deltaDNA’s new smartads service has been created to put player behavior and preferences at the heart of monetization. Smartads has achieved sustainable 300% improvements in ad revenue in two ways. Firstly, with intelligent player targeting, by serving ads to ad-responsive players at the right frequency, while protecting payers and prospective payers; and secondly through intelligent mediation, by optimizing eCPM on a live player-by-player basis, across 100+ ad networks.
“Making Users comfortable with advertising”
“As game developers, we want to provide a fun, rewarding experience for our players while balancing our ability to continue as a business,” said Shannon Chang, Senior Marketing Manager at Superpower Studio. “Ads, when integrated appropriately, have become a great way to earn incremental revenue alongside in-app purchases (IAPs). One of the many challenges is figuring out the right moment to engage our players with ads and the appropriate number of ads to show each player without inhibiting the user experience.”
“Video ads making a decisive presence”
Jonathan Pereira, Monetization Designer at Smyowl, has been playing games for a long time. He’s watched as ads have made the transition from being a nuisance to becoming part of the gameplay experience.
“Players are willing to see ads in exchange for free play, but this is changing,” Pereira said, “We see rewarded video ads making a decisive presence today because new players are starting to ask questions like ‘Why do I need to see this?’ or ‘What’s in it for me?’”
“Grinders and Novice players have become much more accepting,” said Mark Robinson, CEO of deltaDNA. “In the early days, developers agonized over native ad design and display as they were highly sensitive to players’ perceived concerns, and the potential to spark a high churn rate in games, but now interstitials and video ads are much more a part of life. Players have got used to them, particularly players that have no plans to pay for their game experience.”
Chang said, “With native ads, players can find content-like ads via news feeds or in-game that are a more natural experience. Rewarded video also allows users to opt-in to the ad experience and they’re rewarded for their time spent watching a short (generally 30 second) video ad. Some products allow users to select which video(s) they’re interested in watching, and tailor the video ad experience to their interests.” From an advertiser’s perspective, Chang is seeing higher engagement from players who installed SuperPower Studios’ games after watching a video ad.
Low ad fill rates
The current video game ad economy does however have inherent flaws. Publishers and developers have to deal with issues like low ad fill rates combined with maximizing eCPM (cost per mille) for ads. When an ad impression is requested, the ad network can choose whether or not to fulfill it, and at what rate, based on the data they receive, like user, country and device. The networks compare what they already know about the user and decide on a course of action in milliseconds.
Robinson said, “This can lead to low fill rates, particularly for developers who only use a single ad network. Many of the more sophisticated game design companies opt to create a cascade of ad networks that they think will give them the highest eCPM at the top, defaulting to the next one down if they choose not to fulfill the ad, and so forth. There is a very large number of ad networks to work with, some that provide higher eCPM, but lower fill rates and others that provide low eCPM, but higher fill rates, and everything in between. There are two types of cascading networks; static, which hard codes the ad networks in order into the game, and dynamic, which means that the order is reviewed from time to time.
Dynamic ad mediation
“DeltaDNA is tackling these issues by launching a live service called smartads that combines dynamic ad mediation and cascading of over 100 ad networks to maximize eCPM, whilst also employing predictive modelling of player behaviors to optimize impression density and click throughs.”
Robinson continued, “By giving individual players the monetization experience that best suits them, we have seen dramatic improvements in eCPM, store ratings and even improved organic downloads.”
“It can be difficult for game developers to evaluate the performance of multiple ad networks since it involves reconciling the data presented by each separate ad provider,” said Chris Wright, CTO of deltaDNA.
Another issue that game makers face today is with player targeting. Robinson said, “Many developers are very conservative, so they don’t serve any ads until later sessions in an effort to ensure that those players who are going to pay will have paid. Since many games have an average churn rate of 40% after the first session, these developers miss out on monetization opportunities. On the other side of the equation, with F2P payer fractions in the region of 1-4%, Robinson said, “treating 96-99% of one’s players the same way is a blunt way to work.”
“Players who have similar tolerances for ad consumption often share other in-game characteristics, so by analyzing the in-game data across the entire game economy, from acquisition through to IAP marketing and ad engagement, predictive modelling can be used to identify which players are ad-responsive and when ads are served, thereby minimizing player churn.”
Understanding of the player
Pereira said, “After Smyowl began using deltaDNA, its understanding of the player and what they want completely changed. Seeing how they play and when they play allows us to make targeted adjustments, like offering a new in-game item.”
Chang took a similar view, “Superpower Studios finds value in all of its players, including Grinders who may not pay for IAPs.” Anecdotally, they’ve found that many Grinders provide high social value in the form of creating communities in-game and beyond. These players are devoting time and effort in the game and building relationships with other players through chat, alliances, or social sharing. An increase in overall player engagement can positively affect retention and spend in-game.”
“Ultimately, developers want to maximize IAP where they can and serve ads to everyone else, measuring and testing ad density against churn rates to optimize return.” said Robinson. “Sometimes serving ads can spark paying activity, so there can be symbiosis between the two.”
Ad responsive vs IAP responsive players
Robinson continued, “To get it right, you need to know which of your players are ad-responsive and which are IAP responsive. Applying the right approach to the right players has been seen to improve all game metrics by resulting in a higher eCPM, more revenue, greater player retention, and even higher store ratings leading to an uplift in organic downloads. This level of player understanding is becoming vital.”
Granularity and targeting
Wright said, “But this type of granularity and targeting is only an aspiration for most developers just now. In reality, many developers take the very broad and simple approach which is to focus ads to Android users and IAP marketing to IOS, either upsetting lots of players or inefficiently monetizing.”
Opportunities remain bright
With over 1.9 billion gamers around the world and growing, according to Newzoo, the opportunities in games remain bright, especially in the mobile free-to-play space. But with developers focusing on innovation in gameplay, which still remains a key component to success in the crowded games space; technologies like deltaDNA’s smartads can make things easier for everyone, including the player.
Find out more about smartads and what it can do for your game advertising.
About the Author
John Gaudiosi has spent the past 25 years covering the $100 billion videogame industry for international print, online and television outlets for millions of readers. He currently serves as co-founder of GamerHub Content Network video and editorial syndication, is Editor-In-Chief of GamerHub.tv and is Editor at Shacknews.com, which GamerHub purchased in December 2013. John has been a regular contributor to CNN, Reuters, NVISION, Yahoo!, Gamerlive.tv, Playboy, Wired, USA Today Weekend Magazine, Computer Graphics World, MSN, IGN, EGM Now and many other gaming outlets over the years.