Comment & Opinion

How gaming is powering up the mobile app economy

Milliennial Media's State of the Apps report

How gaming is powering up the mobile app economy

Ollie Clamp is VP Global Monetisation Solutions, International at Millennial Media

With bigger screen sizes becoming more prevalent and improving tech powering the latest smartphones and tablets, consumer expectations for mobile games are on the rise too.

For games developers, being able to effectively evolve and monetise their apps is what helps to drive those new experiences.

At the start of each year, we like to take stock and get a handle on how app developers are reacting to these changing trends, something we call our State of the Apps report.

Our most recent survey for 2015 revealed that developers and publishers want to take their apps further. They want to design their apps to support multiple operating systems and devices. They want to use programmatic channels.

They want to grow their user bases, and they want to do it outside their home territories.

Four key trends from Millennial's  State of the Apps report

When it comes to gaming, these goals and aims are consistent. By designing for multiple operating systems and devices, to making their inventory available on programmatic channels, games developers are looking to use all resources available to them to grow their user bases.

Whilst Android is the dominant OS that developers currently develop for (91%), we believe that all other OS and the mobile web are set for growth in 2015.

Currently just over half (53%) of developers create games for iOS, increasing to three quarters (77%) by the end of this year.

Windows will double from 14 percent to 32 percent in 2015, whilst mobile web developers are also set to increase by five percentage points to 16 percent.

The only OS set to see a decrease in the number of games developers is BlackBerry, dropping from nine to eight percent this year.

Gaming most likely to monetise

Games developers are also monetising their apps differently from the rest of the app economy, with advertising (87%), in-app/virtual purchases (53%) and paid app downloads (38%) all significantly up on other verticals.

In all, 88 percent of games developers are more likely to monetise their apps in some way compared to the survey average of 85 percent.

88 percent of games developers are more likely to monetise their apps in some way compared to the survey average of 85 percent.

Games developers are also more likely to rely on a combination of free and paid apps when it comes to app store pricing models, with 43 percent using a combination.

More than half (54%) only offer free apps and rely on other monetisation strategies, whilst just 3 percent produce paid only apps.

It's not just developing for a wider variety of OS, or how apps are being monetised, that are priorities for games developers - making inventory available programmatically is also set to be a hot trend.

Indeed, compared to the wider app ecosystem, games developers are leading the charge when it comes to programmatic, as 74 percent made at least some inventory available programmatically in 2014, versus 69 percent across all apps.

Furthermore, almost double the number of games developers (29%) source more than 75 percent of impressions programmatically compared with all developers (15%).

Embrace high performing ad formats

Perhaps the most interesting takeaway from State of the Apps report was the type of ad formats being supported by games developers.

Although level with their contemporaries across other apps categories in supporting banner ads (91%), games developers were streets ahead when it came to interstitial (82% vs 67% average) and video (37% vs. 33% average) ad formats.

These findings suggest recognition by developers in gaming that full screen and video formats can provide higher user engagement and deliver higher eCPMs for their inventory.

Full screen and video formats can provide higher user engagement and deliver higher eCPMs.

One area where gaming developers were lagging behind however was in native ads, with only 9 percent supporting this emerging format compared with a 16 percent average across all developers and publishers. This can possibly be put down to the topic of native advertising means different things to different people.

In many cases, people think of native ads as elements in a newsfeed. While perhaps the most scalable version of the native ad, it's really only the beginning.

Native ads are deeply integrated, look and feel like the content surrounding them, and can play out in a number of ways, based on the type of app in which the ad is delivered. For example, in a gaming app, as a user swipes through screens to select opponents, every fifth swipe may present an ad that fits in the same "frame" as the previous screens. The ad should look and feel like part of the game.

These various types of native ads in mobile are not only enabling new ways for brands to engage consumers, but are delivering rich new types of high-yielding ad formats for app developers by putting content and experience at the heart of campaigns.

Mobile's ad opportunity

Games developers are generating billions of impressions on mobile, and as more advertisers seek out mobile customers to get their marketing messages delivered, the end result for developers can be a healthy business model that enables them to continue to do what they love most - building great new games and new experiences.

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