Trends in In-Game Advertising with Big Players Leveling Up

A lot is happening in the gaming sector. Mobile-first companies are coming in to create newer opportunities for marketers.

Mobile gaming as a market is about to see more players eyeing the market share as Google, Snap, Facebook, and Apple expand and introduce new strategies for video games. Consequently, the reach of popular mobile games extends, and there are new opportunities to engage marketers. One such occasion is augmented reality and its use in real-world activations.
Brands are investing more money into mobile gaming looking to connect with younger audiences who do not like traditional media like print and TV. Meanwhile, app developers are seeking for other ways for making money off their gaming content in an increasingly competitive market.

Those two dynamics together drive growth in in-game ad expenditure. They are bringing companies that have been known to be independent like Google, Snap, and Facebook, into the gaming market in new ways. This year, Facebook launched a gaming tab for streamed content to attract casual gamers. Snapchat rolled out a gaming platform to serve many players, and Google launched Stadia, a gaming platform based on the cloud. All the three players will be looking to make money off their new products with sponsorships, trying to leverage their experience with ad targeting to advertisers.

‘Compared to browsing on social media, gaming is active, and so this is a chance advertisers cannot afford to miss,’ says Tom Wijman, a marketing analyst at Newzoo.

At the same time, Apple will rely on revenue from subscriptions to Arcade, its gaming service. The company will charge a fixed amount to access the exclusive games the platform offers with no ad tracking and ads. Apple has always been concerned with privacy, and this move is no different. The company is more concerned with selling services and hardware to its consumers than it is monetizing their data with ads. Still, Apple has a broad reach, and marketers will be looking for access to those clients. There is a possibility of venturing into branded games. For example, NBCUniversal just rolled out an app based on its popular shows for consumers to interact through adventure.

Channel flipping

Major mobile technology businesses rolling out their gaming platforms will be batting on augmented reality. It is no far-fetched to think that new games will include the immersive tech urging consumers to explore their environments. If it works that way, advertisers will have more opportunities to take advantage of location-based interactions to encourage players to visit restaurants and stores for exclusive discounts and offers.
‘Game developers are smart in the way they understand their user base. They will probably be instrumental in helping the gaming ecosystem cease relying on walled gardens,’ says Maggie Mesa. Mesa is the VP at OpenX in charge of business development.

In 2016, Pokemon Go from Niantic helped to make mobile AR accessible. It was the first step towards an un-ventured road. Last week, Pokemon rolled out an app, Pokemon Pass that encourages users to visit specific stores for in-game rewards.

‘Watch out for AR gaming – companies compete in the space but the infrastructure for advertiser engagement is still behind the competition – but there will be plenty of chances to create new models for advertising,’ says the co-founder of Krikey, Jhanvi Shriram.

Game developers are also likely to help advertisers in their course.
‘Advertisers adore marketing solutions that are based on people in walled gardens like Facebook. However, they are looking for alternatives that help them move outside the mainstream to scale up,’ says Mesa.

Safe environments

If the significant mobile platforms venture into gaming, advertisers end up happy as they can deliver ads to an active and desirable audience at a time when brands are keen about their digital ad spend, privacy, transparency and brand safety.

‘Advertisers love mobile games for different reasons including the fact that their content can be highly integrated with brand placements, a feature that lacks in other platforms whose content is user-generated,’ argues the COO of AppOnboard, Bryan Buskas.

Games that can help platforms like Snapchat and Facebook to deal with the worries marketers have for brand safety will become the focus. On several occasions, advertisers have been reported to boycott YouTube because of where their ads were placed – among offensive content. In other news, liquor brands stayed off Snapchat because they were concerned about an underage audience.

The developer of the app controls gaming content. Due to this; the content is not as susceptible as content that is generated by users, to straying into objectionable territory. It is not a surprise that gaming apps provide safer environments for advertisers than social media platforms, according to the find outs of a global survey by AdColony. Over 60% of respondents reported having seen offensive content on Facebook compared to 18% on mobile games.
Still, advertisers have to think about the content in the games and how it lines up with their brand image.

‘The biggest risk to the safety of brands on mobile games is the content of the game,’ said Shani Rosenfelder, the head of mobile and content insights at AppsFlyer. ‘Violence, suggestive language, and strong language in a game affect the way a brand is seen. Advertisers have to be sure their ads show up in legitimate games with appropriate and relevant content.’

Growth in spending

As mobile tech businesses become more interested in mobile gaming, the market evolved. It is expected that in-game ad spending will grow to $3.25 billion according to eMarketer forecasts. This figure covers mobile gaming alone. Console game platforms like Microsoft Xbox and Sony PlayStation are not ad-supported even if they offer access to the internet, social networks, shopping, and online TV.

‘Mobile gaming could touch all entertainment forms,’ says Wijman. ‘People spend a lot of time every day on their phones.’
Newzoo expects that 2.4 billion people all over the world will play games on mobile this year, providing a big audience to rival social media apps. Smartphones have made the audience for games expand past the stereotypical geeky boy in their teens.

72% of men and women are reported to play games on their phones, according to GlobalWebIndex. 84% of women playing range between 16 and 24 years of age.

Rewarded video

There have been recent concerns about the intrusiveness of ads that have caused developers to zoom in on other streams of revenue like in-app purchases that allow the player to advance faster in the game.
For instance, Fortnite lets players use V bucks, - the in-game currency- to get dances, cosmetic skins, and game modes for their characters. The parent company Epic Games raised $2.4 billion last year from purchases in-game, a demonstration of the potential such games have.

Game developers desire to reach numbers as high as Fortnite’s, but they are walking away from IAP revenue as per reports by DeltaDNA. The industry saw an 11% increase in ad revenue according to the firm.

Mobile ads in-game come in different formats, including native, offer walls, playable, and interstitial. The growth of digital video in general and ad formats like rewarded video helps to increase ad sales in the games. Seeing as there is a huge interest in video as seen on Snapchat, Facebook, Apple, and Google, one can imagine that the companies will be looking to bring together video strategies, gaming, and advertising.

Otherwise called opt-in video, rewarded video ads allow the gamer to watch videos for incentives like levels, points, or virtual gear. The format leads to high click-through rates, with the highest rates of all video formats at 65% according to Smaato.

‘Large brand advertisers are now trying rewarded ads, and so the format is extending to non-gaming apps,’ said Mesa.

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