Our business is simple. We use analytics to find out what players want and then we work out how to give it to them. Sometimes we learn things that jar with popular opinion but it’s not our job to safeguard the status quo – it’s our job to tell the truth.
So, what are the most inconvenient truths right now?
Putting video ads in your games in itself does not increase churn.
Showing ads for competitive games does not affect retention.
Paying players want ads too.
When it comes to ads, the tide is changing but don’t take our word for it. We’ve picked three of the industry’s recent success stories to do the convincing.
Space Ape Games
Just 6 months ago, Fastlane: Road to Revenge was ailing badly thanks to a steadily declining number of Daily Active Users (DAU) and a disappointing combined daily revenue of $35,000. Per figures released in April 2018, Fastlane is now pulling in $80,000 every day (with $45,000 from ads alone) and it is officially the most profitable game on Space Ape’s roster. A revolutionary approach to ads is at the heart of that turnaround.
Fastlane’s rewarded video ad strategy is notable for many reasons. First and foremost, they did not hesitate to place competitive ads into their game. Space Ape recognized that investing heavily in acquisition would not only bring players to Fastlane but, more importantly, the type of player that generates a lot of ad revenue. Their boldness extended to offering rewards of significant value in return for watching ads, which boosted engagement without cannibalizing In-App Purchases (IAPs). A/B testing the placement of ads also revealed that rewarded ads offered at the end of the session performed better than those shown at the start.
Social Point came up with their winning ad formula through a combination of careful integration and rigorous A/B testing. Their research revealed that ‘pulled’ video ads (optional & rewarded) actually reduced churn, with only 30% of those exposed to ads churning after 7 days vs. 43% of players who were not. Conversely, the inclusion of ‘skippable’ video ads that players were forced to watch did have a negative impact on churn. Giving players the power to control their relationship with ads proved to be the key to successful strategy.
Social Point should also be applauded for their stance on ads and IAPs. They noted that the inclusion of video ads (with capped availability) did cause a slight cannibalization of IAP revenues, at which point many developers would likely remove ads. Rather than panic, the SP analytics team took a more holistic view and noted that well-integrated video ads improved overall game revenues even while minorly cannibalizing IAPs, thereby proving their value. SP’s Sharon Biggar spoke about their research at the 17th Games Industry Analytics Forum in November 2017. Her talk is available here, as well as many others.
After taking great pride in keeping War Robots completely ad-free and receiving plenty of praise for doing so, Pixonic realized that integrating video ads could increase the Lifetime Value (LTV) of both paying and non-paying players alike.
Developers are definitely coming round to the idea that some players like ads, but they don’t usually look closer. Recognizing that different player segments have different ad appetites allowed Pixonic to integrate ads with a variety of in-game mechanics and maximize the value of all their watching players.
Furthermore, the War Robots team didn’t just impose time-limited ad watches on their players. They introduced a condition whereby, instead of simply waiting, players that watched the maximum number of ads had to engage in a battle before watching another one. This prevented IAP cannibalization whilst also refocusing players on the game.
More to come
Radical change relies on trendsetters that are willing to leap with not only faith but conviction. The three publishers acknowledged above have a lot in common on a technical level, but the most important characteristic they share is bravery. Recognizing that ads can’t simply be thrown in at the tail end of development and maintaining a sophisticated player-first approach throughout, they challenged what is widely accepted to be true and enjoyed wild success as a result. Stories like theirs will inspire more developers to rethink and ultimately transform the industry. A rising tide lifts all boats.