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DeltaDNA: In-game advertising becomes viable alternative to in-app purchases

After years of uncertain experimentation, free-to-play game developers are starting to view in-game ads as a genuine alternative to in-app purchases (IAPs) rather than just an additional revenue bonus, according to DeltaDNA‘s survey of 336 game developers and publishers.

DeltaDNA said that in the last 12 months, the number of games owing at least 40 percent of total revenues to ads has increased by 15 percent, while the number of games generating 81 percent to 100 percent of their revenue from ads has leaped by a third (29 percent) within the same period.

The In-game Advertising Study 2018, published today by data analytics and player marketing firm DeltaDNA, also found that the relationship between ad networks and game-makers is maturing.

Above: In-game ads are on the rise.

Image Credit: DeltaDNA

Whereas the majority of respondents used to source ads from multiple suppliers in the hope of striking the best deal through competition, an increased demand for transparency and campaign data from the ad networks has led to a marked increase (61 percent year-over-year) in the number of developers showing loyalty to a single network that meets those demands.

As a result, 26 percent of developers now rely on just a single ad network, whereas ad exchanges are still the most popular choice among respondents (28 percent).

“In just a few years, we’ve seen the relationship between game-maker and ads evolve considerably — from being viewed as a necessary evil to an important monetization opportunity – often delivering revenue parity with IAPs,” said Mark Robinson, CEO of DeltaDNA, in a statement. “This is because better access to data from ad networks has allowed developers to take a player-first approach to managing their whole game economy. Balancing retention with IAP revenues and Ad income unlocks game profitability and good player experiences. We are now seeing the analytics-led approach that has been common for retention and IAP now being applied to ads with great success.

Above: Here’s the mix of ads that game developers use.

Image Credit: DeltaDNA

Other key findings include:

• Rewarded video ads are still clearly the most popular ad format, deployed within 65 percent of games (up from 58 percent), ahead of interstitial video ads (39 percent) and banners (31 percent). Playable ads are now used in 21 percent of games, up from just 12 percent last year.

• Similarly to last year, 56 percent of respondents used multiple ad formats within their games. The most common combination is a mix of interstitials and rewarded video, and roughly a fifth of that segment use more than three ad formats.

• Developers are now more confident about integrating ads, with 21 percent showing five or more ads per session – up 35 percent year on year.

• The number of respondents who identify in-game ads as an ‘important monetization opportunity’ has grown from 39 percent in 2016 to 59 percent in 2018, indicating a big cultural shift within the industry.

• When it comes to setting the frequency of ads in a game, the most common concerns among developers are increased player churn (32 percent), lower levels of player enjoyment (26 percent) and lower eCPM,or effective cost per mille, a measure of ad rates (15 percent).

• When describing their overall approach to in-game advertising, 15 percent of developers said they felt confident, marking a 107 percent increase year on year.

Robinson said, “Only with good access to ad data can game makers truly optimize their games. As this is happening more and more, ad networks are properly taking their place in the eco-system to support game developers, and because of this the percentage of revenue generated from ads is going from strength to strength.”

Source: VentureBeat

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