As the global mobile market continues to grow and evolve, attracting ever more users, how is the role of in-game advertising (IGA) changing?
Is the user journey paramount? Can trust and credibility play a role in reimagining the way users and ads interact?
PocketGamer.biz spoke to InMobi director of product marketing Saurav Dutta, to find out more about the ways in which in-game advertising is changing - and how the industry may have to adapt to keep up.
PocletGamer.biz: What's the current state of play with regard to in game advertising?
Saurav Dutta: The current state of affairs is that native in-game advertising, being a segment of gaming advertising, has been growing in the past years but it is still an early stage.
More specifically, the in-game advertising market is expected to grow at an annual rate of almost 20 per cent between 2020 and 2024. With close to 2.6 billion mobile gamers around the world, native in-game advertising is an appealing way to reach this mass audience.
From the PC to the console to mobile, the experience has evolved – as have expectations from both users and advertisers.
While console gaming was the primary destination for in-game advertising, relying on direct buys and sponsorships, mobile in-game advertising has gained popularity, in lockstep with the overall growth of mobile gaming – there are close to 4 x more mobile gamers than console gamers globally.
The in-game advertising market is expected to grow at an annual rate of almost 20 per cent between 2020 and 2024.
Today, in-game advertising on mobile has advanced thanks to the growth of programmatic technology, and wider connectivity. 5G will just accelerate that further.
More advertisers are starting to see the potential of in-game advertising, although it is a medium mainly limited to brand advertisers. Up until recently, in-game advertising has mostly taken the form of banners or static (hard-coded) advertisements within games.
While there is an ask for video due to the brand-first nature of the format, a banner is the strongest performer in terms of creative and ability to consume creative within the screen-time available in these games.
Overall, advertisers are curious about this format, but it's still in its infancy, especially in terms of performance and benefits to them.
With more in-game solutions offering programmatic monetisation being launched within the market, dynamic placements have become a popular go-to option.
Not only does it offer more scale for more bidders, but dynamic placement also offers the flexibility to change the elements within the placement and therefore the format. It also helps to avoid user fatigue, ensuring they are not seeing the same ad repetitively.
What are the key challenges of in-game advertising?
From the demand side, the key challenge of in-game advertising is measurement. There still is no one verified way to measure viewability specifically for in-game advertising
For advertisers, the biggest challenge being faced is around third-party vetted measurement. The Interactive Advertising Bureau (IAB) guidelines were last updated in 2009 and due to technological advances, there currently is no standardised way to measure in-game advertising. However, a committee has been formed recently that is looking to update this.
Brand safety is also another concern. Brands need to partner with the right games. After all, not all brands want to be associated with a game that features violence or adult themes like Grand Theft Auto (GTA). The same applies to publishers.
There is also a question of where this new format sits against the existing format within a singular app. While the idea of in-game advertising generates curiosity, a part of the advertising audience is still waiting to see differentiators between this and a regular banner (within the same app), especially from a performance standpoint.
From a publisher perspective, the key challenge is around maintaining the right balance between advertising opportunities and not disrupting the user experience. A key benefit of in-game advertising is that it blends in seamlessly with the gaming environment, but too many in-game ads will turn off end users.
Where are the opportunities for in-game advertising?
I foresee a lot of growth in this space. Native in-game advertising is premium inventory, and it can be effective even without individual identifiers. For example, billboards are effective in the real world as a mass advertising option, and the same is true of an ad programmatically placed onto a billboard in, say, a racing game.
The highly immersive nature of this kind of in-game advertising mimics the real world as well as real-world ad formats like digital out of home, sponsorship placements (like those in sports arenas), etc.
Another key area of opportunity is around the creative. Native mobile in-game advertising is still quite nascent, and I think brands have not yet fully grasped what it is and how it can create an impact. Over time, I see dynamic creative optimization being far more common with in-game advertising as compared to where things stand now.
Companies should also learn more about the gaming audiences they can reach through in-game advertising. For example, the stereotype of a 'gamer' is of a young man playing a game through a console or PC for hours on end.
Native mobile in-game advertising is still quite nascent, and I think brands have not yet fully grasped what it is and how it can create an impact.
But as we have seen especially in mobile, this is not often the case. InMobi’s research on the ever-popular casual and hypercasual gaming space found that these app users are often older, more affluent and female.
It is considered brand-safe, and I believe this will help in-game advertising grow significantly in the future. Often, native in-game advertising inserts ads into the gaming environment in a highly natural way, As I noted before, gamers are unlikely to be perturbed by seeing an ad on a virtual billboard as they traverse a cityscape. This naturalness means that native in-game advertising can largely be considered brand-safe for most advertisers in most gaming environments.
It will be interesting to see how programmatic guaranteed (PG) buying evolves in this space too. Right now, most in-game ads are bought through direct deals, although they are devoid of some of the advantages of programmatic like transparency and scale.
As PG buying scales, we can expect more brand dollars to pour into in-game advertising. The space will continue to be driven by private marketplace deals in the short term, but PGs can be very effective in combining the best of both direct buys and programmatic.
Of course, it’s worth noting that native in-game advertising is already highly beneficial. According to brand lift data from Adverty and comScore surveys, 78 per cent of gamers recall the ad they saw and 33 per cent say they actually feel brand placement adds to their experience.
