In Ad Management, Game design, Game monetization

In mobile games, advertising is a fundamental part of monetizing the F2P model but it’s only one of several in a complex balancing act. Tackling ads in isolation is a recipe for disaster. If optimizing ad strategy is the aim then you need a mediator with a clear view of the whole game economy and the player’s mindset. As world-renowned philosopher (and F2P success story) Ellen DeGeneres once said: ‘Life is about balance… the Pina and the Colada.’

 

Everything, all at once

The right in-game ad strategy is not necessarily the one providing the biggest check at the end of the first quarter. If a magnificent Click-Through Rate (CTR) signifies your players jumping ship to a fierce rival, and if great ad revenues are cannibalizing your In-App Purchases (IAPs), your ads aren’t working – at least, not for you.

In fairness, most mediators are tasked with driving ad revenue and that’s it. It’s not their job to worry about the player experience, so they don’t. Without access to retention and IAP stats, a disastrous long-term strategy can produce seemingly exciting results… but what’s the use in spinning just one plate if all the others fall and smash?

It’s only through intense A/B testing and tracking the impact of ads across all revenue streams that you can hope to settle on your perfect strategy – one that engages your players without affecting retention.

 

The player mindset

Ever since their invention, video games have been woven around a structure of good vs. bad. Even Pong. Unhelpfully, the industry has been lumbered with a similar narrative – developers and players on one side, corporate sponsors and advertisers on the other. This black and white view isn’t just simplistic, it demonstrates a complete misunderstanding of the player.

2018’s mobile gamer is savvy to the relationship between real and virtual economies: navigating them both is a part of the gameplay experience. Just look at the pushback that met Rovio’s announcement when they decided to remove rewarded video ads from Angry Birds: Transformers. Furthermore, according to industry expert Joseph Farrell, basic human psychology makes us want to spend in the free-to-play environment. It’s a kind of subconscious reciprocation to the ‘generosity’ of the developer. Players don’t hate ads unless they are badly integrated and obstruct the player experience. In the modern gaming landscape, ads are just another weapon in the player’s arsenal.

 

Pina x Colada

The secret to successful monetization is not just striking the perfect balance between ads and IAPs, but doing so early on. Misplaced fears over increasing player churn are causing developers to hesitate and miss out completely on serving ads to a huge chunk of players.

In F2P games, the typical first session lasts 10-20 minutes and the majority of players leave without returning for a second. With so many potential spenders disappearing on Day One, and 40% of developers serving one or fewer ads per session, caution comes at a heavy price. Far from being put off by ads, most players are long gone before they’ve even run into one.

At the other end of the spectrum, 70% of all revenue comes from players with a lifetime of over a month but they are unlikely to stay beyond the first week if your strategy does not cater to their profile. Once again, balance is the key. Long-term players and those with a higher Lifetime Value (LTV) are less likely to be put off by an aggressive ad strategy, but they are more likely to be irritated by repeatedly serving irrelevant ads.

 

What next?

Ads are as much a part of mobile gaming as tutorials and power-ups, but even now they are treated as an afterthought. Siloed reporting and a misunderstanding of player psychology are unnecessarily capping successful monetization in mobile games. If you want to maximize your players’ value you need to ditch outdated stereotypes, pick a mediator with a weather eye on the whole game economy and implement ads right from the off.

If you have any questions, about the contents of this piece or anything else, contact us at [email protected] and we’ll connect you to the relevant person.

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