It’s time to rethink how in-game ads work

2015 marked the first time in history that more than half of the U.S. population were mobile phone gamers. Even as game investments and acquisitions fell sharply, 2015 was a great year for the mobile game market, with revenues up nearly 20 percent. And yet despite this growth, brand advertising spend has been slow to follow the gaming audience (eMarketer).

In reality, it’s never been easier for advertisers to succeed with in-game advertising. At the recent New York Media Festival, members of the IAB Game Advertising Committee (including my colleague, Andrew Gerhart) discussed some of the key hurdles keeping brand advertisers out of in-game advertising. Among the concerns discussed was that many agencies still feel the technical challenges around creative delivery are just too numerous and insurmountable, given the fragmented state of the mobile market. Some are uncomfortable leveraging the many in-game incentivization tools available. And there still exists a lingering unease around the notion of pairing brand advertising with gaming content, despite the widespread cultural popularity of some gaming titles.

Join us for VentureBeat’s Mobile Summit on April 4 and April 5 at Cavallo Point resort in Sausalito, California. At this exclusive event, executives will discuss strategies for mobile growth and best practices for acquiring, engaging, and nurturing users. Register here. 

Simply put, these are hurdles mobile advertisers are going to have to clear in order to find success in mobile. The truth is that the other categories of apps identified by advertisers as offering a more “premium” content environment and audience, simply don’t offer the scalable volume that brand advertisers demand. And with the exception of social and photo apps, people spend far more time in gaming apps than in other types. When was the last time you sat down for a riveting half-hour session in your favorite productivity app?

Although gaming apps are perhaps feeling the crunch more than most, even the most popular apps struggle with the perception of their value. Agencies often like to buy on a per-app basis from whitelist of top name apps, but that doesn’t necessarily translate to scalable buys. It’s a challenge for individual apps to communicate their value through the buying chain, when in reality, their value at the end of the day is their audience composition and scale.

Compounding the issue is the fact that most traditional media buyers don’t have a great working knowledge of the myriad apps available. Sure, they’ll probably know those apps with the most aggressive PR and app store advertising (think Clash of Clans or Game of War in the gaming genre), but not every app developer can go all-in on cross-channel marketing right out of the gate. If they could, it would still say nothing of their product quality or audience composition.

Smaller apps, even once engaged, are then challenged to properly communicate their value back to the buyer. How can developer teams truly focused on building great gaming experiences compete with massive media apps selling under an established brand?

It’s a problem worth solving, not only for the benefit of the developers, but for buyers and the industry as a whole. If you buy on a per-app basis, you’re only buying the most popular apps — the same thing everyone else is buying. Volume and reach decline with the popularity of and competition with other advertisers within the app. Obtaining cost-efficient impressions at volume becomes nearly impossible.

What the industry needs to move forward is for more apps to be able to convey their value in terms of audience composition, and start moving away from quality assumptions based on the branding and self-promotion. It’s a true but rarely discussed fact that in app games not only have large but incredibly diverse audiences demographically that spans from 6 years old to 60 and over driven by the ubiquity of mobile devices.

The future of successful in-app advertising is in buying audiences, not specific apps. And not television advertising on a smaller screen; an entirely new strategy is needed. It’s time to shift the conversation away from which apps are most popular, selling best, earning the most engagement, etc. Instead, app publishers must embrace technologies that help buyers visualize and understand app audiences better, and buyers should tap into these technologies to enable buys based on audience composition, as defined by demographics and behaviors, regardless of which app they’re currently using. By doing this, they’ll be better able to reach the massive audience of consumers who spend a large percentage of their free time gaming on their mobile devices. And in doing so their dollars will impact the app ecosystem more broadly, which will incentivize publishers to create more diverse app content experiences for consumers.