How has the advertising sector reacted to/engaged with in-game advertising?
We saw a lot of growth in 2020, in line with the overall growth of mobile games during the pandemic. This lead to more advertiser investment over the past 12 months. In fact even platforms like Netflix have started to look to this format as competition based on time invested and share-of-mind.
In 2021 there is continuing interest in this kind of native in-game advertising, with mobile gaming continuing to be a popular category. In-game advertising is not confined to the console environment, as it exists on the mobile device that goes everywhere with the user. As the world begins to venture outside again, users will still be on mobile and often playing these games.
Right now, there are a few misconceptions about in-game advertising that are preventing this space from being bigger.
There are still some misconceptions around audiences, but advertisers are beginning to better understand the unique audiences they can reach through in-game advertising. There is interest from advertisers – especially those in the consumer packaged goods (CPG), auto and retail sectors. However, the format is young and hence most interest has still been small scale.
Overall, the ecosystem can do more to educate advertisers about the value these ad experiences provide, although measurement challenges in the short term make it difficult to do so quantitatively.
In that sense, it is very similar to connected TV where the value was evident but is still sometimes hard to quantify. However, once advertisers understand this, they will become more receptive to this format.
How and when should developers/publishers think about in-game advertising?
The native experience that these ad formats provide can generate revenue, while it can also create a higher brand affinity for the game itself if the experience is right.
The essence of IGA is to blend the marketing message to the player experience
The essence of IGA is to blend the marketing message to the player experience. App publishers and developers should invest resources to make it scalable, especially with advertisers becoming increasingly interested in this type of ad format.
Furthermore, app developers and publishers should also work with various partners to access different pools of demand and advertisers. That way, publishers can get quality demand for their in-game ad supply.
What has to happen to take in-game advertising to the next level?
For in-game advertising to become more popular and prevalent, greater industry standards are necessary.
More advanced measurement metrics and more analytics need to be made available to marketers so that interested advertisers can accurately assess campaign performance and calculate return on investment (ROI) more effectively.
It will also be necessary to understand what are key measurements for this format that can truly indicate performance.
From a niche ad category to a mainstream medium, it takes the whole ecosystem to work together and come up with best practices to attract more publishers and advertisers.
Furthermore, to take in-game advertising to the next level, creative has to improve around formats and ad rendering. In terms of formats, it will be interesting to see when and how rich media and 3D creative become more popular and more available at scale.
It will of course be important to make sure that ads render quickly and in full as close to 100% of the time as possible for in-game advertising to be widely used and trusted by advertisers.
Additionally, advertisers want exclusivity and want to deliver a premium experience. Interest has been seen from some luxury brands in the retail sector, as these advertisers are looking for specific ways of delivering their message to their distinct, more niche audience.
As of now, programmatically delivering ads allows for great scale, especially with InMobi’s partnerships, but there is a lack in terms of where exclusivity sits within this ecosystem.
Is IGA changing/evolving? Is technology changing the opportunities?
Programmatic is changing the status quo, along with the scale of inventory being made available to advertisers wanting to leverage in-game. Anything nascent will evolve, and that is the case with in-game advertising.
The technology is growing and introducing more scale and more options. One change to keep an eye out for is around 3D ad formats, and how 3D in-game ads can be developed and deployed at scale.
How do we reimagine IGA and the way it's used?
Storytelling is strong with this format, especially when we think about the journey a gamer goes through and the many opportunities for brands to weave into this journey.
Game developers can work closely with brands so that end-users not only see the product in the game for the user to try, but then users can later connect directly with the product and brand. These kinds of unique experience can help brands be woven into the theme of the game and not just have one-off ad placements.
How might this work? For one, an oil brand could run in-game advertising during a racing game during pit stops or races. Alternatively, in a fashion-oriented or esports game, when you choose your player, you can also customize their outfits by partnering with brands while also running native in-game advertising to further cement brand recognition.
These kinds of options that merge the virtual and the real world are already getting some traction. Think of Travis Scott’s virtual concert in Fortnite or the UK Government using in-game advertising to deliver the stay-at-home message. I expect this kind of synergistic in-game advertising to be much more common in the future.
I predict a proliferation of more diverse in-game ad formats in the future, including but not limited to 3D and rich media ads.
Additionally, I predict a proliferation of more diverse in-game ad formats in the future, including but not limited to 3D and rich media ads. Right now, in-game advertising closely aligns with its real-world equivalents (ads placed in billboards, stadiums, etc.) but I think app publishers and developers will develop additional, more creative ways to incorporate in-game advertising natively into their mobile games in the future.
What are the biggest mistakes devs/pubs make when considering in-game advertising?
There are a few big mistakes that we see app developers and publishers make regarding in-game advertising. The first one is that some are not offering up this inventory programmatically.
We’ve repeatedly seen the benefits that programmatic offers, and it would be a shame if ad publishers are leaving money on the table by not embracing this style of advertising.
Another mistake developers and publishers make is when they incorporate native in-game ads in wrong or inappropriate moments within the game. Like all forms of advertising, in-game should be unobtrusive and ensure a quality user experience overall.
This can easily be remedied however, as publishers need to just use analytics to build placements where the opportunity is.
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