate content that can harm their online reputation. In addition, working with reputable advertising platforms, like AlgoriX, that have several tools and filters in place to ensure brand safety can eliminate this risk.

Reason #3: In-Game Advertising Is Unwelcome

While advertising fatigue is real, mobile game advertising is an entirely different medium, and many mobile gamers understand that. This behavior is particularly true for free-to-play games. Many mobile players now prefer playing games that use the free-to-play model over pay-to-play games. They'd rather watch in-game advertising than pay for the games they download. In fact, a study showed that as much as 75% of gamers reported that they would instead continue playing the game and watch advertisements rather than upgrading to an ad-free version of the game.

These three reasons highlight that in-game advertising still has an opportunity to grow as both advertisers and publishers need to switch their mindsets. There needs to be more focus on developing sophisticated ad placements that seamlessly fit into gaming behavior.

Ready to benefit from in-game advertising? Don’t hesitate to connect with us.

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