What if you could go to the movies for free, but every 15 minutes the film would stop for a commercial break? A few very cost-conscious people might tolerate it, but I reckon most would refuse to ruin their cinema experience that way.
Similarly, there’s a good reason game developers dislike in-app advertisements: They distract your customers — and frequently discourage them from using your product.
“Gamers want to game. So disturbing the gamer’s experience, even if it brings value, isn’t always the way to go,” wrote Avi Hadas, in a recent guest column on in-game advertising for VentureBeat.
The stakes are high. In an industry concerned about churn, retention, and monetization of players, in-game ads might save your business — or end up killing it.
A necessary evil
A massive 51 percent of developers said they consider in-game advertising a “necessary evil” yet some 38 percent still consider it an “important” monetization opportunity, according to a recent survey by analytics firm deltaDNA.
“The study from Edinburgh-based deltaDNA shows that many developers are leaving cash on the table over fears of how ads impact player engagement, enjoyment, and retention,” wrote VentureBeat’s Dean Takahashi last month. “That’s a problem worth addressing in the $36 billion mobile game industry, where advertising has become a must for developers who want to get their games better attention in a sea of competition.”
This issue really speaks to the two main pillars of the game industry business model: Acquiring players and finding a way to monetize them.
The shift to free-to-play games has undoubtedly unlocked new opportunities to capture a greater audience. But it has also put the onus on developers to make revenue from their players. With just one to two percent of people making in-app purchases, many turn to in-app ads to help generate cash. However, as I’ve already pointed out, this runs the risk of annoying your customers and driving up churn.
So what’s the solution?
Game developers must rethink their user strategy and take a more proactive approach from the beginning of the pipeline to the very end. Stop tapping into the often-fraudulent black box not knowing anything about the source and characteristics of the leads you acquire. Stop treating in-app advertising as the last resort in squeezing pennies out of your valuable players. And stop shooting from the hip when it comes to retargeting.
Challenging the status quo
Our Berlin-based start-up has analyzed over 150 games and some 6,000 acquisition campaigns. We believe the time has come to challenge the status quo.
Launched only in March, Simplaex is a peer-to-peer platform that doubles as a player marketplace. Counting many of the game industry’s biggest companies as clients, we already have access to over 100 million gamers. There are no middlemen and there’s no fraud. It’s direct and extremely effective.
Using solely first-party data and its own real-time bidder, our new platform completely bypasses the traditional ecosystem for digital marketing. It allows you to target real and identifiable players based on their specific gaming habits and profiles.
Start engaging your players before they leave your game and reengage only those that fulfill your set criteria, like a minimum number of sessions. Plus, our personalization techniques have been proven to increase reengagement rates by up to a factor of five.
The best part? It’s all done with out-of-app advertising. This means you can easily monetize both your active and inactive player base while avoiding the downsides of in-app ads.
These out-of-app ads might frequently be from other developers looking for their own new installs. But there’s another level to this, of course. Gamers are an in-demand demographic for certain products. Maybe headphones-maker Beats knows they buy an above-average amount of tech gear. And perhaps energy drinks company Red Bull believes they have a thirst for its fizzy beverages.
Instead of ruining the flow of a game, developers can now make money by putting ads in front of their players when they’re on Facebook at work, shopping for socks on Amazon at 3 a.m. or just randomly surfing the web. Out-of-app ad technology makes it all possible. And, just as important, lucrative.
So what are you waiting for? That guy shopping for new socks might just be the future of your business.