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Conventional wisdom advises that developers should stick with in-app purchases (IAPs) to monetize core mobile games. Core mobile games – which span everything from open-world titles to battle royales, fighting and shooters to platformers, racing, sports and more – are all about longer, more immersive gaming sessions. The assumption and a common misconception is that in-game ads disrupt gameplay, frustrate players with disruptions, and ultimately drive them away.
But gamer sentiment towards core in-game ads has shifted in recent years, says Chitra Kannan, product manager for AdMob, as evidenced by Google’s latest Action Mobile Genre Report.
“The report provides a unique perspective on insights and trends in the mobile gaming industry, particularly for game developers looking to better understand action mobile gamer behavior and motivation,” said Kannan. “So it’s telling that more than three-quarters of the mobile action gamers we surveyed said in-game advertising has a positive or neutral impact on their gaming experience, and 85% of them say they have at least some level of interest.” seen on the ad.”
Google’s 2022 Action Mobile Genre Report is the latest resource to help game developers figure out where to go next. It covers a wide range of topics including mobile gamer profiles, game discovery, monetization, engagement, community and more to help developers navigate the entire game development lifecycle.
Development of a hybrid monetization strategy
While specific monetization strategies vary from game to game based on mechanics, core game developers should consider implementing a hybrid monetization strategy that mixes in-game advertising with in-game ads as this offers higher potential for revenue growth, than just focusing on in-app purchases.
A successful hybrid monetization strategy requires a number of elements working seamlessly together, including delivering the right ads to your player base at the right time, segmentation, and a well-designed game economy. Here’s a closer look at each of these essential elements.
Determining the most effective ad formats
Figuring out which ad formats to use and when to use them is an important part of your monetization strategy. How you implement ads also depends on the type of players you have and where they are in the game. For example, if a player is struggling to complete a certain goal, that would be a good time to show a reward ad or IAP to help them get to the next level.
Rewarded ads are especially successful when there is an existing, well-developed in-game economy with a large supply of virtual items. Even in a hyper casual game with a simpler game economy, you can earn extra revenue by rewarding players for watching a video ad to remove ads for the rest of the session or continue playing after an exhausting life in the game.
“Studies have shown that rewarded ads, where players receive virtual goods for interacting with ads, can actually enhance the app experience, leading to increases in IAP revenue, retention, and engagement,” says Kannan. “More specifically, rewarded ads can give players a taste of premium in-game items, motivating them to purchase those items in the future, ultimately increasing IAPs.”
Another ad format to consider are interstitial ads, which are full-screen ads that work best when displayed during natural breaks and transitions in your app (for example, after a player completes a level). Unlike rewarded ads, interstitials are a push format that allows you to monetize all of your users without waiting for their approval.
AdMob was created to help developers take advantage of new, innovative ad formats. For example, an App Open ad format in AdMob will show players an ad on the loading/splash screen while the app is loading.
“This means publishers can start monetizing users from the moment they open the app, rather than waiting for additional engagement to trigger advertising opportunities,” says Kannan. “We’ve seen many success stories with this new ad format, including CrazyLabs who managed to increase ARPU by 3-5% after incorporating app-open ads into their games.”
Segmentation helps developers leverage behavioral targeting to increase the success of monetization strategies. For example, developers might consider offering larger rewards to non-paying players who are unlikely to make in-app purchases. Alternatively, they could show more ads to players from regions that are used to higher ad density.
A well-designed game economy
A well-designed game economy is key to ensuring IAPs are not cannibalized by other monetization avenues. One way to do this is through a two-currency mechanism that uses both “soft” and “hard” currencies. Soft Currency is an in-game currency that cannot be purchased with real money – it is only available through rewarded ads and other in-game achievements. Hard currency, on the other hand, can only be obtained through IAPs and can also be used to purchase soft currency.
Maximizing User Acquisition
“Ultimately, you want your game to scale,” explains Kannan. “The more players you have, the greater your chances of generating revenue from a combination of ads and purchases. The more revenue you generate, the more you can invest to make your game even better.”
User acquisition thus becomes an important part of your long-term growth strategy. Google App Campaign advanced bid solutions allow you to optimize your own ad campaigns for app installs, retention or purchase. For example, a Target Return on Ad Spend (tROAS) bidding strategy helps you attract users who are more likely to engage with in-app purchases or ads. With tROAS for ad revenue, developers can use app campaigns to attract gamers who engage with ads at scale and directly improve revenue from ads shown in the app.
For more insight into the changing attitudes and trends for action mobile players, check out the 2022 Action Mobile Genre Report. To learn more about Google’s full suite of products and solutions to help you take your game to the next level, visit the Google for Games website.
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