Mistrust in mobile advertising stems from widespread misperceptions that many developers believe to be fact.
Does advertising cause decreased engagement within your app and lead to user churn?
Is there IAP cannibalization when you introduce rewarded ad formats?
While many of these misconceptions may have circulated, you shouldn't let the possibility threaten the potential lucrative upside that mobile advertising can bring.
Let's take a look at five of the most common industry myths and see how top gaming companies have debunked them one by one.
One myth that we hear all too often is that rewarded ads will cannibalize in-app purchases (IAP). When looking to insert new ads, the first question is almost always whether or not it will hurt the paying customer base.
Research has shown that in-app ads, when executed in a contextually relevant manner, are more likely to encourage than cannibalize IAP.
In fact, we recently published a case study with a leading international publisher of mobile and social games, showcasing that players who engaged with ads were more than twice as likely to make an in-app purchase and stay active in the game, and demonstrated up to a 100 percent boost in IAP spend.
Interestingly, users with lower spending amounts showed the biggest boost in spending after interacting with ads.
Fact: Rewarded ads can boost IAP spend up to 100 percent
Myth 2: Rewarded ads create low-quality users
Things have changed. Rewarded ads are not only used for charting like they previously were. Instead they can provide ROI-positive users.
These ads are like any other type of advertising; however, they still need to be targeted. If done correctly, it could lead to increased engagement and more time spent with your app.
How can you get it right?
With rewarded ads, just like with any other type, optimizing campaigns and making them contextually relevant for users is paramount.
We know that being smart about finding good inventory can yield big results. For instance, in a rewarded ad campaign by Social Point, their app, Monster Legends, gained 46,000 new users in the first week, with 66 percent completing the game's tutorial, and saw an average of 7-10 percent ROI.
Fact: Targeted, rewarded ads can increase time spent with your app
Myth 3: Ads reduce user engagement
You're proud of your game, and you want more engaged users spending time with it.
Some worry that increasing ads will decrease usage when, in fact, real-world practice shows the opposite.
Players find rewarded video ads more engaging and interactive.
A leading international publisher of mobile and social games discovered that users who watched at least one rewarded video ad were actually two and a half times more likely to stay active in the game the following month.
Fact: Users who engage with ads can have an increased user session time
Myth 4: Showing more ads will make you more money
Mobile video advertising is extremely performance-driven.
When determining your monetization approach, it's critical to add elements of scarcity and rarity and show the most relevant ads to users at the right time to ensure you're hitting higher KPIs.
For instance, Next Games was able to double their average eCPM from $10 to $20 for Compass Point: West by showing fewer ads.
They also achieved up to 60 percent engagement with their ads, with average video completions rising to 4-5 per day and with about 10 percent of users leaving a positive App Store review specifically calling out video ads.
Sometimes, less can be more.
Fact: Spamming your users will not keep them engaged
Myth 5: Mid-core games don't benefit - and won't make money - from ads
The truth is that you can make a significant amount of revenue through ads.
After working with DeNA, Fyber found that mid-core games can make significant revenue from ads.
Clients using just one advertising format generate 10 percent of their total revenue.
If you're a mid-core game, you should be making at least 10 to 20 percent of your revenue from ads. If you are not generating that much, you should be rethinking your ad strategy.
Fact: Just using one advertising format can increase total revenue
Takeaway
When it comes to understanding effective mobile advertising, it's important to distinguish truth from fiction, to determine what works and what doesn't.
Don't buy into these aforementioned myths. Instead, use advertising in a smart, efficient and streamlined way to make a positive impact on your app's bottom line.
Interested in testing the waters but don't want to jump right in? Try just one ad format to start and see what happens, that's all it takes. You might be pleasantly surprised.
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