The games category in the App Store boasts a whopping $100 billion consumer spend – with more than 80% of revenue coming from ‘free-to-play’ models. In-app purchases (IAP) allow users to pay for features to upgrade their game performance, but what about users who don’t want to pay? This is where in-app advertising (IAA) steps in. Mobile advertising has become the most popular way for developers to monetize while still allowing users to play for free.
Every user has their chosen game. These can range from the fun ‘hypercasual’ time-fillers to the more engaged environment of casual/midcore games – or deep into the meta-stories webbed in hardcore game genres such as RPG.
The ad placements within these games can either enrich the user experience when implemented in a thoughtful way, or disturb gameplay and result in player churn. Finding that point of equilibrium that leads to maximizing revenue opportunities is the Holy Grail. With that in mind, different genres have different gameplay and users. At a publisher-level, deciding which formats work best and how to optimally serve the ad is key in optimizing your monetization.
Done right, ad monetization can:
- generate revenue,
- aid user retention
- enhance game experience.
How can you create engaging ad experiences while generating more revenue for your app?
Read on here!
Developers make the first move
System-initiated ads, like banners and interstitials, are all about finding the equilibrium between ad volume and user experience that will maximize the value of a given session without being overly intrusive for players.
The main objective here is to maximize revenue, but in doing so, you should closely monitor metrics such as retention, user experience or average session length to determine if your user experience is being affected. If those metrics remain stable, you may have room to increase ad frequency or add a new placement, but if those metrics begin to decline, you should test if pulling back on ad volume leads to an improvement in user engagement.
Banners are lightweight and effective
Appearing either at the top or bottom of the screen of your app, these small ad units are capable of making a big impact. With easy to read text, image, or animated gifs with a clear call to action, these require little effort to integrate allowing you to start testing banners easily and begin monetizing quickly. This format updates and refreshes frequently, giving users a stream of new content and offers, while at the same time generating revenue for developers.
Banners generally offer a good mix of brand and performance ads, providing publishers with a simple and easy way to access brand budgets, and users with a more diverse ad experience.
Banners are best suited for:
> Games with little to no virtual economy
> Games with consistent controls that do not require users to tap near the lower or top boundaries of the screen (to avoid excessive unintentional clicks)
> Apps with a ‘feed’ experience in which users scroll through content
> Regions with limited internet bandwidth
✔ Keep the location of the banner consistent, and avoid placing banners in areas that will interfere with the user experience.
Interstitials engage players with a seamless experience
Interstitials are visually compelling video and static image ads that take over the screen during natural breaks in gameplay. Akin to banners, they are a system-initiated ad format, but the full-screen experience supports running display, video and playable creatives. Their simple integration, flexibility to work well with other ad formats and their engaging presence helps boost revenue without interrupting the users’ gameplay.
Always test for what works best. For Coda Platform, a F2P developer, interstitial videos generated over 65% of the ad revenue, with rewarded videos and banners contributing the rest.
System-initiated ads are typically more popular with hyper-casual and casual games. Considering the short session times and brief LTV, developers need to maximize the value of those sessions and spot more opportunities to show interstitial ads.
Interstitials are best suited for:
> Games with long load times, natural breaks or many levels in their core loop design
> Simple apps with a basic (or non-existent) virtual economy
> Casual games, more specifically in the realms of puzzle, arcade and simulation games
> Games that rely primarily on ads for monetization and have little to no IAP revenue
✔ Test for ideal frequency and timing that supports the user flow of your game and deploy interstitials during natural pauses. Find the balance. Too many can interfere with gameplay and hurt user retention and ruin their experience, however, too few will not reach monetization goals.
A reason to click
Player-initiated ads such as rewarded video and offer wall tend to attract performance advertisers – as they give users a reason to click. These ad formats can only be implemented in games or apps that include a virtual currency that can be used to reward users for their engagement. Games with a well-developed game economy open the door to more sophisticated use cases, but even simple games with a very basic game economy can see significant revenue contribution from player-initiated ad formats.
At their best, these ad units can be integrated in a way that enhances the game’s core loop and enriches the user experience, providing developers with a user-friendly way to generate revenue from non-paying users (which typically account for ~95% of the total user base). Both Offer Wall and Rewarded Video can play a key role in turning your app into a profitable business. They also give brands the opportunity to blend into the gameplay and deliver their messaging and content for gamers to enjoy.
