How In-Game Advertisements Are Benefitting Brands as Well as Gamers
For the longest time, gaming has remained a niche hobby but in recent times the global trend towards gaming has shifted for it becomes more and more mainstream. Couple that with increased ad-blockers and changing ways of content consumption, which has given rise to the new arena of mobile advertisements. Digging deeper, the article explores the rise of in-app advertising as a more targeted form of advertisement, along with the new ways for brands to be able to reach their audiences without hampering or blocking their content consumption. Brands in the future can survive when they are present in synergized ways instead of being obstructive. The key to future is being customer focussed in terms of user experience and building a dialogue while reaching out to them, writes, Vaibhav Odhekar, Co-Founder & COO,POKKT.
Before the smartphone revolution, video games remained a niche hobby limited to a relatively small number of console and desktop gamers. However, with the increased prevalence of smartphones and cheap data plans, people around the world have taken to mobile gaming in a big way. An estimated 2.4 billion people–nearly one third of the world’s population–play mobile games.
Learn More: Opt In, Opt out – 5 Trends in Mobile Advertising
The Challenge: Monetizing a Price-sensitive Market
Mobile gaming is rapidly becoming the digital entertainment option of choice. Streaming giant Netflix recently claimed that Fortnite, a popular multiplayer shooter, is a bigger competitor than rival streaming platforms like HBO.
The increase in tech-savviness has also accompanied by an increasing reluctance to engage with conventional advertising forms. Audiences worldwide increasingly prefer to consume media on smartphones. The widespread use of ad-blockers means that online advertisements don’t even reach a large section of the target audience.
Mobile gamers typically do not like paying for games. This is well evidenced by the popularity of free-to-play and freemium titles such as Candy Crush Saga, Ludo King, and Subway Surfers. There’s a very large, yet price-sensitive global audience of gamers. How can developers monetize this opportunity? In-game advertisements are the answer.
The Solution: In-Game Advertisements
In-game advertisement involves placing ads in the virtual environment of a game. This has numerous advantages for all stakeholders: It represents a major monetization channel for developers. Customers accept in-game ads due to their opt-in nature. Advertisers favour them because they provide a measurable and targeted channel to deploy promotions.
While free-to-play and freemium games account for the majority of mobile gaming revenue in the country, only a fraction of this comes from in-app purchases. According to a KPMG-Google report, advertisers and publishers dominate monetization avenues for game developers today.
In-Game Ads: A Win-Win for All Stakeholders
According to a Swrve report, over 50 percent of all mobile gaming revenue originates from just 0.19 percent of mobile gamers. The vast majority of mobile gamers either spend very little money or games or don’t spend any money at all. This means that in-game advertising has tremendous potential to help developers monetize this large, price-sensitive audience, while bringing value to customers and advertisers.
Indeed, mobile ad spending is expected to grow from $50.1-billion-dollar in 2017 to over $200 billion over the next 3-4 years.
Who Can Businesses Reach Through In-Game Advertisements?
Demographic statistics for gamers belie common stereotypes. 49 percent–nearly half–of all gamers are female. Worldwide, over 58 percent of mothers are gamers. 54 percent of gamers are 25-44 years old. Gaming is no longer the niche abode boys and young men.
What Kind of Products Are Best Promoted Through Them?
In-game advertising offers businesses the opportunity to reach out to a very wide demographic with eclectic tastes. This means that in-game ads don’t have to be limited to products targeting a tech-savvy audience. In-game ads are used to promote FMCG products, lifestyle brands, healthcare, and far more. Almost any product, catering to any demographic can be promoted effectively through in-game advertisements because gaming itself has become a universal pastime.
How Do In-Game Advertisements Add Value for Advertisers?
Traditional advertising media–think TV ads, billboards, or newspaper ads–are fundamentally passive in nature. Communication is one-way–from the advertiser to the consumer. There are no easy ways to correlate ad spend to consumer purchase decisions. In-game advertisements are different: because games are an interactive medium, in-game advertisements depend on user interaction and direct engagement. This makes it far more easier for advertisers to track key metrics like engagement, targeting, and completion rates. In-game ads make it possible for brands to communicate with consumers while they engage with ads. This can lead to very focused, targeted promotional campaigns with lower upfront expenses and higher ROI.
The path forward: targeted in-game ads enabling premium experiences for gamers and maximizing ROI for brands.
Learn More: 5 In-App Spending Trends to Watch
Mobile ad spending is expected to grow by a factor of 10 in the coming years. Standard mobile ads have advantages over conventional advertising media. However, the real path forward lies in aligning the needs of developers, advertisers, and gamers. Premium, paid gaming experiences are out of reach for many gamers, making “casual,” free-to-play options the default choice. However, a number of developers, such as Tencent, have leveraged the power of targeted in-game ads to offer premium gaming experiences for free. Advertisers benefit from better targeting prospects, developers gain from a considerable new monetization channel, and gamers get what they’ve always wanted: Great games.
