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Why brands are moving in-game
By Chen Shalit,  Dec 2018

In recent years, the IAB has reported that a sizeable chunk of brand advertisers are consistently shielding away from mobile advertising – as they are still concerned about the unfamiliar medium’s potential privacy issues, device and operating system fragmentation, and lack of standardized metrics.

However, more and more brand advertisers are beginning to embrace the mobile medium and reap its benefits, which include connecting with users on the go—and on a device closely linked to intent and action.

As that happens, we can expect games to constitute a great deal of that spend. In many ways, game inventory is a perfect fit for brands, promising advertisers one of the most engaged and lucrative audiences, according to Flurry, as well as offering an environment that consistently churns out innovative, cutting-edge ads. Brands seeking to connect with engaged users will be unable to ignore the benefits that in-game advertising has to offer.

Innovative ad units

Today, as the advertising industry scrambles to combat poor user experiences and the subsequent ad blocking frenzy, we’re seeing more advertisers embrace engaging and appealing mobile ad formats. This includes rewarded videos, playable ads, rich media ads, interactive ads, native ads, meta ads, and many more—most of which were first served in-game before ever reaching the larger mobile market.

Like many have pointed out, “game developers, as they often do, have pioneered a workable [advertising] direction.” Because only about 3% of a gaming app’s user base actually pays for IAPs (compared to 12% for shopping apps and 8.5% for utility apps), and because the severe competition among mobile games significantly drives down IAP prices, gaming developers have no choice but to figure out how to monetize in other ways. It’s this imperative to monetize that motivates the gaming industry to create innovative advertisements.

This innovative environment represents a huge opportunity for brands looking to translate the high impact of tradition tional brand advertising to the mobile medium in a measurably viewable way.

Massive scale

Since 2008, when the App Store first launched, mobile games have been not only the most popular category, but the fastest growing one, too. According to eMarketer, 68.8% of mobile phone users in the US are also mobile gamers, and 55.7% of the U.S. population are also mobile gamers. In other words, brands have a massive audience at their disposal.

If brands want to access in-app audiences, they will have to buy gaming inventory simply because gaming dominates the app ecosystem. If brands excluded gaming from their advertising strategies, they’d have a severely limited pool of inventory to play with.

Most engaged users

In addition to constituting a sizeable chunk of the app economy, gamers are a great target audience for advertisers because they are highly engaged and are known to engage in long in-app sessions.

Mobile attribution company TUNE, for example, discovered that engagement across the gaming category is “consistently strong,” averaging 82% throughout the first six weeks post-install. This is in comparison with 62% for music and entertainment and even lower for social.

The brand advertising campaigns that capitalize on this engagement are the ones that succeed the most. Gillette, for example, launched a brand awareness campaign, using interactive creatives to capture users’ attention and promote their product. In the ad, consumers could tap their screens to shave the face of Bruno Senna, an F1 driver. According to Millennial Media, the overall CTR was two times higher than industry standards, and 20% of users who interacted with the ad once, interacted again.

Rewarded advertising

Additionally, rewarded advertising, which is an ad format typically used in mobile games, has the potential to benefit brands more than performance advertisers. This is because gamers appreciate that you’re helping them out. In fact, according to a study, rewarded advertising almost doubles the percentage of users who feel positive toward brands.

We can expect brands to spend more and more of their digital advertising budgets on mobile game inventory. It offers advertisers the highest engagement rates, largest user base, and a medium guaranteed to constantly innovate.

Let the games begin.