Rewarded video is a win=win=win
Rewarded video ads are a crowd-pleaser! The format enables developers to offer users a predetermined in-app reward in exchange for watching a video to completion. Users don’t just tolerate them, they actually like these ads. When players are happy with the ads served, they tend to play for longer and more frequently. The longer sessions translate into more opportunities for users to be exposed to ads, which directly impacts a game’s monetization.
Rewarded video can be used at multiple points, for example, during sessions, at app launch, in-shop, pre or post-level. Players appreciate the alternative to making IAPs, advertisers enjoy the exposure to highly engaged audiences, and publishers gain a substantial revenue stream without compromising their game’s user experience – it’s a win-win-win.
Furthermore, A/B testing is a must in determining which placements and rewards are most effective, and don’t cannibalize your IAPs.
Rewarded videos are best suited for:
> Any and all game categories that include a virtual currency that users can be rewarded with.
> Virtual currency doesn’t necessarily have to come in the form of a coin. For example, a daily reward multiplier, boost rewards, extra lives, on the home screen, or end of game multipliers are all valid ways to reward users who engage with these ads.
✔ Developers can use rewarded video to ‘fix leaks’ in their retention funnel, enabling users to gain virtual currency in critical moments where resource shortage may become an obstacle preventing users from progressing in their gameplay.
✔ When used effectively, rewarded video ads can curb player churn, improve session length, and increase ARPDAU – which together contribute positively to total LTV.
Offer Wall – the non-intrusive money-maker
Offer Wall is similar to Rewarded Video in terms of giving users the choice to engage with the ad format in exchange for a reward. Publishers provide users with opportunities to access the Offer Wall at key moments when users are in need of in-app currency. Users access the Offer Wall page where they are presented with a diverse list of offers that can be completed in exchange for virtual currency.
Developers can control the type, content, and genre of the offers presented to tailor the demand for their audience. The customizable nature of the Offer Wall is designed to make it fit perfectly in your game with easy-to-spot access points that open the list of multiple rewards accompanying a selection of specific actions. Upon completion of the offer, users receive an in-app reward. The main difference between Offer Wall and Rewarded Video is the fact that users have the opportunity to complete quick and easy offers and with a relatively modest payout or more difficult-to-complete offers with big payouts.
This unique dynamic requires developers to carefully consider their Offer Wall implementation so that it correlates well with their game economy. Done right, Offer Wall can yield significant incremental revenue and generate eCPMs that can be 10 times as high as Rewarded Video eCPMs.
This format and the spectrum of games that are relevant are typically ones with a fairly sophisticated game economy. Here, you can learn more about how Gogii games used the Offer Wall to increase revenue by 380% and user engagement by 25%. Try it, and let that incremental revenue stream flow with Offer Wall!
Games best suited for Offer Wall:
> Games that focus on long term retention and engagement rates
> Games that feature a sophisticated game economy that accounts for the user’s progress in the game, ideally with more than one currency type (soft currency vs. hard currency)
> Midcore genres such as Strategy and Idle games are a classic fit for the Offer Wall, but there are great examples of successful implementations on more casual genres such as Match 3 or Word games
✔Turn your Offer Wall into an extension of your gameplay by customizing the look and feel of the Offer Wall, making it an extension of your game’s natural UX/UI.
✔Implement at least two access points to make the Offer Wall easily discoverable and accessible to users, increasing your Offer Wall Engagement Rate (the % of total users that access the Offer Wall)
✔Create multiple variations (AKA Placements) of the Offer Wall inside your game, and tailor them to different player segments by optimizing parameters like the offer mix (by category, level of difficulty, or payout amount) the type of currency (for multi-currency games), the virtual currency exchange rate per geo and more
Get started with Offer Wall on your app!
We’ll walk you through unlocking your next stream of revenue.
In-app purchases are not only an alternative
In-app ads are key in enabling free-to-play games to become successful businesses that can go hand in hand with other revenue streams such as in-app purchases (IAP). An increasing number of developers are discovering that they do not need to get locked into one specific model. IAP can in fact coexist with ads, without one cannibalizing on the other’s revenue. This adoption of a ‘hybrid monetization’ model has been continuously increasing in recent years.
The right monetization mix = a long-lasting relationship with users and ads
The right ad placement, in the right game genre, can not only support your monetization goals but also expose you to new layers of revenue for your game. Albeit, there is no set-in-stone answer to which type of ads are right. When a developer has the full picture of IAP and ad revenue together, and it’s accurate, they can then take their UA strategy to the next level and intelligently acquire new users to grow their business.
You can pick, choose or use any of the formats – which is why regardless of your game genre, these implementations require mindful crafting, learning best practices and user behavior and most critically – consistently testing ads in your game flow.