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Performance advertisers, you were made for what's next

AdColony's Liz Waldeck-Pinckert on why mobile advertising will hold strong
Performance advertisers, you were made for what's next

Liz Waldeck-Pinckert is director of client partnerships for North America at AdColony.

There are a lot of industries that are not fun to be in right now, from sporting events and leisure services to travel and traditional retail. Any business – large or small – that depends on foot traffic is suffering, even as parts of the country and world open up slowly.

But there are some that have been impacted far less, and a handful that have seen an uptick in consumption and revenue since lockdowns began: Digital streaming, premium news, grocery, e-commerce and self-education.

Games serve multiple needs for today's at-home consumer

The common thread between these industries is that they're either basic services that everyone needs, or they fulfill the desire for growth, information and entertainment. Mobile games, however, fit into the latter group – and serve all of those purposes, not just one.

Consumers are turning to their phones to feel temporary relief from stress, as a kind of "self-care for the mind" to stay mentally and emotionally active. Mobile games are a way to escape.

“All game segments have seen an increase in engagement and revenue as a result of COVID-19 measures, but mobile gaming is the most dramatic”
Liz Waldeck-Pinckert

In any game, there is an objective and a system to learn; there are skills to master, tasks to complete, problems to solve and, perhaps most important, a sense of accomplishment at the end. Mobile games are fulfilling consumers' needs for both work and play.

Time spent is up – but engagement & revenue are, too

It's no wonder that advertisers are seeing a massive surge in supply within mobile gaming. Even just looking at downloads in the Casual games category, Apptopia recorded an increase of nearly 30% from the last week of February to the last week of April. Session volume and time spent are also up, as is engagement – and it's a constant flow.

Unlike most other media channels right now, the eyeballs are still generating revenue. All game segments have seen an increase in engagement and revenue as a result of COVID-19 measures, but mobile gaming is the most dramatic.

Newzoo has revised its projections, estimating that mobile games will generate $77.2 billion in 2020. That's a jump of 13.3% year over year, which is significant considering that most other media channels are now projecting downward, due to the pullback in ad spend from brands.

A period of readjustment – what will be the new normal

The question is, what will happen now that brands have had time to adjust and see the value? For instance, there are plenty of brands that only pulled back temporarily in order to make new creative to fit the current client mindset.

When they start bidding again, how will that impact the UA business? Will we go back to the same level of competition; and how will the networks adjust (again) to this shift?

In the user-acquisition space, we are more than used to periods of volatility. I think it's safe to say that if you need stability and certainty, this is the wrong place to be! But there is also a leveling-out that always occurs and, as I've written before, after spikes and downturns in pricing, there is always a period of readjustment.

The acceleration of the mobile trend

Regardless of what happens with pricing, brands are going to rely heavily on their agencies and ad networks for advice on where to put their dollars. And that advice, in many cases, is going to be, "put it in mobile."

“The biggest lesson we've learned from this COVID era is that mobile was made for this type of situation”
Liz Waldeck-Pinckert

Consumers have turned to their second screen device during the COVID crisis, but even as lockdowns lift and we (slowly) go back to our previous lives, I don't think we will go "back" in time to a period where desktop is first in digital ever again.

This pandemic has proven that mobile will accelerate the already-in-motion shift of ad budgets to in-app mobile and, specifically, into games.

Performance advertisers: We were MADE for this

Performance advertisers observing all of this might be thinking, "Finally! They get what we’ve known for years." The combination of high user attention, professionally-produced environments and valuable audiences (at scale) make mobile gaming the safest and most effective opportunity in digital advertising today.

However, the biggest lesson we've learned from this COVID era is that mobile was made for this type of situation. It's always been fast-moving; challenged on a daily – even hourly – basis to meet users' needs. As a result, our industry is poised to pivot quickly. We are ready for anything, from mitigating a crisis to leveraging and monetizing a huge spike in users.

The mobile industry is already so data-driven. As the rest of the marketing industry shifts to the mindset of "following the numbers" and using algorithms to maximize ROI, we are already accustomed to that and have the tools and technology to do so, only faster.

We are always striving to align supply and demand to fit our users, as a group, based on the data we have – and taking steps to get even more data for better and faster decision-making.

If you're already in the mobile space, that puts you at the front of the tidal wave. Finally, the rest of the ad industry is looking to us as the example to follow. It's kind of a nice feeling, isn’t it?